Nokia phonemaker HMD Global to move some manufacturing to Europe

Finnish phone maker and successor to the Nokia mobile phone brand HMD Global has revealed plans to move some of its manufacturing to Europe.

The company said the move is aimed at responding to “surging customer demand” for locally produced devices due to security and sustainability concerns among both enterprise and consumer users. It aims.

The announcement was made on the sidelines of the Mobile World Congress (MWC) 2023 industry event in Barcelona, ​​marking HMD Global’s move to Europe to meet European Union (EU) data regulations such as GDPR. It took place four years after the reveal. Moving manufacturing there seems like a natural next step.

“We already have a data center in Europe. Specifically, we have a data center in Finland to ensure the security of our devices,” says Lars Silberbauer, Chief Marketing Officer at HMD Global. said at a press conference earlier this week. “By starting this journey of bringing manufacturing to Europe, we want to ensure that a significant part of the development of our devices is within Europe and within European law, which is very important for many of our customers. is.”

So, in many ways, the company is adopting a similar philosophy to manufacturing that the cloud computing industry has done to data with its region-specific infrastructure. It makes it easier for everyone involved to comply with local laws and regulations.

maker’s mark

HMD Global was born in the ashes of Microsoft’s ill-fated acquisition of Nokia devices in 2013. The move ultimately led to his $7 billion “good faith” write-down after Satianadella entered his CEO hot seat and refocused the company’s efforts. Microsoft eventually completely offloaded Nokia’s business, and Nokia struck a brand licensing deal with his newly formed HMD Global entity in 2016.

For the most part, HMD Global has focused on feature phones and low-cost smartphones, but the Helsinki-based company has stopped raising $330 million in venture capital (VC) funding. Is not … Including Google, Qualcomm and Nokia themselves.

Like most mobile operators, HMD Global has historically relied on Asia, especially China and India, for its production. And it is clear that it has not changed. But as part of its burgeoning ambitions in the enterprise space, which includes a suite of add-on subscription services specifically aimed at businesses, the company is also working with Samsung, Google, and — of course — Apple.

In fact, today’s news does not imply the start of a major “lift and shift” effort to bring existing Nokia mobile phone manufacturing to Europe. Silberbauer emphasized that the company sees this as a means of attracting new customers with very specific localization demands in the region.

“We don’t take production away from anywhere,” he said. “We see it as a growth opportunity for the European market.”

Silberbauer told TechCrunch that the European manufacturing effort will begin with 5G smartphones aimed at “security-conscious industries” and will be offered purely as a B2B product. Manufacturing and shipments are expected to begin in the third quarter of 2023, and he plans to add at least one more consumer-facing device in the future.

“We are taking this journey step by step towards manufacturing in Europe,” said Silverbauer.

address unknown

Of course, the big elephant in the room here is where, exactly, is HMD Global manufacturing its devices in Europe? Finland is probably a good bet considering that’s where the company is headquartered. However, despite repeated attempts to obtain details about plans to manufacture on the African continent, Silverbauer cites security as one reason why he could not reveal the exact location of the factory. raised concerns above.

“Unfortunately, our customers are in a variety of security-conscious industries, so we don’t want anyone to know what country these devices are manufactured in to keep them as secure as possible. I cannot tell you.

However, Silverbauer spilled some beans on what the manufacturing flow looks like initially, confirming that HMD Global will continue to work closely with its existing partners in Asia.

“You can’t just flip a switch and have a fully functioning factory in Europe,” he said. “It has to be done in stages. So basically the first step is for our current partners in China to collect the material and conduct initial security before shipping it to our manufacturing partners in the EU. , our European partners will complete the assembly, calibrate and test the device, test the hardware and specifically the security of the software.”

HMD Global is also touting its sustainability credibility with this new decentralized manufacturing model. Silverbauer says this is one reason why it doesn’t make sense to move existing manufacturing from its current location in Asia. We already have strong customers in Asia. base.

“Manufacturing in Europe means reducing the carbon footprint of these devices,” says Silberbauer. “It doesn’t make sense to manufacture all mobile phones in Europe because not all markets and consumers are in Europe. It’s the best.”