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Nokia phones will not be the cheapest product in the market: HMD Global India's Ajey Mehta

Nokia executives detail company's strategy for Indian market and product strategy as they aim to become top five smartphone brand.

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Last year, Finnish startup HMD Global came out of nowhere to resurrect the Nokia brand that many owned as their first mobile device. The company took an unusual approach of releasing a feature phone first and expanding to smartphones later. That idea was more of an ode to the legacy of old Nokia brand that failed miserably to adjust itself to modern consumer demands.

Nokia, by HMD Global

Under new owners HMD Global, the Nokia brand seems to be playing big to restore its cult status, with the idea of nostalgia. At Mobile World Congress last year, the Nokia brand started its meaningful journey with the release of Nokia 3, Nokia 5 and Nokia 6 – all running Android. However, the highlight was a colorful resurrection of Nokia 3310, which most people in their early 30s would resonate with as their first mobile phone. Since that announcement, HMD Global introduced a flagship smartphone alongside several other feature phones and even departure of its then CEO Arto Nummela.

Foxconn and licenses

The HMD Global’s leadership team includes people who all have been part of Nokia until it was acquired by Microsoft. This leadership team brings the DNA of Nokia to HMD Global but it is definitely not that old Nokia in its true essence. First, it does not make its own phones anymore and relies on contractor Foxconn for assembling its mobile devices. It now licenses software from Google and lacks the depth and breadth of the old Nokia. Despite all the odds, it has created an impact entry in the smartphone market.

According to Counterpoint Research, HMD Global managed to capture 1 percent of smartphone market share at the end of 2017. The number is not only commendable for a new entrant but also phenomenal considering it started selling its smartphones globally only in July of last year.

Big Nokia announcements

The company is also making it a habit to announce big products at Mobile World Congress in Barcelona. This year, the company introduced Nokia 1 based on Android Oreo (Go edition), Nokia 6 (2018), Nokia 7 plus and Nokia 8 Sirocco, all based on Android One platform. It also showed second act of nostalgia with its resurrected Nokia 8110 4G feature phone. On April 2018, HMD Global brought Nokia 1, Nokia 6 (2018), Nokia 7 plus and Nokia 8 Sirocco to the Indian market.

The announcement comes amidst the onslaught of new product launches from the leading Chinese smartphone brands. Shortly after the India availability of these new smartphones, Pekka Rantala, Executive Vice President & Chief Marketing Officer, HMD Global and Ajey Mehta, Vice President, India spoke to BGR India.

What’s Nokia’s biggest lesson in its first year?

Pekka: The first year of our operations have been extremely encouraging – the response from consumers, partners and the ecosystem has been overwhelming. As we started to script the next chapter for Nokia phones, we wanted to capture the hearts and minds of this next generation – not through the tech and spec race but through a new inspiring purpose-led-approach that capitalizes on the overall user experience.

During the first year of our operations in 2017, we managed to bring 11 new Nokia phones to the market, that’s simply incredible for any company to achieve in such a short span of time. In 2017, we sold more than 70 million Nokia phones across the globe and are now available to buy in over 80 markets, with over 170+ countries. All within a year of launch and is across both feature and smartphones. But this is just the beginning of our journey – our long-term ambition is to be among the top smartphone players globally.

Ajey: 2017 for us was the year to really build the foundation of the long term Nokia move. We focused on appointing 510 distribution centers, ramped our production capability in India and rolled out our care centers. We also built our team and built our marketing capabilities. I think one of the big focus has been to expand our presence in the offline segment on a large scale and build strong relationship with both offline as well as e-commerce partners. This exercise helped us learn that there is a lot of interplay between the offline and online channels.

Being on both online as well as offline segment is very important for us. I think one big lesson from 2017 is the importance of offline channel and getting the interplay of both retail channels and we want to have a thoughtful presence across all retail channels.

Would Nokia retail stores be back in business?

Ajey: Yeah. We already have a sizable feature phone business and what really drives this business for feature phones is the long tail of retail chains. The fact that we are covering 110,000 stores shows our feature phones are available in long chain of outlets. In fact, we even pushed our entry level smartphone, Nokia 2, to nearly 80,000 outlets. So the idea is to be as widely distributed as possible, especially in the low-cost smartphone segment.

Watch: Nokia 7 Plus First Look Video

Nokia smartphone availability was limited last year. Any comments?

Ajey: Nokia has always been known to deliver a reliable, honest, simple, easy to use experience. We wanted to make sure that experience is up to the mark even if it affected the availability of certain products. We also were clear in our mind that every phone sold in India will be “Made in India”. We also wanted to ramp up our distribution and logistics capabilities before we go to markets. Yes, we indeed wanted to test the market because the industry has also changed. We cannot behave like we did about 8 to 10 years ago when we were the market leaders. Market has moved on, consumers have moved on and the expectations are different right now. So, we wanted to test the waters and see various price points.

We started in the sub-Rs 20,000 category with the Nokia 6, Nokia 5 and Nokia 3 to get a sense of what works and what doesn’t. The challenge was understanding what kind of residual opportunity was there for the brand. In the past six months, our teams have received a lot of positive feedback and now, we are going into the market a lot more wiser (laughs). Our goal for 2018 is to expand our product portfolio, drive innovation and collaborate with more partners and most importantly, deepen our customer service.

Could we see more online-only products in the future?

Ajey: Our channel strategy is function of the consumer we are targeting and the product we are launching. We are going for a particular profile of customers with high-end device. We actually study the behavior of consumers including where they shop and who does the consumer hand out to. Based on these consumer buying decision, we will determine our channel strategy.

Any comments on the rather steep Nokia 6 (2018) pricing?

Pekka: Our ambition is to set new standards in design, material quality and manufacturing innovation across every tier of products by continuing to build on all the hallmarks of a true Nokia phone experience – reliability, quality and usability. Hence our approach has revolved around three key pillars – focus on real-life experiences, design, build quality and craftsmanship and pure, secure, up-to-date Android. We are the only smartphone manufacturer globally to deliver on the promise of monthly security updates – your Nokia smartphone gets better with time. Our intent is to offer a quality user experience irrespective of the price points. Everyone should be proud of their Nokia phone! In delivering products that offer this experience, it is our endeavor to also offer great value to them.

We want to make sure that we are building a sustainable business

Ajey: We will not be the cheapest product in the market. We want to make sure that we are building a business that survives in the long term. We look at what value we deliver to the consumer and we price our products accordingly. We will strive towards delivering the best possible experience to our consumers and then we look at the price that a consumer would be willing to pay for the experience.

Any plans to add a 4GB variant for the Nokia 6 (2018)?

Ajey: Our product strategy is centered around three pillars – design and craftsmanship, pure Android experience and real life experience. We are conscious of the specs race in the market but for us, it is rather important to launch a product that delivers on experience. For example, Nokia 8 has Zeiss optics, Nokia 6 has Dolby audio and all our other products support OZO audio. We have put technology with purpose and we will shy away from compromising on specifications. We will put whatever is important for a phone and I can say that strategy has worked well so far. Our products may not be disruptive but they will definitely be competitive. Answering your question, we have nothing to announce right now but we are working towards offering a wide range of products.

How has the response to the Nokia 7 Plus been like so far?

Ajey: There is an overwhelming interest in the Nokia 7 Plus. Consumers are excited about it and some people who have used it have given us really positive feedback. We see Nokia 7 plus as the product that can do really well in India.

When is Nokia 8110 4G “The Matrix” phone coming to India?

Ajey: We will be bringing Nokia 8110 4G to India at a later stage. As soon as we are ready, we will announce and for now, the plan is to bring it to India.

What is your outlook on Make in India, and the recent duty imposed on components?

Ajey: The phased manufacturing program with a plan to manufacture components in 3-4 years is a really good initiative from the Government of India. We are speaking to our partners Foxconn and we will start to bring components manufacturing into India over a period of time. We also note that there is some work that needs to be done to support component manufacturing. It needs to be attractive for the component manufacturer also to manufacture in India. There is a need for ancillary manufacturers to be supported in order to fully realize the goal of local manufacturing.

Where do you see HMD Global in the next few years?

Ajey: We are looking to be among the top five smartphone players in India in 2-3 years.

Could we expect radical products such as the N-Gage or the N91 slider design by HMD Global?

Pekka: Innovation where it matters most to the consumers is what we will continue to focus on. We have already become craftsmen of the industry. Every single Nokia smartphone has a very distinct character – this is very different from what you see in the market today. Even our take on Android is extremely unique & innovative – we are the only OEM that is focused on delivering to our promise of pure, secure and up-to-date Android. Today, Nokia 8, Nokia 6, Nokia 5 and Nokia 3 run on Android Oreo. Now, we have further strengthened this promise with our collaboration with Google for Android One for Nokia 8 Sirocco, Nokia 7 plus and the new Nokia 6. Nokia 1, our most affordable smartphone also runs Android Oreo.

Innovation where it matters most to the consumers is what we will continue to focus on

Specifically, on features, we launched our fist flagship – Nokia 8 with three industry firsts – Zeiss, Nokia Ozo Audio and #Bothie (dual-sight). Now we bring some of these innovations across our range e.g. the new Nokia 6 comes with Zeiss optics and Dual-sight. We introduced 2-day battery life on Nokia 2 and now bring it to Nokia 7 plus. And, that will remain our approach towards innovation. Even on feature phones, we reinvigorated the category with the launch of Nokia 3310 last year. This, year we took another step forward with the Nokia 8110 – not only in terms of form factor but also functionality.

 

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  • Published Date: April 25, 2018 2:49 PM IST