As reported by Recode:
The Finnish company sold off its devices and services division to Microsoft back in 2014, which left Nokia to focus on mapping, networking and managing patents. Microsoft currently has a clause in place to continue using the Nokia branding until next year, and when this expires Nokia would be in a position to start executing smartphone plans.
Unfortunately, there are no details on what the company has in the works, or more importantly what software the new hardware will support. The company will need to double efforts on new products, and not simply rely on third-parties like Foxconn to produce unremarkable hardware like the N1, though it's expected Nokia will continue to work with license deals instead of manufacturing devices in-house.
Recode also notes that Nokia is experimenting with virtual reality, though again details are sparse. The company is certainly looking at new ways to get back into the swing of things if the recent $16.6 billion Alcatel-Lucent acquisition is anything to go by.
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