HMD Global, Nokia’s parent company, has revealed that it has pulled out of the flagship race as it was stretching itself too thin with limited resources. “Making an $800 (around Kshs 90,000) phone doesn’t make sense for us at the moment,” Adam Ferguson, HMD’s Global Head of Product Marketing, told Android Authority in an interview.
Rather than launching phones in all price brackets similar to what Samsung and other major brands are doing, HMD Global will instead focus on releasing phones that lie in the entry-level to middle-range segment, staying clear of high-end smartphones that have eye-watering price tags.
The Nokia 9 PureView, which was launched back in 2019 with the aim of reintroducing Nokia’s name to the premium camera market that it once dominated received a lukewarm reception. The reception being neutral, at best, and HMD Global not having the financial muscle to risk a sequel that would hopefully right the wrongs of the Nokia 9 PureView ensured that it was the last flagship from the Finnish company to date.
The focus for HMD Global has now shifted from covering all price points to just budget smartphones as well as the occasional feature phone. The company wants the Nokia brand to be now associated with the release of solid phones that do not break the bank, last several years of use, and have multi-day battery life.
This strategy has already started paying off, as we recently reported that the company celebrated its first full year of operational profit at the end of 2021. The profits that HMD Global has seen even stretch back than 2021, as they have been operating in the green from Q3 2020 with Q4 2021 seeing their highest recorded profit in a quarter.
HMD Global plans for this year include being the market leader for prepaid smartphones in the USA before the turn of 2023. We will have to wait till the close of the year to see whether they achieve this, but affordable pricing will not hurt their chances.
Big brands of the past such as HTC, LG, and Sony have tried over the years to revolutionize their names in the Android scene with varying degrees of success. HTC occasionally releases a phone, while LG gave up making phones. It undoubtedly is a rough road to take, but tackling it from one segment before moving to the high-end market might be a better route for Nokia to take.
The company also faces the task of rebuilding consumers’ belief in their product line-up. The Nokia name is iconic, and most people will buy their devices purely for the nostalgia factor.
However, at high-end prices, the company will be up against powerhouses in Samsung and iPhone, which have equally big names. This makes tackling the entry-level and middle-range brackets more appealing, as they will be competing against brands that are relatively new in the market and do not carry the same weight as the Nokia name.
Whether this translates to success and the return of the Nokia name in Android conversations is a question for another day. But what is clear is that HMD Global has a plan that is already in motion and so far proving profitable for them.
