If we are believe analysts, then the Nokia and HMD’s launch of the global edition of Nokia 6, Nokia 5, Nokia 3 and the nostalgic Nokia 3310 is just a teaser.
Ian Fogg, head of mobile analysis at IHS, claims that the launches were just to bide time for more research and development to offer more innovative flagship phones in the near future.
“HMD is not aiming to achieve similar volumes to Nokia in its prime. It does not need to be a major success and be profitable because of its different business model and organizational structure to old Nokia. HMD is a start-up company which is working in conjunction with Foxconn to bring innovative new Nokia handset to market,” Fogg said.
At old Nokia’s peak in 2008, it had shipped 468 million handsets, of which 60 million were smartphones. It had a mobile market share of 41%. Currently, no handset player has that kind dominance presently -- current leader Samsung had just 19% share in 2016. And, the most profitable player in the market now, has a share of 12% handset market share, and still just 15% of the smartphone market.
“This initial range is just the start, and targets a segment where HMD could bring products the quickest. We expect HMD to offer more premium handsets, especially centred around imaging capability, once HMD has had a little more time for its research and development teams to operate,” Fogg explained, adding, that “once R&D is complete, HMD’s goal is to bring product portfolios that are indistinguishable from a true Nokia-made handset and fully deliver on the brand promise.”
HMD must juggle innovation with brand nostalgia,
The senior analyst from IHS claims that HMD must balance two competing brand goals with its new handsets. “HMD must appeal to those consumers who recall the Nokia brand from when Nokia was the leading handset and smartphone manufacturer in the early 2000s while establishing Nokia as a modern and up to date brand again known for innovation,” Fogg explained.
However, he also said that the launch of the new re-imagined Nokia 3310 feature phone threatens to overshadow HMD’s modern smartphones. “HMD must avoid the Nokia brand being seen as purely a nostalgia brand.”
HMD’s business model is inspired by Apple, not old Nokia
In effect, HMD is a start-up company, with a start-up culture, despite its use of the established Nokia brand. The structure of this new Nokia operation is closer to the model of Apple than it is to the Nokia of old, Fogg claims.
“HMD partners with Foxconn on the engineering and manufacturing of its models. This lowers cost but has enabled HMD to offer leading materials design work in the industrial design of its range, this is especially notable in the current top of the range Nokia 5 model,” he added.
Withings’connected devices will strengthen HMD’s Nokia portfolio
IHS also believes that partnering with Withings in the wearables category will strengthen Nokia smartphones position in the market. “Nokia owns Withings which offers smartwatches, fitness trackers, smart bathroom scales and home blood pressure monitors. By working together, HMD can compete not just with the mass of Chinese smartphone brands, but with the innovation leaders such as Apple and Samsung who both have extensive wearable and health-focused mobile products,” Fogg said, adding, that this was just the start for HMD.