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It appears that the flagship route didn't work out for them (I rode my Nokia 8 for as long as I could, but the storage was giving me problems.)
Much like when Motorola went into zombie brand mode (after being sold to Lenovo) they leaned hard on the midrange which appeared to do ok, as well as their feature phones.
Google giving up on KaiOS was probably the other killer, money had to go into redeveloping their feature phone software.
It's very telling that they are moving away from the Nokia brand as well, probably looking to terminate the license agreement to recoup some costs
Looking back at HMD's models after 2020 I think this is pretty plausible, with how all their smartphones during this period are likely ODM model - you can tell with how they all use the same Unisoc or MediaTek SoCs.
I mean, only smartphones that are outsourced to Chinese ODMs would ever use these chips, you'll see this with other brands too.
Perhaps zombie brand mode would also be a suitable term, if not for the recent Skyline and Fusion which feels like genuine efforts from HMD.