Nokia’s Closing Window of Opportunity

In India, the Nokia Brand Still Has Some Value

With expectations that Nokia-branded smartphones could come to the Indian market through the recently founded HMD global, below are our thoughts on local sentiment.

At its peak, it seemed everyone in India wanted a Nokia handset. The company had what was arguably the most respected brand name in the country and households across the country aspired to have a Nokia phone. With over 60 percent market share, Nokia had earned its dominant position through good timing, a localised user interface, solid quality and clever marketing.

Even as the shift began from more basic phones to smartphones, consumers in India were longing for the Nokia name on affordable and good devices. To the amazement of diehard fans, that didn’t happen, and the window of opportunity began to close. On a recent channel check, the salesman in a bricks-and-mortar store professed the merits of the hot smartphone brands on the store shelves at the moment — Gionee and Oppo. Local brands such as Micromax and Intex still have mindshare, but the Chinese brands have made rapid inroads into the smallest of neighbourhood stores, where Samsung and Indian brands used to dominate. We also now notice considerably less TV and print advertising from Indian brands than a year ago.

Samsung phones are popular, but, feature for feature, are considered a high-end option. In a country where the average per capita income is about $1,500, a $10 difference can be significant. In some wealthier urban areas, iPhones are not uncommon. When traveling within India by train, we noted that many young professionals were using the iPhone (the iPhone 6 appears to be the common model). This is the real aspirational brand now, but local taxes and income gaps will keep Apple an exclusive product for years.

As a testament to what Nokia meant to many in India, many older phones are still in use by the older generation. Consumers have grown with their handsets and even those who can afford to purchase a smartphone see no reason to abandon a reliable companion. Ironically, for HMD global, this could be a problem. The older generation is still actively using the classic GSM phone when possible, and younger users identify Nokia with the past.

Nokia is regarded as their parents’ or grandparents’ brand. Nokia phones are still sold and are considered pragmatic but also an anachronism. The newer generations of Indians live in the present and they show it. For them, a phone is a smartphone and the brand is either a Samsung or, in an ideal world, an iPhone.

Brand equity can have a short shelf life and it takes continuous marketing along with constant refreshes to avoid becoming a relic. India is one of the markets where Nokia still touches the hearts of a segment of the population. More than nostalgia, it’s real respect, but it will take a perfect combination of localisation, pricing and salesmanship to position the Nokia brand to younger users. Without scale, it’s going to be a tough sell for Nokia to come across as a serious smartphone brand and the longer it takes to introduce its smartphones, the more difficult it will get.