Nokia (NYSE:NOK) was rumored to build an Android-powered smartphone named the Nokia N1 as far back as the spring of 2012. Then Microsoft (NASDAQ:MSFT) bought Nokia's handset operations, surely killing any Nokia-branded Android phones under development.
Not so fast. The Finnish company just announced the Nokia N1, and it turned out to be an 8-inch tablet. The N1 runs the latest version of Google's (NASDAQ:GOOG) (NASDAQ:GOOGL) Android software, and also counts as a big win for Intel (NASDAQ:INTC), which supplies a 64-bit Atom chip to power the new device.
What's the big deal?
It's Nokia's first Android tablet, arguably Intel's biggest design win so far in the mobile space, and a cheeky Android placement for a brand that's truly committed to Microsoft's mobile world by now.
But it's not an act of mutiny by Nokia's former handset team. The Microsoft-owned business has nothing to do with this tablet.
Instead, it's designed by Nokia proper -- the other half of the company that remains in its old Finnish headquarters and generally focuses on large-scale telecommunications infrastructure these days. So it's still a big surprise emerging from a company that wasn't supposed to make mobile devices anymore.
Look a little closer at the N1 tablet and you'll see signs that this isn't the Nokia you're used to. For one, the company no longer manufactures mobile devices but outsourced the nuts-and-bolts work to Chinese electronics manufacturing giant Hon Hai Technologies. The company is also known as Foxconn and famous for its long-standing business relationship with Apple (NASDAQ:AAPL).
For another, the N1's camera is nothing like what you'd expect from a modern Nokia device. The announcement doesn't mention Nokia's well-known PureView technology that extracts high-quality images from oversized camera sensors, falling back to a simple 8-megapixel main camera. Also, Nokia's exclusive access to Carl Zeiss lenses seems to have passed on via the Microsoft connection.
So, Nokia enthusiasts who buy the N1 tablet will be met by a new operating system, an inferior camera system, and no real connection to the good old Nokia brand. But they also get a good-looking aluminum body in the heavy-duty Nokia style.
In fact, it's more like a rebranded Foxconn tablet in a shell designed by Nokia than a Finnish device through and through. Nokia licenses important elements like the industrial design and the Nokia name badge to Foxconn, but then leaves the implementation up to its new partner.
What happens next?
The tablet launches in China during the first quarter of 2015, priced at the yuan equivalent of $249. Nokia plans to follow up by launching this device in other markets, and also aims to present entirely new licensed designs. No new handset factories required -- these devices will all be made by various third-party manufacturing partners in a very lean business model.
But again, this is not Microsoft's Nokia division, which has dropped the use of the Nokia brand altogether. New handsets and tablets designed by that team will be dipped deeply in Microsoft's brand and imagery. So the other Nokia business gets to try its hand at brand and design licensing, as a lightweight side to its telecom infrastructure focus.
The Nokia N1 will not move the needle at all for Microsoft, which has no relationship at all with the new device. Instead, investors should see it as a proof of concept for the reformed Nokia OYJ, as well as for launch partners Intel, Foxconn, and Google. If the old Nokia brand still carries any weight in the handset and tablet markets, these are the companies it might move.