Is nokia returning in 2016?

To be honest, I dont know, and I have not followed up on any new leaks or news on Nokia's comeback to phones. There was some hype earlier about Nokia making it's IP and brand available for other manufacturers to make tablets and smartphones. That, in itself, is not a "comeback", not in my dictionary, so let's focus on if Nokia itself would like to return to creating and selling phones.

There are compelling reasons for Nokia coming back to phones, as well as compelling reasons for not coming back to phones.

Reasons for coming back to phones:

The Demand - As of today, there are the following main options available to a smartphone customer.

1. Buy an iPhone - Great option, but costs money. For some of us, the OS is less flexible and gets boring after a while.
2. Buy a Samsung phone - OK, you can do way more with it, but the UI is clunky, intuitive and outdated (can anyone make out the difference between the homescreen of a S3 and a S6?). Additionally, the hardware design (or industrial design, as some call it) is quite underwhelming.
3. Buy a Chinese Android iPhone-clone - The Xiaomi's & Oppos - excellent value for money, but there are lingering doubts about quality, service levels, security and overall device stability.
4. Buy a "Stock" Android device - Examples are Nexus family, or Moto G/X. Again, great choice, but terrible value for money (for Nexus), and a really poor camera (for Moto)

The way I see it, there is a demand for an Android phone with a great camera and visually appealing hardware design, and which has great battery life. Nokia is known for excellent hardware design. Nokia is known for making the best mobile phone cameras. Nokia also has several years of IPR in battery saving technologies. IMHO, Nokia is the "missing piece" in the Android jigsaw puzzle.

Nokia brand  - Check any social media with news of Nokia returning to phones. See the number of "likes", positive comments, retweets and upvotes.  A whole bunch of people get excited on any rumour of Nokia making a phone. From a Nokia shareholder point-of-view, it's a asset that's just waiting to be re-tapped.

Lumia Did't Fail, Windows Phone Did - Let's be honest about this now. Even the strongest Windows Phone fan (yes, maybe 1 or 2 exist) cannot claim that the Windows Phone OS is good. Nokia Lumia devices failed miserably, not because of Nokia, but because of Microsoft. So the spectacular failure of Lumia is not a reason for Nokia to hold back from returning to phones.

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Reasons for NOT coming back to phones:

Growth is over - The era of mobile phone growth is now over. Most of the "growth" reported by analysts and industry studies are coming from people replacing feature phones with smartphones. Even within smartphones, the growth story would soon saturate. The growth instead seems to be slowly moving over to smart-watches, advanced fitness trackers, wearables & connected vehicles. Is it really worth the investment for Nokia to return to phones? Maybe they should just leave it to the cheap Chinese manufacturers who can slash prices to generate market share.

Time to Market - Even if there is a demand, how soon can Nokia fulfil it? Nokia is not known for speed. Unless Nokia is already working on a phone (they may be), they may not be able to deliver anything before late 2016. Would the demand have shifted elssewhere by then? Would Samsung have improved it's  UI and design by then? Would Google come up with a killer camera on the next Nexus by then?

The Engineers are gone - Most of Nokia's engineering talent is now somewhere else. The huge rounds of layoffs & transfer to Accenture/TCS would have left the engineering pool quite dry by now. When the layoffs and transfers happened, no one looked at the employees past performance, goals accomplished, key technology area competence etc. etc. So it's safe to assume that a good chunk of Nokia key engineering talent are not with Nokia.

 

Best Case Scenario

Best case for Nokia is to just tie up with Google for their next Nexus device. It would be a symbiotic win-win situation for them both. Google badly needs good hardware design, great camera & battery life in their devices, which Nokia can provide. Nokia needs a  partner with deep pockets to share the risk, which they get with Google. On a different note, Google may be struggling with a name for the next Nexus device, as they have already reached "6", and they cant use "7" since it's a tablet. Why not call it the "Nokia - Nexus"?