A Familiar Name Returns to the Device Market
Today marks the official completion of the deal between Microsoft and the newly formed HMD global, the company that’s licensed the Nokia brand to create a portfolio of mobile devices.
Nokia’s catastrophic tumble from the pinnacle of the mobile phone market has been extensively documented, but the brand remains well-recognised. Many people around the world recall the Nokia name unprompted and there’s plenty of nostalgic sentiment toward a brand that for a lot of people represented their first mobile device.
Nokia broke all records in the mobile phone market. Its products still account for the seven of the 10 best-selling phones of all time, and the company has sold a staggering 5 billion units. It created the most recognised ring tone on the planet and it pioneered many aspects of mobile phone technology. However, its fall from grace has seen the brand all but disappear from the smartphone market and although it’s continued to remain a meaningful supplier in the feature phone segment, its share has declined there too.
HMD global is hoping to reverse the brand’s fortunes in the device market and bring the much-loved brand back to life. Although it’s not announcing any new phones today, it plans to reinvigorate the feature phone range, which will form a solid foundation for its business initially, and follow this with a portfolio of smartphones based on the Android operating system.
We believe the key to the company’s success will lie in offering products that match the original Nokia attributes of quality, ease of use, reliability and distinctive design. To help it meet this challenge, it’s signed a deal with a dedicated manufacturing partner, FIH, a subsidiary of Hon Hai Precision Industries, better known as Foxconn. Working with the world’s largest mobile device manufacturer will grant it access to many of the latest materials and technologies needed to make distinctive devices.
However, this alone will not be enough. HMD global will need to invest significant amounts of money in marketing its Nokia products and must achieve significant scale in the global smartphone market quickly if it’s to create a profitable and sustainable business. CCS Insight is bullish about the company’s prospects; we recently predicted that Nokia-branded Android smartphones will grab 5 percent global market share by 2019. For more details, see CCS Insight Predictions for 2017 and Beyond.
Nokia built its business on the mantra of connecting people. HMD global will be hoping that the brand’s connection is still strong enough with consumers to give it an edge in the current sea of smartphone sameness.
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