HMD Global's Bold Move: Nokia Phones to be Manufactured in Europe

HMD Global, the Finnish phone maker, is making waves in the mobile industry once again as it announces plans to move some of its manufacturing to Europe. The company has cited an increase in demand for locally-produced devices, which is being driven by concerns over security and sustainability among both corporate and consumer users. The move follows HMD Global's decision to move its data centers to Europe four years ago to comply with EU data regulations.

The decision to move manufacturing to Europe is seen as a natural next-step for HMD Global. The company already has its data centers in Finland to ensure the security of its devices, and bringing manufacturing closer to home will ensure that the critical part of device development remains within Europe and within European legislations.

For HMD Global, sovereignty is the name of the game. By bringing manufacturing closer to the customer, the company can better adhere to local laws and regulations. The move is also part of the company's burgeoning ambitions in the enterprise realm, which includes a suite of add-on subscription services for businesses. The company hopes that by moving manufacturing to Europe, it can further differentiate itself in a space that includes deep-pocketed incumbents such as Samsung, Google, and Apple.

While HMD Global has hitherto relied on Asia for its manufacturing output, specifically China and India, it is clear that the move to Europe is not a major "lift and shift" effort. Instead, the company sees this as a means to attract new customers with very specific localization demands in the region.

HMD Global emerged from the ashes of Microsoft's ill-fated Nokia devices acquisition in 2013. The move ultimately led to a $7 billion "good will" writedown after Satya Nadella entered the CEO hotseat and refocused the company's efforts. Microsoft eventually offloaded the Nokia business entirely, with Nokia inking a brand-licensing deal with the newly-established HMD Global entity in 2016. Despite focusing on feature phones and budget smartphones, HMD Global has raised $330 million in venture capital funding, the lion's share arriving in 2020 from big-name backers including Google, Qualcomm, and Nokia itself.