New Nokia Mobile Phones Gamble


nokia mobile phonesThe story of Nokia mobile phones is a quintessential grace to grace tale. Would sentiments and emotions help resurrect the brand?
The story of Nokia mobile phones is a quintessential grace to grace to extinction tale; then an ultimately vain attempt to recreate the DNA and resurrect the brand; before this latest attempt to force life into a worn-out corpse.
Many millennials would find it hard to believe Nokia mobile phones were a fabric of everyday life when GSM was beginning to be a thing. Most met Nokia mobile phones in their dying days when they could no longer cope with the onslaught of the iPhone and Android devices.
When HMD Global announced last year of their intention to start making and selling Nokia mobile phones this year, the strategy was blatantly obvious: use an iconic name and brand to make money.
Of course, HMD Global never explicitly said that. The pitch from them was along the lines of satisfying our abhorrence of allowing iconic things to become extinct. In other words, they were preserving an important part of the world’s history.

A brief look at Nokia’s history

The prospects of the new iteration of Nokia mobile phones cannot be understood without a look at what came before. In brief, once upon a time, Nokia was the undisputed king of mobile phones.
It wasn’t always like that for the company based in Finland though. The momentous moment (1998) as the premier manufacturer of mobile phones came six years after they launched their first mobile phone, Nokia 1101, in 1992.
Nokia held that position for 14 years before Samsung with their Android powered Smartphones and Apple with the iPhone overtook Nokia and never looked back.
At a point inside those 14 years, Nokia mobile phones were so dominant that 50% of the world’s mobile phone subscribers used a Nokia handset. Nobody could have predicted the spectacular fall of Nokia at that point in 2005. But the iPhone happened in 2007. Followed shortly by Android devices.
Nokia failed to recognize the threat posed by these two forward-looking upstarts. By the time they tried to respond, it was too late.
The final nail in the Nokia coffin were a series of bad business decisions chiefly by Microsoft who bought the company in 2013. Then they (Microsoft) finally admitting defeat last year after trying unsuccessfully to push the windows mobile operating system through the Nokia brand.

Enter HMD Global and Foxcomm

Somehow, the new Nokia mobile phones are most closely linked with HMD Global. Perhaps that is because, the company, founded last year, is made up largely of former Nokia executives. And besides, the company is based in Finland, Nokia’s ancestral home.
However, Foxcomm actually had more to do with the new Nokia than HMD as far as finances are concerned. Foxcomm, fronted by FIH Mobile, guaranteed and paid the $350 million required to get the license to use the Nokia name from Microsoft.
While HMD got the right to use the Nokia name on handsets and other devices, Foxcomm got permission to use a manufacturing plant in Vietnam to produce smartphones.

HMD Global’s strategy for success

The reasons why Nokia failed are old and over rehashed. The issue is how Nokia is going to succeed in the future after Microsoft with their huge cash reserve couldn’t do it.
HMD is not going to compete with the Samsungs and the iPhones. At least for now. They do not even intend to compete with mid-range OEMs. They are going for the feature phones segment of the market.
That makes sense on a number of levels. The smartphone business is plateauing fast. And coupled with the competition of already established players, it would be difficult to succeed in the mid or high-end segment of the market.
The feature phones niche however witnessed of growth of about 30% especially in regions like Africa. While there is a growing middle class in these regions, most people still prefer to buy the cheaper feature phones.
Nokia intends to exploit this by making the next generation of Nokia phones cheap. They are to be sold at about $51.
Apart from the price, HMD decided to use an operating system 90% of the world is comfortable with, the Android OS.

Riding the wave of nostalgia to success

The biggest news of HMD’s attempt to bring back the Nokia phone was the return of the old-time classic, the Nokia 3310.
The 3310 was first launched in 2000. The simple phone for some curious reasons turned out to be the company’s all-time best-selling phone. It sold over 125 million units by the time production was halted.
But HMD did not just wheeled out old 3310s from a long forgotten warehouse, dusted them and pushed them out to market shelves. A few modifications were done to it.
The screen, though still small at 2.4 inches, is now colorful and contains a few icons. The phone now comes with an Opera Web browser, and a back camera. Making a comeback in the new phone is the classic Snake game, the Nokia tone and the classic structure. Though it is now a bit lighter.

Uncertain future

It is unlikely people who used to use and love Nokia would dump their current phones and switch to the new Nokia. HMD knows that. They hoped though that people would join the bandwagon by getting the phones as a second phone or buy it for a friend or family as a gift.
The ridiculous battery life of 31 days standby time is a good selling point. At least that is something poor communities hit by crippling power shortages would find very useful.
The big question is whether the phone would make it this time around. The only way to make that judgment would be the reception from the public. The execs at HMD are not making any big optimistic pronouncements. Everything they do related to the phone is low-keyed.
Even the launch of the phone at this year’s World Mobile Congress was without fanfare. It took less than 20 minutes. They are hoping though that the survival of the phone would not be that brief.
The lesson from this is simple: sentiments and love for old and trusted brands can be a good marketing strategy for firms. It doesn’t matter if the company is old or new, they can always pull at the heartstrings of consumers to get them to open their wallets happily.


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