Nokia has executed one of the best marketing coups in recent times, by creating so much buzz around a product most potential buyers would not have touched with a barge pole otherwise. The marketing hype, or should we call it a Trumpensian hyperbole, has been akin to a new airline selling its Transatlantic flight using a Zeppelin.
That is because the buzz is being created for the brand relaunch of Nokia by HMD Global through its new Android smartphones and not really this old faithful Nokia 3310. Usually, the so-called ‘hero effect’ is used to sell mid-range phones by showcasing a feature-rich flagship. This time, strangely, there seem to be a nostalgia-fuelled hero effect of an ancient feature phone working in favour of a new set of phones.
It seems the Nokia 3310 feature phone might also sell, despite the lack of any reasoning for its success. The phone will appeal to those who are opposing the digital push and still want just calling facilities on their phones, and maybe the ability to catch some virtual snakes. For those without any of this digital abstinence, some of whom are making a beeline for the phone at stores, it will be a show piece, an occasional Instagram post from their smarter phones and a conversation starter. The phone won’t work on Reliance Jio network as it is not 4G (fourth generation), not even 3G for that matter. In fact, users might actually start praying for bad networks at times.
India still has a lot of potential for features phones, even the 4G variety because that’s necessary for them to work on the (Voice over Long-Term Evolution) VoLTE-only Reliance Jio network. But the Nokia 3310 won’t appeal to those customers, because it’s too steep a price for that segment. In fact, most feature phone users will upgrade only to a smartphone, especially if they are paying good money. Actually, you can buy entry level 4G smartphones at the Rs 3,310 price point now. So, at the end of the day the Nokia 3310 is maybe the only luxury feature phone in the market now. And looking at the initial reactions, HMD Global seems to have played its hand well.
Now, there is a very interesting aspect that comes from the pricing of feature phones. Over the past couple of quarters the upgrade market hasn’t really been at the $50 range for these users. They seem to have pushed their budget up to over $100 because 4G smartphones were not available for less that that. A senior executive of an Indian manufacturer attributed this to the need to future-proof themselves for the 4G boom. As a result, the volume is now bunched in the Rs 6,000 to Rs 15,000 segment. And that too at the cost of the sub-Rs 6,000 segment which noticed a fall in sales.
Now, things might change as 4G smartphones are becoming cheaper with more players coming in with devices that are more affordable.
Meanwhile, there seems to be a lot action in the Rs 15,000 to Rs 30,000 segment too, primarily fuelled by the selfie phones of the Chinese entrants like Oppo and Vivo.
At the upper end of this range, OnePlus is having a smooth ride. This leaves absolutely no volumes in the price range till we reach the iPhones and the Samsung flagships. This kind of a market segmentation must be truly unique to India.
Also, the market is going through a lot of churn with some old players finding the route ahead very bumpy even as new ones make a killing. But, we can be rest assured that by the end of the year there will some consolidation.