Re-capturing Indian market no walk in the park for Nokia

The biggest highlight of the Mobile World Congress 2017 in Spain's Barcelona came late in the night on Sunday, with the comeback of Nokia 3310.

Published: 28th February 2017 02:25 AM  |   Last Updated: 28th February 2017 06:51 AM   |  A+A-

Express News Service

CHENNAI: THE biggest highlight of the Mobile World Congress 2017 came late in the night on Sunday — Nokia was back. Slotting its global return between April and June, brand holder HMD Global unveiled four new Nokia models — three Android smartphones and a revamped version of the 3310, a model immortalised in a thousand memes online.

But, nostalgic value and huge patent resources notwithstanding, India is not likely to be easy. “The market is a very different beast from half a decade ago,” said Navkendar Singh, Senior Research Manager, Mobile Devices Research, IDC India. Feature phones still make up the majority of devices sold, it is smartphones that are on the rise. And, Nokia’s biggest failure last time around was in the smartphone segment. However, Singh is skeptical not because of Nokia’s history, but due to the prices announced. “We cannot expect volumes based on nostalgia alone. There are several others who offer the same specifications for less money.”  

Faisal Kawoosa, principal telecom analyst at CMR Research concurred. “This is a trade-off  they will need to balance.” There are demographic challenges too. “There is no real connect with youngsters — crucial as customers and influencers both.” 

In the feature phone segment, Nokia will go up against leaders offering offline retailers profit margins close to 15 per cent. According to IDC India, 84 per cent of sales still come through offline channels. The contrast in pricing is also starker here, with market leaders’ models averaging below Rs 2,000. The 3310 is expected to retail at around Rs 3,500. Building up a distribution and support networks will also be challenging. 

But Nokia, these analysts say, has force multipliers in patents, brand recall and inherited leadership. “They might not have a walk in the park, but they can definitely leverage these factors. They know how to do this business and with smartphones expected to grow 44 per cent this year, they smell an opportunity. They just have to win back customers,” concluded Rajat Wahi, partner, KPMG India.

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