Nokia smartphones are poised for a comeback after former managers at the Finnish company licensed the handset brand from Microsoft and struck up partnerships with Google and phone manufacturer Foxconn. Nokia was once the world’s dominant cellphone maker but missed the shift to smartphones and then chose Microsoft’s unpopular Windows operating system for its “Lumia” range.
HMD Global, led by Nokia veteran Arto Nummela, wants to launch its first Nokia smartphone in the early part of next year using Google’s Android operating system.
Though the return of Nokia makes for a heart-warming story, HMD will have its work cut out to make a mark in the highly competitive smartphone market, and just banking on the Finnish company’s legacy won’t be enough.Success will require a dash for scale by stealing business from Apple, Samsung and dozens of other players in a cut-throat industry.
Nokia, among other things, was always known as a creative company. Even at the height of its popularity, the company often took risks to keep its lineup fresh, some of which worked, others, not so much. Remember the Nokia Lumia 1020 with its crazy 41-megapixel camera? A device that has yet to be matched on that front even today. Or the Nokia 3650 with a circular keypad. Or the dual-sliding N96. If one thinks about it, Nokia has done it all. The company has produced phones in all shapes and sizes and while there have been a misses, many ended up gaining an iconic standing.
HMD needs to tap into the same kind of creativity. Whether it is a new, quirky design or an eye-catching new feature in hardware, a risky play could just be a breath of fresh air. The worst thing to do here is to be the same as everyone else.
Brand is not everything..
Gone are the days when a brand name alone was enough to sway buying decisions. Tier-I companies like Samsung, HTC and Sony have had to face the brunt of Chinese players, and even homegrown companies like Micromax have seen their market shares steadily decline.
“Consumers may be carrying different smartphones now, but are they really in love and loyal to those brands?” said Nummela in an interview.
Chinese companies have proved that the product itself is much more important than the brand, and the likes of Xiaomi, and OnePlus are the best examples. From being unknown entities outside their home country, these companies have become household names in India, where consumers are least concerned about brands and more concerned about the value for money and the experience with the device.
The Nokia consumer brand lives on as the badge on cheaper, entry-level “feature phones” sold mainly in Asia, India and Eastern Europe, though Microsoft invested little to market the name in recent years. Smartphones typically cost anywhere from ten to 30 times as much as these basic phones, which sell for as little as $20.
An innovative Nokia-branded smartphone that keeps the nostalgia alive is one thing, but that alone doesn’t make for a successful comeback. In the end, it all boils down to the price and you only need to look at BlackBerry to understand why. Pricing is what ultimately brought down a promising BlackBerry Priv. This doesn’t just mean having a slate of entry level phones either.
If the leaks are anything to go by, we can expect two premium Nokia Android smartphones, one tablet, and three affordable smartphones. HMD will be launching these devices across eight regions, but it has made it amply clear that the Indian market is very important. It has also said that there will be a special focus on the lower-tier of the market.
“For a new entrant, having an established brand provides it with an instant on-ramp,” said mobile phone analyst Ben Wood of CCS Insight, who suggested that phone vendors with weaker brands should not take the new challenge lightly.
“The barriers to entry for the Android phone space are low,” said Wood. “What HMD has is the Nokia brand and management experience. The key to its success will be driving scale.”
“We are not going to skip any markets in the long term,” HMD President Florian Seiche said adding that HMD had already set up offices in 40 locations around the world.
The markets needs are quite complex and inter connected. Talking from a consumer point of view, the biggest element going for HMD right now is Nokia’s name. There is a great deal of nostalgia, and almost child-like fancy associated with the brand, and HMD will likely cash in on that factor. The sturdiness of a Nokia mobile (which has led to endless memes) and the ‘indestructible’ tag that comes with it is perhaps much needed in today’s world with thin, fragile smartphones. Nokia’s classic ringtone will also trigger some fond memories and should definitely come back.
HMD Global needs to factor in the iconic elements that defined Nokia. The nostalgia factor will also let fans remember the brand’s earlier days, rather than the Lumia days, which is a win-win for the company and the fans.
These are all the things HMD might need to check before launching a “first-gen” product and then hoping to improve upon it. That is usually Google’s strategy, it worked in 2008 with Android, but the market is not the same anymore. Nokia will need the comeback to with an Apple style launch.
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