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New Nokia Strengthens Brand with Google's Android One & a Curved Publication date: 25 Feb 2018 Author: Omdia Analyst New Nokia strengthens brand with Google’s Android One & a curved display smartphone Brought to you by Informa Tech New Nokia strengthens brand with Google’s 1 Android One & a curved display smartphone At MWC 2018, Nokia-brand licensee HMD Global unveiled a new Google relationship and five striking new handsets, notable features include: - Pure Android One platform as standard: HMD has extended its - Nokia 6 (2018): dual anodized metal design; 5.5” 1080P IPS display; existing focus on delivering a “pure Android” experience with 16MP rear camera with Zeiss optics; Snapdragon 630; LTE Cat 4; Android monthly security updates, with a commitment that all new One; availability: Latin America, Europe, Hong Kong, Taiwan, rest of smartphones would be part of Google’s Android One program, or APAC, dual & single SIM; Euro 279. at the lowest tier, Android Oreo (Go edition). - Nokia 7 Plus: dual anodized metal design; 6” 18:9 HD+ display; 12MP - New Nokia 8110: a colorful modern version of the original rear camera with Zeiss; 16MP front camera with Zeiss; return of Pro “Matrix” phone; 4G LTE featurephone including VoLTE & mobile camera UX from Lumia 1020; Snapdragon 660; LTE Cat 6; Android One; hotspot; running Kai OS, Qualcomm 205; expected availability: availability: China, Hong Kong, Taiwan, rest of APAC, Europe; dual & MENA, China, Europe; Euro 79. single SIM, Euro 399. - Nokia 1: Google Android Oreo (Go Edition); the return of - Nokia 8 Sirocco: dual edge curved display, LG 5.5” pOLED; super colorful Nokia Xpress-on swapable covers; MTK 6737M; 1GB compact design; steel frame; Gorilla Glass 5 front & back; 12/13MP rear Ram; 8GB storage; 4.5” FWVGA IPS display; availability: India, dual camera with Zeiss; Pro Camera UX; Qi wireless charging; IP67; Australia, rest of APAC, Europe, Latin America; dual & single SIM; Android One; Snapdragon 835; LTE Cat 12 down, Cat 13 up; availability: $85 Europe, China, MENA; dual & single SIM; Euro 749. Our analysis With these announcements, HMD is shrewdly building a strong Google relationship to support its emerging market entry tier smartphone business at the same time it is investing in attractive premium designs to target a revival of Nokia in Western Europe. Nokia used to be the largest maker of both mobile phones and smartphones, HMD’s strategy clearly aims to return Nokia to be a mobile market leader, even if it’s too early for HMD to realistically target displacing Samsung or Apple. To date, HMD has married excellent industrial design with strong brand and channel knowledge. In future, HMD must deepen its innovation to justify premium margins and ensure new Nokia smartphones live up to the brand’s image. Use of Google Android One will raise awareness of Nokia smartphones HMD and Google are ideal partners on Android One because of the Nokia brand’s global reach, strong current emerging market featurephone presence, extensive smartphone portfolio and the lack of legacy Nokia Android software bloat. As a new entrant, HMD has no history of needing to amend or add to Android OS to cross promote services and attempt to make it usable. Since the Nokia smartphone re-launch HMD has positioned Nokia smartphones as leaders for security updates and a “pure Android” experience. Android One is a natural extension of this approach and will help HMD increase visibility among operators, and enterprises through Google’s latest Android for Work initiative as well as savvy consumers looking for pure Android alternatives to premium priced Google Pixel 2 phones. HMD will build on good year one Nokia smartphone shipment volumes © 2020 Omdia. All rights reserved. Unauthorized reproduction prohibited. New Nokia strengthens brand with Google’s 2 Android One & a curved display smartphone Nokia smartphones had a good first year following the re-launch of the Nokia brand on smartphones effectively from a standing start, because there was a period when Nokia smartphones were not present in the market. Despite starting from scratch, HMD still shipped over 9 million Nokia smartphones in 2017, slightly over 12% of their total mobile handset shipments. HMD operates in over 80 countries now. HMD shipped many more smartphones in 2017 than established brands such as HTC which have had no period of market absence. Given HMD only started shipping models internationally at the very end of Q2, its smartphone volumes in 2017 was more on an annualized basis than brands such as Sony or Lenovo. In its first year, HMD’s Nokia smartphones delivered strong value for money and solid but not inspirational innovation because of the limited time HMD had to bring the models to market. In 2018, this portfolio demonstrates HMD is seeking to innovate as well. Nokia 8 Sirocco proves HMD aims to target premium smartphone buyers not just emerging markets Nokia 8 Sirocco’s curved design uses a premium steel frame, the same material Apple uses on the iPhone X. Its shape has echoes of the organic Nokia concept phones of the early 2000s as well as Samsung’s Galaxy S portfolio of the last few years. Nokia 8 Sirocco is an extremely attractive design. Nokia 8 Sirocco’s extremely compact design will be especially appealing in Western European markets where more consumers use and prefer smaller smartphones. IHS Markit’s active installed base data shows 78% of Western European consumers use a phone with a 5.5” or smaller display compared with 65% in Asia or 60% in North America. In leading markets of Asia the difference is more pronounced, In South Korea just 52% use a smartphone with a 5.5” or smaller display, similarly 41% in Taiwan or 46% in Hong Kong and 46% Singapore. The bulk of HMD’s initial Nokia smartphone shipments have been low and mid-tier models. But now, with the Nokia 8 Sirocco’s design, HMD is increasing its focus on premium consumers. The Nokia 8 Sirocco’s appearance is closer to Samsung’s “edge” flagships in design, than Samsung’s own recent offerings, because Samsung has gradually reduced their display’s signature curvature since the original Galaxy Note 4 Edge launched in late 2014. Turnaround for Nokia handset business will be taught in business schools Nokia (the company) has executed a masterstroke in recent years. Faced with a mature mobile phone business with significant manufacturing cost structures and rising competition from Apple, Samsung, Google and Chinese handset makers, Nokia successfully sold its devices unit to Microsoft, with a short three year non-compete clause. Microsoft not only paid Nokia for this business but subsequently invested significantly more to restructure the business, and eventually to shut it down. In late 2016, in effect Nokia re-entered the smartphone business by licensing its brand exclusively to HMD Global with an outsourced manufacturing business model closer to the model of Apple’s iPhone business than to old Nokia. HMD is partnering with Hon Hai Precision, commonly known As Foxconn, on the manufacture of Nokia-brand handsets. Impressively, the initial investors in HMD did not include Nokia itself. In effect, Nokia (the company) has persuaded another company to pay to restructure its legacy business and later it has engineered the re-entry of Nokia to the smartphone market again funded by external investors, most likely Chinese firms. HMD attempts to do for Nokia phones what Apple achieved with iPod & Mac OS X © 2020 Omdia. All rights reserved. Unauthorized reproduction prohibited. New Nokia strengthens brand with Google’s 3 Android One & a curved display smartphone Apple successfully turned around its business through a combination of new products such as the iPod and continual improvement in its Mac computers after the launch of the next generation Macintosh OS X. HMD is attempting to do the same for Nokia in smartphones. Unlike other OEMs, HMD is not copying Apple's products but its business turnaround. This is a tough but not impossible task. On the basis of these new smartphones, IHS Markit expects HMD to successfully increase Nokia smartphone shipment volumes using this expanded portfolio in 2018. But long term, HMD must invest significantly more in camera technologies and innovation to be competitive at the top end of the smartphone market than it has done to date. © 2020 Omdia. All rights reserved. Unauthorized reproduction prohibited. New Nokia strengthens brand with Google’s 4 Android One & a curved display smartphone Citation policy Request external citation and usage of Omdia research and data via [email protected]. Omdia consulting We hope that this analysis will help you make informed and imaginative business decisions. If you have further requirements, Omdia’s consulting team may be able to help you. For more information about Omdia’s consulting capabilities, please contact us directly at [email protected]. Copyright notice and disclaimer The Omdia research, data and information referenced herein (the “Omdia Materials”) are the copyrighted property of Informa Tech and its subsidiaries or affiliates (together “Informa Tech”) and represent data, research, opinions or viewpoints published by Informa Tech, and are not representations of fact. The Omdia Materials reflect information and opinions from the original publication date and not from the date of this document. The information and opinions expressed in the Omdia Materials are subject to change without notice and Informa Tech does not have any duty or responsibility to update the Omdia Materials or this publication as a result. Omdia Materials are delivered on an “as-is” and “as-available” basis. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in Omdia Materials. To the maximum extent permitted by law, Informa Tech and its affiliates, officers, directors, employees and agents, disclaim any liability (including, without limitation, any liability arising from fault or negligence) as to the accuracy or completeness or use of the Omdia Materials.
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