 | « Back to article | Print this article |
Can the launch of smartphones under its own brand name by Finnish company HMD Global — despite having a licence to use the Nokia brand which it bought from Microsoft — help it regain its once dominant position in the mobile phone sweepstakes in India, where it was once routed?
In 2009, Nokia was the country’s largest MNC with revenues of $4 billion and a market share touching 80 per cent 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 for exports, it had to shut down operations in 2014.
But recently, HMD announced a new strategy, saying it will come out with its own branded smartphones in 2024 across the globe.
This triggered speculation that it could be curtains for the Nokia brand, at least in the smartphone market.
But company executives clarified that it will continue to make Nokia phones and move to a multi-brand strategy across the globe.
Nokia’s fortunes in the smartphone market have seen a plunge in India.
According to Counterpoint Research data, its market share fell from 4.5 per cent in 2013 and stagnated at a mere 0.4 per cent in 2022 and 2023, dislodged by the aggressive Chinese companies and by South Korean giant Samsung, even though Samsung was once number two to Nokia in its heyday.
However, it has been able to push the pedal in the lower end feature phone market even though the Chinese company Transsion is at the top of the pecking order, controlling 28 per cent of the market.
But Nokia has been able to pull back its market share which fell from 23.8 per cent in 2012 to 12.8 per cent in 2022 by making a smart comeback.
It increased its market share to 14.9 per cent in 2023.
Brand experts differ on whether building a new brand from scratch will work in India and globally.
“It is the story of a fallen prince from once being the undisputed leader of the mobile business,” said Sandeep Goyal, chairman of Rediffusion.
“Will a rebranding work? Very unlikely.
"It will take cutting edge technology, great innovations, superlative design and huge investments in brand building to cover a global market and succeed.”
Experts in the mobile business also say it could be risky. Neil Shah, founder of Counterpoint Research, called it a double-edged sword.
“For an OEM transiting away from an established and nostalgic brand such as Nokia, it will have some effect on the overall trust and brand equity of the OEM.
"The brand name has been a saviour for its feature phone business which has been profitable and allowed the company to dabble in the broader smartphone and services segment,” said Shah.
He points out that the Nokia brand has had a minimal effect on smartphones so moving forward, this could actually be a blessing in disguise to come to the market with fresh HMD branding, especially in smartphones.
He cautions, though, that building a new brand in a crowded and mature smartphone market will be an uphill task and will 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 the residual value will provide an opportunity to ‘leverage and rejuvenate’.
“What HMD Global is trying to do is a complete disconnect with the legacy brand and what it means and building a new one ground up.
"It’s not an easy task,” said Mathias.
