HMD, a startup unknown to many Finns, finally stepped into the spotlight last week.

After taking over the heavy national wealth from Nokia, HMD CEO Arto Nummela has since shouldered the important task of reviving the Nokia consumer brand. His goal is not only to put Nokia-branded smartphones back into the hands of thousands of Finnish households, but also to quickly promote the brand internationally.

The former king is about to return, but in today's saturated world of smartphones, the market is far from the Nokia era. Does the reborn Nokia still have a chance?

Feature phones will not die

Nummela didn’t start from scratch. In May this year, Microsoft announced the sale of Nokia's feature phone business, and Foxconn's subsidiaries FIH and HMD will take over the business. Although the market for functional phones is shrinking and sales are declining year by year, as long as this part of the market still exists, it can bring revenue to the company. Nummela told China Business News: "The functional machine market is still a huge business for a start-up company like us, and it can bring us experience and short-term cash flow."

Currently, there are approximately One in 10 feature phones has the Nokia name on it. However, in recent years, as Alcatel-Lucent sold its mobile phone business to TCL, Nokia has gradually sold out its feature phone market to some smaller players. In fiscal year 2015, Nokia’s feature phone shipments fell sharply by 40%. On the one hand, Nummela's mission is to reverse the decline of feature phones, and on the other hand, it is to establish the market position of smartphones as soon as possible.

HMD CEO Arto Nummela

HMD President Florian Seiche also said that functional phones are of great significance to HMD. He said: "HMD's share in the feature phone field in every market in the world is either first or second, and in some markets the share is as high as 94. This gives us a good starting point."

The Nokia brand now mainly lives in developing countries such as Asia and Africa. The main markets for entry-level feature phones are in India, Eastern Europe and Africa. Microsoft has previously invested little in these markets. Usually the price of a smartphone can be about 30 times higher than that of a feature phone, with the cheapest feature phone selling for only $20.

“Many of us thought that feature phones were dead long ago, but this is far from the truth. There are still many people using feature phones.” Ben Wood, chief analyst at CCSInsight, told China Business News: “For phones like For new mobile phone manufacturers like HMD, having a good brand will undoubtedly help them find a shortcut to growth.”

In fact, for Android mobile phone manufacturers, there is a threshold to enter this market. It is very low, but it is also difficult for companies with weak brand effects to survive. "HMD has Nokia's brand and management experience, which will be the key to their expansion." Wood told this newspaper.

Nummela told China Business News that the new Nokia smartphone will be launched in the first half of next year. The possible time is believed to be the Mobile World Congress in Barcelona in February next year. The new phone will run on Google's Android operating system. Nokia X, the first Android phone launched by Nokia before being acquired by Microsoft in 2014, was also launched in Barcelona.

Nummela’s ambition is to become a competitive player in the smartphone market. He believes that no matter which brand of mobile phone people use now, their loyalty is questioned. "Do we love our mobile phone brand, and how high is our loyalty?" He asked such a question. It is precisely based on this that he believes that the Android mobile phone market is showing huge opportunities.

HMD previously conducted a market survey to analyze what kind of people bought NokiaX and what mobile phones they used before. Through research, they found that many people who bought NokiaX were using high-end Samsung phones or Apple phones.

The results surprised Nummela and his team. "Because if you use Samsung or Apple, there is actually no reason to switch to other brands. But those people still do it." Nummela said that he also saw opportunities in this. He promised to bring mobile phones beyond imagination to these people.

Nummela joined Nokia in 1994 and is a veteran Nokia employee. Before founding HMD, his official position was Vice President of Asia, Africa and the Middle East of Microsoft Mobile Device Sales Group, and he still lives in the United Arab Emirates for a long time. Almost all HMD executives are from Nokia. It can be said that Nokia Mobile just changed its name.

But what’s interesting is that HMD’s financing does not come from Nokia. In fact, HMD is held by a private equity fund called SmartConnect. The boss of this private equity fund, Jean-Francois Baril, was also a Nokia executive responsible for managing the system supply chain. Other mid-level executives at HMD also hold shares in the company. However, in addition to collecting brand patent fees, Nokia does not have direct investment in HMD.

The significance of return

Although it has been authorized by Nokia mobile phone and tablet computer brands for ten years, HMD does not want to take all the resources into one hand with the wealth left by Nokia. Nummela also knows that in the 20 years since Nokia launched its first mobile phone in 1996, the entire mobile phone market has undergone earth-shaking changes. "We see opportunities, but we also need to weigh our own weight. We don't want to monopolize all resources, so we choose to cooperate with the best partners, which can help us move forward faster." Nummela said.

Therefore, HMD chose to cooperate with Foxconn, the world's largest mobile phone contract manufacturer, to produce mobile phones, and to cooperate with Google to develop smartphone operating systems. In addition, the company also has mobile phone service providers and sales channels to help the Nokia brand accelerate the upgrade from feature phones to smartphones in markets such as India, Indonesia and Russia.

But the challenges HMD faces are also obvious. A large number of smartphone manufacturers that have emerged from the Chinese market in recent years, including Huawei, OPPO, vivo, Xiaomi and other companies, did not exist ten years ago. Where is the competitiveness of the returning Nokia? This is the biggest question mark.

Gartner chief research analyst Lu Junkuan told China Business News: "Nokia's brand has a high affinity among consumers, but when it returns to the market after many years, it will find that the market has changed. The original market will face great challenges in terms of channel changes and product differentiation, especially in the Chinese market. Today, the strength of Chinese smartphone manufacturers is no longer the same as that of the Nokia era. "

According to HMD’s product strategy disclosed by analysts, Nokia smartphones to be launched next year will be deployed across the board. Judging from the product positioning of Nokia's mobile phones in the past, it also focused on the mass market. Lu Junkuan said that the cost-effectiveness of Nokia mobile phones has never been very high, so it is very difficult to return. Moreover, after many years of cessation of sales, many offline sales channels no longer exist, and reconstruction will be difficult. If you go online, it will be difficult to have an advantage in terms of price, so returning is of little significance.

However, he pointed out that this group of users who upgrade from feature phones to smartphones may be able to bring a certain amount of volume to Nokia. According to his estimates, the current functional phone market is about 400 million units. If Nokia can maintain more than half of its share, it will be 200 million units. "Feature phones will survive for at least 2 to 3 years in the future. This is Nokia's opportunity to build a group of users from feature phones." Lu Junkuan said, "The other visible market is the so-called 'Nokia fans' plus Nokia's There are many user groups in Europe.”

But don’t underestimate the power of this group of “Novo fans”. If the success or failure of Nokia mobile phones is based on user trust and loyalty, then "Nokia fans" will play a key marketing role.

Nokia CEO Rajeev Suri once said: "Although Nokia mainly sells equipment to enterprises today, most people still think of it as a manufacturer of consumer products. Therefore, Nokia should boldly try the field of consumer products." This is also This means that although Nokia itself does not produce mobile phones, it will still provide maximum support.

Rajeev Suri told China Business News at the Slush Entrepreneurship Conference held in Helsinki last week: "Nokia is very happy to see so many dynamic start-ups, and Nokia will also increase its investment in start-ups. , this is what we are doing.” He also expressed that he is not worried that Nokia will have no chance in today’s saturated world of smartphones. “Nokia needs to make people feel very ‘Nokia’ and make people feel that it is the ‘Nokia’ that everyone knows. . ”

As for Nokia’s product technology development and sales, he believes: “The field of digital health is a direction worth focusing on.” This may mean that health functions will distinguish Nokia smartphones from others on the market in the future. Highlights of the phone. "If you only produce mobile phones, you will not be able to meet market demand." As early as February this year at the Mobile World Congress in Barcelona, ??Rajeev Suri said that the Internet of Things is the key to the development of future technology companies. Intellectual property patent