Can Finnish company HMD Global’s launch of its own branded smartphones, despite having a license to use the Nokia brand it bought from Microsoft, help it regain its dominant position in the Indian mobile phone market? Where was it ever? routed?
In 2009, Nokia was the country’s largest multinational with revenues of $4 billion and a market share that touched 80 percent in 2010. After this, its fortunes fell. Although it had been the first global player to set up an assembly plant, not only to assemble phones for the local market but also for export, it had to close its operations in 2014.
But last week, HMD announced a new strategy, saying it will launch its own branded smartphones in 2024 worldwide. This sparked speculation that it could be the curtain call for the Nokia brand, at least in the smartphone market.
But company executives clarified that it will continue to make Nokia phones and adopt a multi-brand strategy around the world.
Nokia’s fortunes in the smartphone market have plummeted in India. According to data from Counterpoint Research, its market share fell from 4.5 percent in 2013 and stagnated at just 0.4 percent in 2022 and 2023, ousted by aggressive Chinese companies and the South Korean giant Samsung, despite that Samsung was once number two. to Nokia in its heyday.
However, it has been able to step on the accelerator in the low-end feature phone market even though Chinese company Transsion is at the top of the pecking order, controlling 28 percent of the market.
But Nokia has been able to regain its market share, which fell from 23.8 percent in 2012 to 12.8 percent in 2022, thanks to a smart comeback. It increased its market share to 14.9 percent in 2023.
Brand experts differ on whether building a new brand from scratch will work in India and across the world. “It’s the story of a fallen prince who was once the undisputed leader of the mobile business,” said Sandeep Goyal, president of Rediffusion.
“Will a rebrand work? Very unlikely. It will take cutting-edge technology, great innovations, superlative design and enormous investments in brand building to cover a global market and be successful.”
Experts in the mobile phone business also say it could be risky. Neil Shah, founder of Counterpoint Research, called it a double-edged sword.
“For an OEM moving away from an established and nostalgic brand like Nokia, it will have some effect on the overall trust and brand value of the OEM. The brand has been a savior for its feature phone business, which has been profitable and has allowed the company to foray into the broader smartphone and services segment,” Shah said.
He points out that the Nokia brand has had minimal effect on smartphones, so in the future, this could be a blessing in disguise to hit the market with a new HMD brand, especially in smartphones.
He warns, however, that building a new brand in a mature and saturated smartphone market will be an arduous task and require a lot of dollars.
Other brand experts say Nokia still has a lot of residual brand value. Brand expert Lloyd Mathias, who has worked with many brands such as Pepsi, Motorola and Tata Teleservices, said residual value will provide an opportunity to “leverage and rejuvenate”.