Nokia plans return to phone business for 2016

Nokia is plotting a return to the mobile phone market, a year after it sold its device-making division to Microsoft.

The Finnish company, which cannot sell phones under its own name until 2016 due to a contract signed with Microsoft, is already working hard on hiring staff and developing new handsets for release next year, insiders claim.

Speaking to Recode, two unnamed sources said Nokia has "a number of other ambitious technology projects, including some in the virtual reality arena" which could see it go up against Samsung, HTC, Facebook and Oculus in the nascent VR market. This, and its return to the mobile industry, is reportedly being driven by Nokia Technologies, the arm of Nokia which licenses the company's portfolio of 10,000 patents.

Nokia Technologies operates in California and Cambridge, England as well as Espoo and Tampere in its native Finland. The division was based around Nokia's chief technical officer, and although this role mostly worked on the Lumia range and Nokia's Windows Phone efforts, Nokia Technologies worked on other projects, including tablets and smartphones which never saw the light of day.

As it did recently with the Android-powered N1 tablet, Nokia is planning to design new smartphones, then license them and the Nokia brand to a company which will take care of the manufacturing, sales and distribution. Kodak and Polaroid used a similar strategy when they each emerged from bankruptcy.

The gossip comes just days after Nokia agreed to buy telecoms equipment company Alcatel-Lucent for €15.6bn (£11.1bn). Following the sale of its phone-making division (responsible for the Lumia Windows Phone range) to Microsoft, Nokia looked set to trod a similar path to Ericsson, formerly a phone-maker which entered into a joint venture with Sony before transferring entirely to network provision.

Finally, Nokia is also reviewing its Here mapping division, which it may consider selling off.