Can HMD Global take Nokia back to the top of the handset market?

Ian Scales
By Ian Scales

May 28, 2019

via Flickr © Tjeerd (CC BY 2.0)

via Flickr © Tjeerd (CC BY 2.0)

  • Nobody feels comfortable profiting from another’s downfall, of course...
  • ..but the fact remains that what appears to be Huawei’s inevitable smartphone demise presents an opening for HMD
  • Can it take the one-time global brand leader back to the top again?

Perhaps you only get one chance to shine in mobile phones and then it’s downhill all the way. Look at Motorola. Up and up and then over the cliff. HTC: a brief moment in the sun giving Android its first few years of traction, then down. Microsoft:  Down, down and then really down and out, dragging Nokia with it.

Nokia actually lasted for several years at the top of the global smartphone market post the iPhone launch, although many forget that now.  What did for it was not Mr Jobs, but a series of fatal missteps when it was somehow convinced to adopt Microsoft’s Windows operating system instead of Android (which was really the obvious choice at the time).

And it seems to be the obvious choice now.

Fortunately HMD the Finnish company which has taken on the Nokia brand, plans to revive it using Finnish ingenuity, engineering and radio heritage plus Android, which it has grabbed with both hands.

The company today announced that it has received a top of class Google gold star in the form of more  ‘Android Enterprise Recommended certifications’ for new devices in its portfolio, including the Nokia 9 PureView its five-camera array product, as well as the Nokia 4.2 and 3.2 devices. Nokia says that gives it 14 Nokia branded devices with Android Enterprise Recommended Certification – more than any other smartphone brand, it claims.  The certification means that Nokia has been slavishly adhering to “an elevated set of hardware, software, security update, user experience and other specifications... which are... designed to act as a benchmark for the user experience in a variety of enterprise use cases.”

So with its colours nailed firmly to the Google mast, we’re not likely to hear of any Android forking from HMD, at least for the time being.

HMD Global started out with the Nokia brand when it purchased the feature phone business from Microsoft when it acquired the Nokia phone business in 2014. It then quickly moved into the smartphones launching five  feature phones and six Android smartphones within a year.

Last year it announced a major financial milestone by raising US$100 million from a range of investors to scale the business to keep on churning out the phones. Almost exactly a year ago it claimed the cash would last it for a year as it expanded. And it announced itself a genuine ‘unicorn’ issuing shares that valued it at over $US1 billion.

And HMD is driving the hype, saying it “set out to capture the hearts and minds of the next generation of consumers. Two-thirds of consumers buying a Nokia phone today are below the age of 35 years. Four out of every five consumers are recommending a Nokia smartphone to their friends and family. Over 150,000,000 visits have been welcomed to the website since Jan 2017.”

There appears to be a tail wind for HMD driven by a combination of brand nostalgia and a well-earned trust in Finnish mobile expertise (the founders and much of the staff at HMD are ex-Nokians), but what are the chances that the rising tide will take the company back to the top?

Smartphone users can be a tough crowd. Smartphone reviewers tend to be even tougher with phones always judged by how far short they fall from the industry leaders in terms of the flashy stuff - camera pixel numbers, memory size and so on. Their general approach always reminds me of car reviewers who write off, as it were, the cars that most of us like to drive (and pay for) because they can’t go around corners at high speed.

What  HMD might have to learn, however, is that nostalgia and remembered brand value are all very well, but the technical performance has to be there to back it up.

A recent review in the Hindustan Times, for instance, is summarized by its headline and intro:  “Nokia 4.2 review: HMD Global’s new budget phone is a big disappointment

Nokia 4.2 is yet another good looking from HMD Global. The smartphone also offers premium Android experience courtesy of Google’s Android One platform. But other than that Nokia 4.2 doesn’t have much to offer.”

Nostalgic flash but no 2019 substance, in other words. And I’ve seen other phone reviews like this. Is it possible to deliver on both?

Lessons from cars

Back to cars. In the last couple of decades we’ve seen several car manufacturers reprise their big hits from the 1960s. In Europe Volkswagen updated its classic beetle and most recently Fiat has done a creditable job of reviving its famous baby car, the Fiat 500 with a recognisable body shape, but completely new technology.

But the car that really scored in this department has been the Mini as re-imagined by BMW. The new mini’s 60s nostalgia is almost completely overlaid by 21st century automotive technology. Like a picture of a childhood friend in which you can just about see the faint outline of the person you know today, the Mini was not so much a reimagining of the basic car, but a reimagining of the car it became when owners ‘hotted it up’ with fat wheels, flared arches, lowered suspension and growly engine. BMW’s imaginings worked brilliantly.

So HMD seemed to be taking a leaf straight out of the automakers playbook with its reprise of the old banana phone with the slider keypad - the Nokia 8110 4G. And they amped it up by producing a yellow version (the original was called the banana phone because of its shape). But unlike BMW they didn’t upgrade the crucial technology to go with it. The result was... a bit of a failure. Reviewers tended to like the slider but usually remarked that, even accepting that it was just a feature phone, while it might be good as a second phone to take to a festival it would never do as your best tech friend.

The lesson should be that walking the superior brand walk might get you noticed and valued to start with, but it has to be a supported by talking the talk (or should that be the other way about?).

Nokia won in the 1990s and early 2000s by simply producing the best phones available at that time, which is why we remember the look of them favourably. HMD’s challenge is to really wow users with its technology to do the same.

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