Image: Jyrki Lyytikkä / Yle

Nokia announced on Wednesday that a newly-established, independent firm called HMD will begin offering Nokia-branded basic and smartphones as well as tablets. The new devices will be based on the Android operating system.

The new firm will be headed by former Nokia executive Arto Nummela. Since Nokia sold its phone business to Microsoft about two years ago, he's been overseeing their mobile business in Asia, the Middle East and Africa.

"We will be completely focused on creating a unified range of Nokia-branded mobile phones and tablets, which we know will resonate with consumers," says Nummela.

"Branding has become a critical differentiator in mobile phones, which is why our business model is centred on the unique asset of the Nokia brand, and our extensive experience in sales and marketing," he adds.

Microsoft sells feature phone rights

HMD is owned by Smart Connect LP, a private equity fund run by another former Nokia boss, Jean-François Baril. He was Senior Vice President and CPO at Nokia from 1999 to 2012.

HMD will have a 10-year exclusive right to use the Nokia trademark for mobile phones and tablets. Microsoft has simultaneously sold the rights to produce Nokia-branded entry-level feature phones to HMD and FIH Mobile, a subsidiary of Taiwan's Foxconn. That deal was worth 350 million US dollars and will involve the transfer of some 4,500 employees.

Since the original Microsoft-Nokia phone deal was announced in September 2013, the Finnish firm - once the world's biggest phonemaker - has been concentrating on its networks business. That has included this year's takeover of French rival Alcatel Lucent.