1. Nokia 2.0: Connecting People, yet again

Nokia 2.0: Connecting People, yet again

HMD Global is taking Nokia back into the market with all the enthusiasm of a start-up. Can it work?

By: | Updated: November 14, 2017 3:32 AM
Nokia, Connecting People, Nokia Connecting People, android experience, smartphones, android, android phone, brandwagon, industry stories The HMD Global team at the launch of the Nokia 2 phone.

A smooth and updated android experience, an upgradable customer segment and design is what HMD Global is focussed on to bring the Nokia name firmly in the spotlight for smartphones. The brand’s feature phones currently occupy 8% of the market share in India which places Nokia at number four in the running, as per Counterpoint Research. Nokia, in the past, had cultivated brand loyalty. The Nokia 3310 launch combined the brand’s comeback excitement with the nostalgic value associated with the brand. When it was announced that HMD Global would start to bring back the Nokia brand late last year, there was a certain sense of scepticism and market experts preferred to wait and watch how the brand would choose to re-enter. Pekka Rentala, executive vice president, HMD Global says that the firm took cognisance of the sentiments in the market. “We figured that consumers wanted to see something new coming from the Nokia brand — but a product which could be seen leveraging qualities from a Nokia phone of the past,” he shares. “In terms of sales, 3310 has been very profitable both in terms of brand building, and as a marketing tool.”

The market has changed a lot since the golden Nokia days to now where there is stiff competition in the smartphone space, especially from Chinese players. Since the brand never really exited the market, having a major foothold via its feature phone offerings, it is currently leveraging the strength and reach of over 400 exclusive partners. By the end of 2017, the brand looks to have 100,000 sales points across India, Rentala provides. This feature phone segment is a considerable user base that HMD Global is looking to upgrade to its smartphone offerings.

The core target base is 20-50 year-olds. The aim to provide consumers with a bloatware-free version of Google services is what HMD Global hopes to be Nokia’s comeback calling card. HMD Global’s partnership with Google is to provide an android experience which is “as Google intended it”, claims Rentala. Sanchit Gogia, founder and CEO, Greyhound Research, counts that as a plus. “Nokia has smartly chosen the stock android route which allows for exceptional experiences. Over time, consumers have started to prefer to receive updates as they are rolled out,” he says.

HMD Global is choosing its sales strategy for each of its smartphones depending on their qualities and the market. With Nokia 3310, the phone was sold offline. For Nokia 6, the brand partnered with Amazon, whereas Nokia 3 and Nokia 5 were pushed mostly over offline channels. Leaving aside Korean giant Samsung, Chinese smartphones have captured a decent market share, and obviously have a head-start to HMD Global. But the problems these players face are on the service front (the failure to provide it, or even a long service cycle). This is where Nokia hopes its network of Nokia Care Centres will play a major role. The focus for the brand is to impress consumers on the design, functioning, overall quality and service fronts. That may be so, but Jaipal Singh, senior analyst, IDC India cautions against Nokia getting too comfortable.

“Chinese vendors are providing specs at very competitive prices, giving very high margins to distributors,” he points out. The way the distributors do business has also changed over years. Since this is a brand that is making a re-entry in a sense, it needs to focus on the supply issues of the market. Gogia however sees a gap in the brand’s strategy in seemingly making little to no efforts to cater to the enterprise market. “The Apples and Samsungs of the world have dominated the market and Nokia currently has zero play in the enterprise market, not that it is something the brand cannot address,” he says. Consumers are looking for the new things their phones can do, so providing more of the same, but in better quality, won’t be enough.

HMD Global currently has a campaign running for Nokia 8 promoting its Bothie feature. Campaigns, as part of the #UniteFor global brand philosophy, for Nokia 3 and Nokia 5 were rolled out earlier in this year and featured brand ambassador PV Sindhu. HMD Global for its Nokia branded phones will focus on expanding its portfolio, for both its feature phone offerings and smartphone offerings. Siegel+Gale’s Global Brand Simplicity Index 2017 which looks at brands that simplify consumers’ lives and build brand loyalty, finds Nokia ranking at 41, globally. In the same list, Lenovo occupies the 19th spot, followed by Samsung at 20th. For the Indian market, Nokia ranks at the 11th spot.

Top five smartphone companies in India, (Market share, Q1 2017)
Samsung 28.1
Xiaomi 14.2
Vivo 10.5
Lenovo Group 9.5
OPPO 9.3
Others 28.3

Shinmin.Bali @expressindia.com

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