Why Nokia needs to reboot its Asha strategy

Why Nokia needs to reboot its Asha strategy
Why Nokia needs to reboot its Asha strategy

Nokia’s Lumia volumes might have increased by 27 percent sequentially to 5.6 million units in Q1 2013, what shocked the most is the steep decline in full-touch Asha shipments, which were almost halved sequentially to just 5 million units. Nokia has acknowledged that it witnessed “competitive industry dynamics and an estimated higher than normal seasonal decline in the market addressable by mobile phones.” During its earnings call, Nokia CEO Stephen Elop also mentioned that Nokia is planning to launch a refresh of its Asha series of phones. While it is good that Nokia seems to have expected this shift in consumer usage trends and has plans to tackle it, the biggest constraint for the handset vendor is time and it needs to deliver a brand new Asha experience right away.

I have been a big fan of Nokia’s full-touch Asha series from the beginning and felt that they provided a great balance of hardware features and experiences for first-time touchscreen users that cannot be provided by an Android smartphone at a sub-Rs 5,000 price point. That remains to still be the case but there’s something else responsible for Nokia’s Asha paranoia – local smartphone vendors.

Nokia had learnt it the hard way a few years ago when it missed out on the Dual-SIM trend by not responding to features provided by white box manufacturers, who cater to local players in most emerging markets. We can witness the same happening in the sub-Rs 5,000 smartphone space where local players have been overactive in the past couple of quarters. A quick check on Flipkart reveals there are 47 Android smartphones available at the time of writing this feature that are priced below Rs 5,000. Guess how many of global tier one brands are present in the list? None.

While Nokia’s Asha strategy, which created an entry-level smartphone competing product without having many crucial smartphone features paid off during its first six months, it seems that marketing full-touch Asha phones as smartphones might have backfired in the previous quarter. With Android smartphones now having encroached on Asha prices, Nokia can no longer play the price card that Asha provides smartphone-like features without having to spend on a smartphone. One can now buy a Android smartphone for less than what one would pay to buy an Asha full-touch phone. (For the record, Nokia classifies and markets its full-touch Asha phones as smartphones.)

Nokia needs to act before it gets too late and tier one vendors launch sub-Rs 5,000 Android smartphones. While Nokia is trying to bring down prices of its Lumia smartphones further, its Asha series will be crucial for it to be relevant in the mobile phone business that brings most volumes. The Finnish handset vendor shipped 55.8 million mobile phones (including full-touch Asha) and just 5.6 million Lumia smartphones last quarter – a period when its smartphone shipments increased by 27 percent and mobile phone shipments decreased by 30 percent!

Nokia already has a great suite of services including an app store, a music store, maps with navigation, among other things. What it really needs now is an exciting user interface and a platform that does justice to these services, something that S40 cannot provide. Think about features like some form of multi-tasking or even simple push notifications for apps. It could even implement Lumia’s design language, like it has already done with its 301 and 105 entry-level phones by giving them curved corners and Lumia’s color palette.

Elop mentioned during the earnings call that in the very near term we should expect to see a freshening in the Asha product line. “We’re roughly nine months into the Asha full-touch line relative to when we began shipping it. So it is reasonable to expect that it is due for freshening and we’re looking forward to that in the near-term,” he said.

While that’s encouraging, it remains to be seen how soon can Nokia deliver the new phones as it urgently needs them right away.

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  • http://www.mrpinindia.in Pranjal

    It’s true one can get a Android Gingerbread smartphone from any local vendors for sub – Rs. 5000 category, with a neat specs on paper but, when it comes to user experience things becomes terrible. The poor build quality, good for nothing MP camera, laggy performance, and the worst part of these phones is awful battery life, a majority of those 47 devices at flipkart lasts only for 4 hours while, you’re on a call.

    I am impressed by the Asha 311, a fairly best example of an affordable phone with a fluid OS, integration of social services like Whatsapp and chat apps that runs in background. Hardware is decent enough, 1 GHz processor and 256 MB RAM, makes everything glitch-free. However, Nokia should re-consider their strategy for the current S40 touch devices, Asha S40 OS is now much gorgeous, and lag free but, if they could manage to bring basic multi-tasking support and app notifications like they’ve done with Whatsapp, etc then S40 could be an amazing OS for the budget buyers. While for the hardware side, a 3.5-inch equipped Asha phone with a LED flash on its back can easily put the cheap Android smartphones aside.

    • Sudhakar Murthy

      Hey Man, you have definitely not tried Micromax/Karbonn/Lava/Intex Android 3.5″ – 4″ phones that are simply superb. Asha phone is not comparable. First of all, it is not a smartphone at all. Android phones run 8,00,000 apps.

  • Akash

    Why don’t nokia introduce a smartphone with FIREFOX OS . . . Which will be cheap, fluid ui and excitement…

  • Shubham Deshmukh

    yeah… maybe nokia needs to look at other OSes now for its lower lineup, maybe firefox, as it badly needs all those features + multitasking.

    Orelse it should try to bring Windows Phone on lower devices, but that seems unlikely due to hardware….. :/

  • Tauseef

    Nokia nees to reborn and downscale symbian and put it on asha platform and asha full touch with refresh s60v3 and belle respectively. There are still many people who hate android.

  • Tony

    Nokia nees to reborn and downscale symbian and put it on asha platform and asha full touch with refresh s60v3 and belle respectively. There are still many people who hate android.

  • Ali

    Stephen need to understand that Nokia always had a good name in India due to quality of hardware Nokia proivde. CEO of Nokia need to understand that it just can’t provide phones on windows OS and tie up with a single company, if Nokia brings any android phone then we will see how many takers for Micromax/Karboon or even Samsung, I bet the fortune will swings in Nokia favour, I’m sure windows not giving free OS to Nokia they are acquiring licenses for the same so bringing windows phone prices down only will bring Nokia profit down which is not a good business proposition. I don’t know why board of directors of Nokia sticking with this current CEO who is ex Microsoft and seems more loyal to Microsoft then Nokia. He should be kicked out of not bringing any android nokia devices, if he is having personal grudge on android then definitely he can launch some meego/firefox/tizen devices.