comscore 5 reasons why Nokia is poised for a comeback in the Indian smartphone market
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5 reasons why Nokia is poised for a comeback in the Indian smartphone market

Nokia might have finally got its timing, pricing, specs and strategy right. And could well recover some of its lost ground.

nokia phones

Late last year Finnish mobile phone developer, HMD Global, came into existence with the sole purpose of reviving Nokia the erstwhile tech giant that had lead the way in connecting people and making the world smaller. Nokia, of course, had lost a bit of sheen in the last few years. One, it failed to catch up with the smartphone revolution. Two, it began to be seen as a bit of a daddy brand, slightly uncool and old, by the happening millennial population that is now defining mobile industry trends. And three, Microsoft messed it up completely with a failed acquisition in 2014. Also Read - Nokia C20 Plus budget smartphone launched: Check specs, price and other details

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HMD Global was set up to re-imagine Nokia for the 2020s and make it a world-beater again. In February, at the Mobile World Conference (MWC) in Barcelona, Nokia was the buzzword. While tech wizards awaited the latest innovations from Samsung and Apple, they could hardly ignore what Nokia was up to. And surely, it was up to something. Tech commentators reckoned that HMD Global CEO, Arto Nummela, did an almost Steve Jobs-like keynote presentation at MWC, outlining Nokia s strategy for the next few years as it prepares to break into the top three of the smartphone universe. Currently, Samsung, Apple and Huawei belong there. ALSO READ: Nokia 3, Nokia 5, Nokia 6 launched in India; prices start at Rs 9,499: Specifications, features Also Read - Android 12 beta 2 rolling out: New privacy features, tweaked design and more

Then the rollout happened: Nokia announced three new Android smartphones Nokia 3, Nokia 5, Nokia 6 and a gloriously revamped version of its iconic feature phone Nokia 3310, which probably was the first mobile phone owned by half the world. It was clear that while the company was out to capture the new user, it couldn t let go off the old one who was still riding on nostalgia.

Earlier this month, the phones went on sale in India the world s fastest-growing smartphone market, and one where Nokia had reigned not too long ago. It still owns a sizeable share of the feature phone market here. The new Nokia, that wants a slice of the smartphone pie, is aggressive, more focused, and in sync with the present generation. But what are the odds of it succeeding? How will it break into the cluttered Indian market that is presently dominated by Chinese brands Xiaomi, Oppo and Vivo? What is Nokia’s biggest USP?

We found that there s a lot going for it already.

Strong distribution network

Even before the phones went on sale, Nokia had got on board 400-odd distributors and over 80,000 retailers across small and big cities. It has set up its after-sales service units in over 300 cities. Typically, a brand would take 2-3 years to build such a robust distribution network. But Nokia did that in a few months.

People talk of Nokia s consumer loyalty. But there s a very strong distributor loyalty too, says Tarun Pathak, Associate Director, Counterpoint Research. Nokia may not offer high distributor margins like Oppo, but people are still keen to stock the brand. They say that come what may I will distribute Nokia phones because the first phone I ever sold was a Nokia.

It is impossible to ignore the sentimental value attached to brand Nokia, especially in India. Hence, getting shelf space or attention would never be an issue, even though sellers might make less money on per item sold. ALSO READ: Nokia 3 goes on sale via offline stores starting today: Price, specifications and features

Brand recall

Everyone has heard of Nokia. Literally everyone. It is widely said that if Maruti was the first car Indians ever drove, Nokia was the first mobile phone they d ever used. There is immense brand recognition and recall for Nokia, probably unmatched among its peers. Everyone remembers the 3310 vividly. Snake is reminisced about in gatherings still. The signature Nokia ringtone is recognizable even from a distance. Nokia isn t merely popular, it is iconic.

And HMD global is acutely aware of this. Nokia is a trusted and well-loved brand across the world and especially in India. [We will] script a new chapter for Nokia phones in this country as we set out to capture the hearts and minds of an entirely new generation of fans through an inspiring and purpose-led approach, Ajey Mehta, Vice President India, HMD Global, said in a statement. The company will leverage this brand value to upgrade loyal feature phone users to Nokia smartphones.

The Google-Android partnership

Nokia announced at MWC that its new smartphones will run the purest form of Android that many fans love. A lot of phone brands, for instance, Xiaomi which is hugely popular in India, run their own OS versions on top of Android, thus diluting the clean Android experience which Nokia is betting big on. One HMD exec told Gulf News, Most of the smartphones in the market do not have the Android OS in the way it should be. Vendors are adding a skin on top of the OS We and Google will jointly enhance the Nokia brand to put the right kind of inputs into the phone, including Google Assistant.

HMD also intends to roll out Android updates as swiftly as possible and before anyone else. That could be a game-changer, because serious users hate to wait for new features. And a lot of brands, especially Xiaomi, are notorious for their late updates. Nokia could well become the new Nexus phones, which too ran on stock Android and offered swift OS updates. All three Nokia phones will be running on Android 7.0 out of the box. Only about 1 percent of the world s smartphones are doing that now.

Hot mid-tier market

Nokia 3 (Rs. 9,499), Nokia 5 (Rs. 12,899) and Nokia 6 (Rs. 14,999) operate in the budget-to-mid end, which is the fastest-growing segment of the market in India. The 8-10K price segment is growing at 77 percent quarter-on-quarter, while the 10-15K one recorded a 50 percent quarterly growth, according to a report from Counterpoint Research. The ASP (average selling price) of phones has also increased by Rs. 2,000 during Q1 2017 as compared to Q1 2016, as consumers are upgrading to high-end specifications at not-so-high end prices.

Last year the entry segment (4-8K) was the hottest, but this year the real competition is in the mid-level market. Nokia is right there. But it needs to shift the conversation from pricing to an overall experience it offers, says analyst Pathak. Nokia 3, 5, 6 directly compete with Xiaomi and Lenovo-Motorola handsets. Possibly Xiaomi is its strongest competitor given the viral success of its Redmi phones and the increasing number of Mi fans across the country. ALSO READ: Xiaomi Redmi 4A Review: The new king of affordable smartphones

Timing of the launch

Experts believe that Nokia s new launches couldn t have come at a better time, at least in the Indian market. The mobile phone industry will go through a tax re-jig following the implementation of GST in July. Though it is believed that smartphone prices will come down post-GST, some brands would have to revisit their pricing. Some products would fall under the tax slab of 12 percent, but some premium ones like iPhones could be taxed 18 percent or above.

Brands that Make in India are yet uncertain about incentives on domestic manufacturing. Almost 4 out of 5 mobile phones shipped were made in India in Q1 2017, estimates Counterpoint. Nokia is devoid of confusion on that front, at least for now. Most brands are struggling with how GST would impact them. Nokia is starting from scratch and will escape that, says Pathak.

So, will Nokia turn out to be the proverbial phoenix rising from the ashes? We ll know in a few quarters, but the probabilities are fairly high.

For the latest tech news across the world, latest PC and Mobile games, tips & tricks, top-notch gadget reviews of most exciting releases follow BGR India’s Facebook, Twitter, subscribe our YouTube Channel. Also follow us on  Facebook Messenger for latest updates.
  • Published Date: June 20, 2017 3:21 PM IST
  • Updated Date: June 21, 2017 9:41 AM IST



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