(Update #2: Nokia denial) Nokia to stage a smartphone comeback in 2016?

Update, April 27: In a brief official statement, Nokia denies that it currently has “plans to manufacture or sell consumer handsets” and says that the reports about Nokia using a Chinese R&D center to produce smartphones are false. Apparently, the comments were “incorrectly attributed” to Nokia’s Mike Wang.

While Nokia’s rebuttal seems very stern and clear, the wording of the statement doesn’t rule out the possibility that Nokia will license its brand and designs to another company that would handle manufacturing and sales. That’s how the partnership between Nokia and Hon Hai Technology Group (Foxconn) works for the N1 tablet.

Update, April 24: While Re/code is a very solid source, it’s always nice to get official confirmation on a rumor. Nokia’s head in China, Mike Wang told Chinese media that Nokia will use an R&D center and manufacturing facilities in Sichuan to build Android-powered smartphones from next year (via G4Games). No other details are available.

Original post, April 20

Nokia may have dropped out of the smartphone market in a less than fitting manner for a former market leader, so it might not be too surprising to hear mutterings about a return to the industry as its binding deal with Microsoft draws closer to an end. According to sources briefed on Nokia’s plans who spoke with Re/code, the company is not only planning to re-join the phone market, but also has a range of ambitious technology projects in the pipeline.

Nokia Technologies, the smallest of the three business left after the Microsoft buyout, is apparently at the head of this push for new products. This division licenses out the company’s gargantuan patent portfolio, but also designs and licenses new products, including the Z Launcher and the N1 tablet.

Nokia Technologies has apparently been working on phone and tablet products outside of the Windows Phone space, and also has ideas for virtual reality technology, among others. The unit appears to be scaling up its operations, hiring former Dolby Labs executive Ramzi Haidamus and longtime Cisco executive Guido Jouret.

Former Nokia executive Richard Kerris says that people will be blown away if some of the stuff he has seen in development ever comes to market. But the fate of Nokia’s internal designs are being kept close to its chest and there’s a big difference between interesting designs and products that will thrive in the market.

Late last year, Nokia CEO Rajeev Suri declared that Nokia would not be directly returning to the consumer market, but that the brand would reappear in the consumer world. Therefore, Nokia will most likely stage a potential comeback through strategic agreements and design licensing, rather than direct manufacturing. Nokia has already “lent” its brand to Hon Hai Technology Group (Foxconn), which produces and sells the Nokia N1 tablet in China, and we may see more deals like this in the future. Not only does this play to Nokia’s strengths as a development and licensing company, but also avoids the costs and risks associated with manufacturing and marketing in the highly competitive mobile market.

For now though, Nokia is prohibited from selling phones under its own name until the end of the year and from licensing out its brand for use with phones until Q3 2016, according to the contract with Microsoft. However, once the licensing deal comes to an end, Nokia designed and branded smartphones may make a reappearance on store shelves, although likely with a different company manufacturing them.

Nokia itself has said that it is “expanding into exciting new areas … with a focus on enabling the human possibilities of the connected world”, but we’ll have to wait and see exactly what the company has in store for us.

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