HMD’s Chief Marketing Officer for Germany Britta Gerbracht did an interesting interview with German tech site WinFuture.de at a local press briefing for the Nokia 8.1 launch in Germany few days ago. The interview turned out to be a hit, with global (and local) tech publications citing claims from the interview, unfortunately with some errors, and a surprising statement about the Nokia 9.
To first clear an honest mistake from the original article (which was corrected) and it was that in 2 years HMD Global sold 70 million smartphones. That’s, of course, not correct and it would’ve been a great result if HMD Global managed that. The 70 million figure comes from an official statement made by HMD’s CEO Florian Seiche at MWC2018 where he said that in 2017, HMD Global shipped over 70 million Nokia phones, feature phones and smartphones. In the first three quarters of 2018, according to Counterpoint data, HMD Global shipped 63 million feature phones and smartphones. Without the fourth quarter of 2018, and combining HMD’s and Counterpoints data, that makes over 133 million Nokia phones shipped in less than 2 years, if anyone is asking.
Now back to this interesting interview. The first interesting statement I would point out is that users, at least in Germany, use their device for a longer period of time compared to few years ago. In other words, they buy new devices less often so HMD is focusing on stuff that can make difference in time like build quality and 2 years of software and 3 years of security updates. Gerbracht said that the use time of devices went from 1.5 years to over 2 years in Germany in the last time, adding that phones today are less of a “symbol of wealth” to people and more a tool for everyday life. I have to point out that this is not true in all markets – for example, in India the time people use their phones before they buy a new one is significantly shorter than in Europe, because of more devices being offered at really affordable price tags (from a European perspective). So take these statements in the context of the local market in Germany.
The second interesting part is that 80% of Nokia smartphone buyers are 35+ years old. Again, it was not mentioned if this stat is for the global level, because HMD often emphasises how a lot of young people buy Nokia smartphones in China and India. To attract younger buyers, HMD is considering getting involved in ESports (as a sponsor?) and in similar activities where young people lead the way. Gaming smartphone like what Razer and others do isn’t something the Company is focusing on at the moment, she said.
The year 2016 was about creating a foundation in the low-to-midrange market, while 2017 is marked as the year of strengthening Nokia’s position in the midrange segment. Globally, the most sold Nokia phone is the Nokia 6.1, with Nokia 7 Plus being a strong seller in Germany alongside Nokia 3.1.
The Nokia phones’ naming scheme, that is often confusing when we directly compare different Nokia devices, will keep its main principle in naming successors of a phone. In other words, after Nokia 6.1 we will see a Nokia 6.2 and then a Nokia 6.3, etc. Which is OK to me, but they should keep the “plus” models under the control in the portfolio.
And now, the most interesting part for the end. In conversations about flagships, HMD Marketing Chief for Germany said that a “new flagship” could be expected soon and that some delays have happened because the device didn’t meet HMD’s internal quality standards. She also said that the upcoming year (2019) will be more about the device in the €300 to €400 market segment, while the “Theme” for 2020 and 2021 includes flagship Devices playing a greater role in company’s bussines.
From what I read here and looking at HMD’s moves for the last two years, they are building their business from the lower end up. That’s a legit strategy and if they can master to keep (or make) the low-end devices profitable, it could be a good foundation for the future in terms of financial stability (so could a successful from top to down strategy be). On other side, that strategy is boring in sense that flagship phone is the best a company offers, and HMD lacking a great flagship makes them less interesting to a general audience.
The rumored Nokia 9 could be a very interesting flagship, despite probably using the 2018 top SoC. It’s penta-lens camera could be a great differentiating factor (under the condition it is really good). The device is rumored to appear early in 2019, with our bets being set on a January launch event.