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Why is Nokia, which young people look down on, is still alive? -NOKIA

June 13, 2021

From the dominance of the world’s mobile phone brand to the decline of the era of intelligence, Nokia’s experience has made countless people sigh.

However, the smart phone market is difficult to open, and Nokia has a firm foothold in the feature phone market that the elderly love to use. This is the secret of Nokia’s survival so far.

According to data from Counterpoint Research, in Q1 of 2021, Nokia shipped 11 million feature phones and only 2 million smart phones. The latter is less than 1/5 of the former.

According to a report by the Finnish media mobiili, in 2020, four years after taking over the Nokia brand, HMD’s financial situation has finally improved, from a loss of 295 million euros in 2019 to a loss of 47 million euros in 2020. The CEO of HMD Global said, “We have been profitable since June 2020.”

Feature phones have supported most of Nokia’s mobile phones. In the global feature phone market, Nokia still occupies a lot of shares. According to Counterpoint Research’s Q3 2020 data, in Europe and Asia, Nokia accounted for 40% and 21% of the feature phone market, ranking first.

Market share ranking of feature phones by region in Q3 2020, source from Counterpoint

However, compared with the smart phone market, the market size of feature phones is after all a minority. In the third quarter of 2020, according to Counterpoint and IDC data, global shipments of feature phones were 74 million units, only 21% of smartphones.

So, on the one hand, it is to defend the feature phone market with limited space, and on the other hand, it is to continue to survive in the highly competitive smartphone market. Where is the future of Nokia mobile phones? Can it still keep up with the times?

1. Feature phones support Nokia’s country

At today’s Nokia C20 Plus conference, which lasted nearly 30 minutes, the configuration of Nokia’s new phones was exposed one after another. Its processor uses Ziguang Zhanrui, is equipped with a 4950 mAh battery and uses a 6.52-inch LCD screen material. All are in the standard configuration of low-end mobile phones.

As a low-end phone with a starting price of 699 yuan, its price/performance ratio does not have much advantage. With reference to peers, many mid-to-low-end competing products are iterated with product updates and are superior in performance to Nokia C20 Plus, but the price is lower.

For example, the vivo Z3, which is a mid-range phone released in October 2018, is equipped with a Snapdragon 710 processor and a rear 16 million + 2 million pixels. Now the price on JD.com has dropped to 678 yuan. No matter from camera, processor or screen, VIVO Z3 performs better than Nokia C20 Plus.

Nokia C20 Plus configuration diagram, sourced from Jingdong Mall

However, low-end smartphones are no longer the backbone of Nokia mobile phones. Feature phones are.

In the global feature phone market, Nokia mobile phones occupy an important market share.

According to Strategy Analytics survey data, global feature phone shipments in 2020 will be close to 420 million, of which the top three mobile phone brands accounted for 24.9% of the market share of Transsion, 14.5% of Samsung, and 6.3% of Nokia.

Nokia’s performance in the Chinese feature phone market is also quite impressive.

In 2020, the low-end feature phones released by Nokia include the Nokia 220 in April 2020, the Nokia 225 in October 2020, and the Nokia 6300 in December 2020.

With these mobile phones, Nokia said at the end of 2020 that its “classic 4G mobile phones” (feature phones) in the Chinese market had reached the top sales volume.

Although due to the development of smart phones, the domestic market for feature phones has seldom been paid attention to, and its statistical data is also scarce, but from the data of e-commerce platform, Nokia has good sales of feature phones.

Taking JD.com as an example, the user reviews of some Nokia feature phones have accumulated tens of thousands or even hundreds of thousands. Among them, a Nokia 220 released by Nokia in April 2020 has a cumulative evaluation of more than 100,000. This cumulative evaluation has surpassed most OnePlus mobile phones and also surpassed all Meizu mobile phones.

The strong performance of Nokia’s mobile phones in the Chinese market is mainly due to Nokia’s “lack” of rivals in the Chinese feature phone market.

Domestic mainstream mobile phone brands, such as Huawei, Xiaomi, OPPO, VIVO, etc., have long turned their energy to the competition of high-end smartphones. Even if they deploy low-end smartphones, the prices are generally above 500 yuan.

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In contrast, the price of feature phones is concentrated at 0-500 yuan, which makes Nokia stagger the competition with domestic mainstream mobile phones.

Nokia feature phone price, picture source Jingdong Mall

On the other hand, TRANSSION and Samsung, the rivals of Nokia’s feature phone market, are not focused on the Chinese market.

Take Transsion as an example, most of its feature phone market is concentrated in Africa and India. According to data from Counterpoint Research in Q3 of 2020, TRANSSION feature phone shipments accounted for 22% of the local market share, making it the largest feature phone brand in India.

How big is the Chinese feature phone market? Li Liyou, chairman of Spreadtrum Communications, a wireless communication chip manufacturer, once said in an interview with the media that in the feature phone market, there are still hundreds of millions of “stubborn users” in China, mainly the elderly and K12 students. In terms of regional distribution, they are mainly concentrated in counties and towns. “This market is already big enough,” Li Liyou said.

It is these “stubborn users” that make Nokia live well with mobile phones. According to the public statement of the CEO of HMD Global, since the second half of last year, HMD has turned losses into profits.

2. After several changes of owners, Nokia’s PlayerUnknown’s Battlegrounds

Choosing the feature phone market is behind Nokia’s rather bumpy fate.

Back in 2013, Nokia is in a quagmire.

Since the continuous rise of smart phones, Nokia stuck to the closed Symbian system and had to retreat steadily. Not only did the sales of smart phones fail, but the overall sales of mobile phones, including feature phones, were declining. Nokia issued a series of profit warnings, eclipsing the former mobile phone overlord.

In 2013, Nokia met its first buyer, Microsoft.

According to internal information disclosure at the time, Nokia was no longer able to raise funds in the open market, and Microsoft gave it a preferential loan of 1.5 billion euros with conditional acquisition negotiations. In the end, Microsoft spent about $7 billion to acquire most of Nokia’s mobile phone business and its patent licenses.

With layoffs and termination of cooperation with the Google Android system, Microsoft intends to bring Nokia back to the era of smart phones, but the condition is to install the Windows Phone operating system with a market share of only about 1%. With Microsoft’s “selfishness” in mind, Nokia’s subsequent Lumia phones were unsurprisingly defeated under the envelope of iOS and Android systems.

In 2015, Microsoft’s second-quarter financial report showed that Microsoft lost US$7.6 billion, which is almost equal to the US$5 billion that Microsoft acquired from Nokia’s mobile phone business, plus the US$2.2 billion of Nokia’s mobile patent portfolio.

This is tantamount to sentence of death for Nokia’s smartphone business.

By 2016, Microsoft agreed to sell the mobile phone unit acquired from Nokia to Taiwanese technology group Foxconn for US$350 million.

Later, Foxconn and Nokia jointly established a new company, HMD, and sent employees to station. So far, the manufacturing of Nokia brand mobile phones and tablet computers has been taken over by HMD.

HMD’s play style is “conservative” a lot.

This kind of “conservatism” is reflected in the fact that when major mobile phone manufacturers aim at the smartphone market and frequently launch new products to grab the attention of consumers, Nokia’s flagship smartphones and 5G mobile phones are always late to appear, and the mass production time is repeatedly delayed. And most smart phones stay in the low-end positioning.

At the same time, Nokia has continued to reproduce the classics, returning with the appearance of a feature phone.

After HMD took over Nokia, the first mobile phone launched was a replica machine. In 2017, Nokia resurrected the classic 3310, as well as countless “snakes” that are well known to those born in the 80s and 90s. After that, the Nokia reissue 8110 was also released in February 2018. In the past 2020, Nokia also launched three replica machines.

Most of these phones maintain the original style and features, and optimize performance on this basis. This kind of feature phone with a strong retro style and nostalgic atmosphere has just met the needs of some groups, who hope to get a respite in the era of information bombing. At the same time, hundreds of millions of middle-aged and elderly people in this era still have a demand for functional machines.

HMD can no longer be “conservative”. Nokia needs to continue to attack on feature phones, but if it wants to return to the mainstream vision and become a leading mobile phone manufacturer, it must not only rely on feature phones, but also need to come up with competitive smart phone products. .

3. Can Nokia catch up with the times again?

Nokia, which sells nostalgia, has never given up its coveting the smartphone market.

In January 2017, at the launch conference of HMD’s first Nokia smartphone, Nokia 6, staged a very interesting scene: On the one hand, HMD Nokia’s CEO.....Cont @https://www.breakinglatest.news/business/why-is-nokia-which-young-people-look-down-on-is-still-alive-nokia/