HMD forays with 5 strengths – A startup with many plus points
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Nokia’s new avatar in the form of Nokia 150 through HMD has drawn a lot of attention, with all tech gazers writing the pros and cons of this strategy and carrying the thought that feature phones are difficult to excite now and so, a focus on Smartphones would have triggered greater impact.
But, I would differ a bit here, at least from India perspective. With the maiden Featurephone announcement taken place, simultaneously, with the official launch of HMD driven Nokia brand, the first and foremost strength the company seems to have subtly exhibited is the attention it is giving to Featurephones.
It is well established that even as of now, Featurephones cover 60% of the market and recognizing this fact, HMD has started off with a Featurephone. This also clearly sends out the message that it is treating both the segments – Featurephone as well as Smartphones, with equal focus, with no plans to venture into a Smartphone-only or Smartphone-first approach, which is very important for them to gain a substantial market share by volume and command a respectable market share.
The second strength is the well established offline network HMD already has in the country. Offline network becomes very important for any player who wants to scale up and earn a double-digit market share. Take the case of Oppo and Vivo here, which invested heavily in recent couple of years and are now reaping benefits. HMD already has a very strong network in the offline distribution that it inherits through the Microsoft assets. Yes, for Microsoft it did not work as the OS had acceptability issues.
The third advantageous factor is the strong installed base of Nokia brand, within the subscriber base in India today. As a reference point, Nokia 105 is the third most used handset in India even as of now. Such strong and huge presence will make it easy for HMD to pave its way, while it may go at its sweet pace announcing new models, there is a sizeable brand user base making the mesh across the user base.
Fourth, along with the Nokia brand name, HMD would inherit a lot of technology intellectual property that makes it fundamentally strong. A start-up owning or having access to a robust repository of IPs and technologies is much comfortable in having strong value based product portfolio than having negligibly incremental product road map. So, what is prevalent in the market will be much easy for HMD to replicate and improvise to be at least in the race, if not ahead of the curve.
Finally, it’s important to have strong players along the value chain. For HMD, it’s going to be Foxconn as the manufacturing partner. This again brings value to the entire proposition, with economies of scale possible in the quickest possible time period and also accessing the state- of- the-art manufacturing ecosystem necessary to support prompt market innovations.
With all these strengths, HMD is positioned well to go in the Nokia avatar. While it may not become a significant player enjoying a higher market share just from the first year, but it will be definitely a brand to watch out for in 2017 and may be among the fastest growing brands for the year. Let’s hope HMD is able to carry the legacy and responsibility of shouldering one of the most reputed brands of the mobile industry across the globe – NOKIA.
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Faisal drives new initiates at CMR. Having over 13 years of research and consulting expertise in technology domain, he specifically covers Telecom, IP Technologies, Devices, Electronics, Applications and other emerging technologies.
Faisal completed his Master’s degree in Business Administration, specializing in Marketing and Finance. He also holds a Bachelor’s degree in Business Administration.