Nokia smartphones will make a comeback next year, and the current owners of the Finnish brand are betting that the connection it built with billions of consumers during a decade of dominance hasn’t been broken.
HMD Global has secured exclusive rights to use the brand for smartphones from Nokia for the coming 10 years, and will announce new devices running Google’s Android operating system in the first half of 2017, CEO Arto Nummela said in a phone interview.
The former Nokia executive is hoping that consumers will remember the qualities that made the company the leading handset maker of the late 1990s and early 2000s.
“We will be extremely true to the Nokia brand,” Nummela said. “The Nokia brand is known for simplicity, ease of use, reliability and quality. These are the elements that we will deliver together with amazing industrial design.”
HMD, which has said it will invest more than US$500m in the next three years to market the phones and tablets, is facing a steep challenge as it aims to reclaim a position as one of the leading global smartphone makers.
HMD has formed a leadership team partly consisting of Nokia veterans to spearhead the battle. Nokia, which now focuses on mobile networks, will get royalty payments from HMD, but doesn’t have an ownership stake.
A successful comeback for the smartphone brand would be an feat unmatched by manufacturers like BlackBerry and Siemens, which — just like their Finnish rival — fell prey to fierce competition from Apple’s iPhone and other handset makers using Android.
Nokia’s fall from grace, the subject of several books, accelerated under the leadership of former CEO Stephen Elop, who famously likened the company’s situation to standing on a burning oil platform.
A bet on Microsoft’s Windows Phone operating system did nothing to revive fortunes and after Nokia sold the business to Microsoft in 2014, staffing in Finland was reduced to less than a thousand, from more than 24 000 in the golden age.
Today, the two largest players, Samsung Electronics and Apple, control more than a third of the smartphone market, according to data from International Data Corp, with Chinese vendors Huawei Technologies, Oppo and Vivo presenting the largest challenge to the dominant duo.
While HMD controls sales, marketing and distribution of the Nokia brand for smartphones, the manufacturing operations were sold by Microsoft to a subsidiary of Foxconn Technology. The two companies will collaborate on so-called feature phones.
“There is still a consumer segment who will never touch a smartphone, and there is a segment that wants a secondary phone which lasts for a month and has a one-day talk time,” Nummela said. “It will shrink, but it will not disappear overnight, and we will renew our offering also in feature phones, so that we can sustain that funding for our operations in smartphones.”
Nokia veteran Nummela, who most recently was Microsoft’s head of mobile device sales in Asia, Middle East and Africa, says recruiting talent has been easier than ever.
“The love for Nokia is huge and people are eager to join,” he said. — (c) 2016 Bloomberg LP
