Nokia Seller HMD Looks to Smart and Feature Phones to Grow Its African Business

HMD Global, the Finnish company that owns the rights to sell Nokia-branded phones, is targeting growth in both its smartphones and more basic models as it bids to become Africa's number-one phone brand, its vice president for sub-Saharan Africa said on Thursday.

Sub-Saharan Africa is one of the company's eight global regions with South Africa, Nigeria and Kenya representing its biggest markets, Justin Maier said in an interview. India is the phone's biggest market globally.

"Africa is still a growing market, moving consumers from the feature phone to a smartphone experience, so there are opportunities for us there as a brand," he said.

Feature phones - devices that lie between basic phones and smartphones - remain an important part of the company's strategy, Maier said.

Market share of feature phones in Africa increased from 55 percent in 2016 to 61 percent last year, while that of smartphones fell from 45 percent to 39 percent in the same period, according to the International Data Corporation.

HMD Global offers feature phones ranging in price from $18 for the entry-level Nokia 105 to $50 (roughly Rs. 3,400 crores) for the premium Nokia 3310 that was relaunched last year, Maier said.

He said the need for more price-sensitive and entry-level phones in Africa is important. In sub-Saharan Africa, HMD sells smartphones including the entry-level Nokia 1 that costs $80 (roughly Rs. 5,400) and the premium Nokia 7 Plus that costs $470 (roughly Rs. 31,900).

HMD Global has a distribution partnership model that uses distributors and mobile network operators such as Safaricom for Kenya and MTN for South Africa to sell its phones

The company hopes its use of devices that run on "pure" Android, a version of the Google-developed operating system that does not have add-ons and modifications created by phone makers for their specific gadgets, will prove popular with consumers.

HMD Global wants to be the number-one phone brand in Africa in five years, Maier said. "We see that opportunity," he said.

The company's challenge, Maier said, is ensuring that consumers know Nokia phones now run the Android operating system rather than the previous Symbian system.

According to Counterpoint Research, Nokia was the best-selling brand in low-cost feature phones globally last year and ranked 11th in smartphone sales.

In February, HMD Global reported it had sold 70 million handsets globally in 2017, its first full year of business, generating sales of $2.1 billion (roughly Rs. 14,200 crores). Maier did not disclose how many phones they sold in Africa.

HMD, set up by former Nokia executives, took over the Nokia feature phone business from Microsoft in 2016 and struck a deal with Nokia Oyj to use the brand on smartphones.

It pays Nokia Corp royalties for the brand and patents, but Nokia has no direct investment in HMD.

© Thomson Reuters 2018