Nokia: It will take us less than 10 years to catch Apple and Samsung
The CMO of HMD Global, which owns the rights to the Nokia brand in smartphones, believes he has a once-in-a-lifetime opportunity to revive a much-loved brand.
Even if right now it’s a Samsung Galaxy or iPhone that sits in your palm, there’s no denying Nokia’s salience as a brand. Long before app stores were even a thing, the Nokia 3310 introduced millions of us to the concept of mobile phones thanks to its user-friendly interface, robust design and, err, Snake.
But while Nokia will always muster up warm feelings of nostalgia, there remains question marks over whether the brand possesses enough vision to survive in the smartphone era.
Microsoft’s $7.2bn acquisition of Nokia’s devices and services business in 2014 remains one of the most disastrous deals in consumer tech history. Just two years after it was signed, Microsoft was forced to scrap its Nokia-led smartphone business altogether, writing off $950m and cutting 1,850 jobs in the process. In fact, the deal is thought to have resulted in losses of up to $8bn for Microsoft. Nokia phones, it seemed, were destined to become a relic of the past.
But then, in 2016, Microsoft sold its license to sell phones under the Nokia brand. This brand was worth a towering $300bn and controlled 70% of the mobile phone market share at the height of its powers. But Microsoft wasn’t even close to recouping its money on Nokia.
The Nokia phone business was acquired by a subsidiary of iPhone manufacturer Foxconn for just $350m. The remaining Nokia business, meanwhile, focuses on new technology including 5G and high-end virtual reality cameras. And the licence to sell Nokia phones was bought by HMD Global.
READ MORE: Nokia on why it is ‘so much more than the 3310’
HMD Global was formed by former Finnish Nokia employees with the sole purpose of bringing the brand back to the mobile phone market. That includes CMO Pekka Rantala, who previously worked at Nokia for 17 years, latterly as SVP of global marketing, before joining Angry Birds creator Rovio as CEO.
Speaking to Marketing Week, Rantala has all the giddy excitement of someone who believes his bosses may just have pulled off the bargain of the century.
“We were given a once in a lifetime opportunity to revive one of the greatest consumer brands of all time,” he says. “It’s a 152-year-old brand that’s loved across the world. And that love isn’t just about nostalgia either – some of the biggest demand we’re seeing for new Nokia smartphones is coming from millennials who want an alternative!”
Moving beyond nostalgia
There’s no doubting Rantala when it comes to Nokia’s brand awareness. According to YouGov BrandIndex, Nokia (with a score of 93) has more brand awareness among UK consumers than the iPhone (on 92.3).
But when you switch this scoring to quality, the stats paint a very difference picture. Over the last six months, Nokia’s quality perceptions have fallen 2.1 points to just 15.4. Samsung and Apple, which occupy the top two spots, have a combined quality score of 72.5 points.
HMD recently launched the first flagship Nokia device since the deal: the £600 Nokia 8 smartphone. It received positive views from critics, who praised the Android-powered device as a “step in the right direction”. But with Samsung and Apple so far ahead of the pack in terms of sales and market share, and pretty much every handset player struggling to make money out of the smartphone market, does Nokia even stand a chance?
“We’re ready to become one of the leading players,” replies a bullish Rantala. “Yes, there are certain things we can and will leverage from Nokia’s history, but we’re not planning a nostalgia trip or a history lesson this time around. We’re providing something entirely new.”
Being the antidote to ‘boring’ smartphone marketing
The marketing of the Nokia 8 certainly has a fresh feel. One of the phone’s headline features is the ‘bothie’, something Nokia hopes can replace the selfie. Essentially, the Nokia 8 simultaneously takes a photo of who is in-front of and behind the lens, which brings another layer to live streaming, videos and photo-taking. Bothie, HMD hopes, will soon enter the millennial vernacular.
“The bothie gives us a rich possibility for storytelling and something that’s completely different,” he says. “Just having the Nokia brand gives us license to be different. We don’t want to join those smartphone players who just do boring campaigns. The people are bored because marketing wise it is just more of the same right now from celebrity endorsements to focusing on tech and spec.”
We don’t think it will take 10 years to become one of the top smartphone brands.
Pekka Rantala, HMD Global
He adds: “Yes, the market is not easy as there’s lot’s of competition, but we don’t look left or right, we stay laser focused on the consumer and that’s a strategy I’m confident will result in strong sales.”
Rantala also denies there will be any confusion among consumers around the differences between Nokia and Nokia Technologies. He says there is “deep collaboration” between the two, with the Nokia 8 utilising sound technology from Nokia Technologies’ $50,000 OZO VR camera.
Taking on Apple and Samsung
But despite his insistence Nokia won’t trade in on nostalgia, it already has. Earlier this year, it used Mobile World Congress to announce a re-release of the iconic Nokia 3310. Although he won’t share sales numbers, Rantala insists the launch has been a big success.
“People are really going for it. Some want it as a primary phone, while the basic phone market is obviously still a huge opportunity to tap into. The truth is we are really well prepared with big volumes and are about to increase our availability.”
With the likes of Motorola already failing with high-profile comebacks, Nokia’s success doesn’t feel as assured as Rantala would have you believe. Yet, regardless of any scepticism, HMD, he insists, has long-term plans for the Nokia brand that go beyond nostalgia.
“With the Nokia 8, we really think we have a package no one else has. We have the brand, the design and a really special take on Android,” he explains. “Many consumers with Apple devices are using old operating systems, with poor security. We will commit to monthly security updates and will always offer the latest operating system. This promise is resonating well with young people. They are fed up of the offer they have.”
HMD has a 10-year licence to manage the Nokia brand in the mobile and tablet markets. And Rantala confidently concludes: “We don’t think it will take 10 years to become one of the top players. It will take us a lot less time [than that] to challenge Apple and Samsung.”
I really hope that Nokia succeeds. We need more competition in phones. Meanwhile if you want a summary of what went wrong to the brand under Microsoft, Tomi Ahonen is your guy. Here’s one of his classic long blog posts which documented the shambles.
Nokia is attempting to rise above in a world of Apple admirers and Samsung supporters. Clearly, from my perspective, Samsung is fighting a battle that has already been dominated by Apple. There are many individuals who I know that would not switch from Apple to Samsung if their life depended on it. Apple has proved itself to be a loyal brand throughout the course of time and now Nokia wants to be thrown into the mix and prove that it can live up to the leading competitor in the technology industry. Nokia may have a rocky journey to success ahead of them, but I believe that strategic marketing campaigns can play a major part in bringing them to the top. I think back to a brand like Volkswagen, when at the time, it wasn’t desired from anyone but eventually it sold itself through billboards claiming to audiences nationwide that it in face was “the next big thing”. If Volkswagen could do it, then I certainly believe that Nokia can.
He let himself down with: “Many consumers with Apple devices are using old operating systems, with poor security.” If 21% on an old OS is ‘many’, how would he describe 98%?
iOS upgrades for 5 years are one of apples strengths compared with 2 years for Android.
While the bothie is a cool idea, I doubt that it and the old legacy of Nokia are enough per se to revive a brand! The brands of Apple and of Samsung are built upon strong products and clear+distinctive set of values. Besides, Apple is Apple, Samsung is the anti-Apple. What is Nokia now?
Never say never, but last time I checked brand alone doesn’t drive sales as much anymore. Amazon’s steamrolling of the retail industry can highlight this. There’s no value that Nokia can contribute to the market to convince consumers to switch in droves. The moment the company chose Android as their operating system they lost their largest chance to offer a product that’s differentiated from the rest of the market. It’s the software that allows Apple to control 79% of the industry’s profit. Without a unique platform, Nokia will likely end up having to sell inventory at a loss like all the other Andriod manufactures. And no, “Bothie” won’t help.