5 things Nokia should consider before re-entering India

Nokia’s re entry into the mobile phone market is a nostalgic moment for many of the Indian mobile phone users. For many of us, Nokia was the first mobile phone we used, and we had our first experience with the now 'ubiquitous' mobile device via Nokia.

Then Android came and swept the market, catching Nokia off guard, which misread the new wave of smartphones and consumer needs in emerging markets. As a result, it ended up losing significant market share to Samsung and BlackBerry in 2011. Nokia’s decision of going ahead with Windows over Android to lure the larger enterprise base with a rather convoluted product positioning & missing pure Windows experience led them to a lose the battle in the hyper competitive mobile market.

READ ALSO: Good news: Nokia confirms comeback to smartphone business with Android phones, tablets

New deal: A win-win situation for all

It is a win –win for HMD global Oy ("HMD"), FIH Mobile Limited ("FIH") and Nokia Technologies. FIH & HMD will get the Nokia branding rights and business assets, including its Hanoi manufacturing facility, global distribution, fulfillment and supply chain networks. HMD ‘s market entry with an existing leading brand name will surely help in bringing the products to the market quickly. Meanwhile, Nokia technologies will continue to receive the royalty for its brand name and patents.

Here are the five things Nokia should consider for re-entering India

India’s mobile market has dramatically changed in last few years. LTE devices shipment has increased from 11% in Q1 2015 to 66% in Q1 2016 adding many new players who are exclusively taking their game on 4G devices. E-tailers have become a significant contributor for selling the devices across India. However, the dynamic nature of Indian market suggests that it is not too late to re-enter considering a few critical aspects like:

The game is still on for feature phone – Feature Phone market in India is declining but still constitute around 56% of the overall mobile phone market and bigger players are taking the share in this segment. Nokia was the undisputed leader in the Feature Phone market and still enjoys a high brand recall especially in the lower tier cities and rural parts of the India. It will add a significant value if HMD uses “Nokia” brand name to capture this segment quickly.

Provide a pure Android experience – In presence of so many Android smartphone options at all price points, Indian smartphone users never really embraced Windows mobile OS running on Nokia Lumia range of smartphones. With the reentry, Nokia should target to provide pure Android experience while adding some of its popular features from its existing apps library. Nokia’s device design capability coupled with the leading OS ecosystem will give a compelling reason for smartphone users to consider Nokia.

A focused portfolio in the entry level & camera focused devices in the mid end segment – In India, 3/4th of smartphones sold in CY2015 were priced below $150. Affordable devices with Nokia’s brand name will definitely appeal to first time smartphone users. Also, Nokia Lumia devices were known for great camera and image capturing capability, which should be capitalized upon in the mid segment.

Rebuild its existing distribution network – Nokia should start rebuilding its distribution network with its old partners. Reviving the relationship with erstwhile distributors and network operators and bringing them back to the fold will be crucial to the reentry.

Leverage the edge of Foxconn – This is a second chance for “Nokia” brand, however comes at a time when the mobile phone market in India is hyper competitive. Foxconn has tactical advantage of being a leader in device manufacturing. This new alliance should leverage Foxconn's core competency of great build in designs and ability to push the volume in the market to tackle the competition.

(The article is authored by Jaipal Singh, Market Analyst at IDC)

(Image: Indiatimes)