Finnish mobile phone developer HMD Global was set-up late last year with the sole purpose of reviving Nokia, the fallen giant. In February, at the Mobile World Conference in Barcelona, Nokia was the buzzword, with HMD Global CEO Arto Nummela doing an almost Steve Jobs-like keynote presentation, underlining their strategy for the next few years as it attempts to break into the top-three of the smartphone universe.
This was followed by the rollout of the Nokia 3, 5 and 6, and a revamped version of the iconic Nokia 3310. The phones went on sale early in June in India. In an already competitive market, one might rule out Nokia from being a strong contender again. However, we believe they can be back again to their glory days – let us look at the reasons why.
The brand name of Nokia in India is no doubt, iconic. Having once dominated the mobile phone segment, it is not hard to believe that the company will leverage this brand value to upgrade loyal feature phone users to Nokia smartphones. The value of brand recognition and the strong sentiment that comes with it is likely to be a big factor in Nokia’s resurgence.
Strong Distribution Network
Considering the sentimental value attached to the brand, it is not difficult to see why the brand enjoys significant distributor loyalty. This is well proven by the fact that even before the phones had gone on sale, Nokia had got on board over 400-odd distributors and 80000 retailers in big and small cities. It has also set up its after-sales unit in 300 cities. Such a robust network would be impossible for any other company to establish in a short period of time, which Nokia managed to do in a few months.
The Google-Android partnership
All Nokia phones will run on Android 7.0 out of the box. A lot of popular brands like Xiaomi run their own OS versions on top of Android, thus in a way, diluting the pure Android experience. HMD plans to rollout Android updates as swiftly as possible before anyone else. This is certain to give it a big leverage when compared to brands like Xiaomi, whose late updates has been a subject of dissection.
The Mid-Tier Market
The mid-tier market is growing very fast with the 8-10k price segment growing at 77 percent quarter on quarter, while the 10-15k segment recorded a growth of 50 percent, according to Counterpoint Research. The average selling price has also increased by Rs. 2000 during the first quarter of 2017 compared to 2016. Nokia 3 (Rs. 9499), 5 (Rs. 12899) and 6 (Rs. 14999) are all part of this mid-tier segment. The strongest competitor to Nokia’s expansion may be Xiaomi with the success of its Redmi phones. But what may work for Nokia is the overall user experience in the same price range.
GST is sure to have its impact on the smartphone industry. Although, prices are largely expected to go down, many brands will have to revise their prices based on the tax slab which it falls under. Nokia has no confusion in this regard as it is starting from scratch. This has led many industry experts to believe that the timing of its launch has been ideal.
It remains to be seen whether Nokia can make most of the factors which made it a powerhouse in the first place in the Indian market.