Within two years of launching the Nokia brand in the smartphone category, HMD Global is focusing on expanding its market share in 25 key countries. According to Counterpoint Research, Nokia has been gaining ground, and has been ranked among top 10 smartphone companies globally in terms of having shipments of around a percent share. Florian Seiche, Chief Executive Officer, HMD Global talks about the comeback story of the Nokia-branded phones and the challenges that the brand faces in India, in a conversation with Business Today's Manu Kaushik. Edited excerpts:
Nokia handsets are strong in markets like UK, Russia and some parts of Middle East. What's the reason you picked up well in these markets? Also, what is your strategy for other markets?
The markets where we have been more successful have a strong Nokia heritage from the past. But we also have our own team, capability on the ground and channel partner network. Russia is a good example where there is a strong Nokia heritage from the past - both in smartphones and feature phones, many channel partners in a retail-driven environment, and a lot of consumer engagement. Then, we have other markets like Middle East and South Africa, where we are seeing strong momentum.
We had made it among the top five smartphone players in 15 markets in just three quarters by Q4 of last year. In Q1, it went up to 20 markets, and in Q2, we managed to feature among the top five players in 25 markets.
We have a so-called focused market strategy, and India is definitely at the centre of our global growth ambitions because there are only a few markets with the same size and opportunity as India. If we look at our own capability to execute and to support the market, we already have a good infrastructure in place in India. In addition to this more traditional execution capability that we have built over many years, we are now aggressive in building the online and digital angle which goes across the sales like the partnership with Flipkart. The traditional way of marketing smartphones is changing rapidly from talking to consumers directly to enabling them to get excited and share their excitement with their friends. We need to be extremely consumer-centric in how we talk about the benefits of our product so that they can feel it's something that gives them value every day.
We are also focusing on starting the sales immediately at the time of the launch. We don't want to build excitement in advance, though.
What's going to be your way of capturing the market? Are you going to be launching phones frequently or stick to limited phones and invest in those devices?
In the last year-and-a-half, we have been building a core portfolio. We have launched quite a wide portfolio because we wanted to make sure that we are present at key price points - from Nokia 1 to all the way up to Nokia 8 Sirocco. Going forward, we would like to be present in the major price points but our focus now is more on creating hit models where we have a chance to have a big seller across many markets with big volumes. We believe Nokia 5.1 Plus and Nokia 6.1 Plus have that opportunity. We can already see the results in China. These smartphones have been received well in China, which is one of the toughest markets. India has a challenging environment too, but we believe we have a great formula for these phones and this is what we would like to roll out globally.
What are the challenges in the Indian market?
The consumers are already very sophisticated, therefore, they are really demanding on specifications. Our challenge is mainly to communicate the unique value they are getting from Nokia phones. We have talked a lot about the Android One, which means the upgrade promise for our phones, the quality, the consumer satisfaction, the care, and all the quality things that we are bringing in. We are seeing extremely positive impact with those fans who are buying Nokia phones.
Do you plan to ramp up your production capacity in India?
In India, we are doubling our manufacturing capacity by the end of the year. Globally, we are expected to grow significantly by the end of this year. We are focusing on the key markets. It's about 25-35 key countries globally where we have doubled our efforts.
What's your big picture view of the global smartphones market?
There is a big trend in the emerging markets to upgrade. Price points are going up. We have already seen that in China. In India, we are seeing the same. I am just coming from a tour from Asia Pacific. In every market - Indonesia, Vietnam, and Thailand - the volume segment is going slightly up on the price point. The $150-$250 retail pricing is a big segment in many markets. We believe this is an opportunity for us.