HMD Global CEO Says Committed to Invest Into New Nokia Feature Phones in Higher-Priced Segment

HMD Global, the company that makes Nokia phones, says it is committed to invest in new models and innovation owing to the company's dominant position in the higher-priced feature phone market. The company announced three feature phones globally: the Nokia 2660 Flip, the Nokia 8210 4G, and the Nokia 5710 XpressAudio alongside the Nokia T10 entry-level tablet. The company executives emphasised that despite a decline in the overall feature phone shipments, there are still various segments globally that rely on feature phones.

It is to be noted that the feature phone market registered a decline of 39 percent YoY in the first quarter of 2022 in India, as per a report by Counterpoint Research. In fact, the production of ‘Made in India' feature phones declined by 41 percent YoY in Q1 2022.

Harmeet Singhwalia, Senior Analyst at Counterpoint Research, told Gadgets 360 that the "Indian feature phone market is poised for a consistent decline in the longer term with lower-end smartphones — such as those by Jio — replacing feature phones by various brands, including those of Jio itself. In the next few months, however, we expect feature phones of brands such as iTel, Lava, HMD, Karbonn, and Micromax to do well, taking shipments of feature phones in India from an expected 16 million units in Q2 2022 to 21 million in the third quarter, a growth of 30 percent."

Keeping this as a reference, Gadgets 360 asked HMD Global their strategy of launching three feature phones in the market.

Firstly, Sanmeet Kochhar, Vice President – India & Middle-East and North Africa (MENA) replied from an India point-of-view saying that India has one of the biggest feature phone markets globally. He listed a few points that serve as a barrier to adoption of smartphones in the country. “One is the price — not just of buying the device but also the monthly expenditure on the device,” he said referring to the recent increase in the data rates.

This was one of the reasons Meta cited that limited the user growth of the company in the December 2021 quarter in India. Telecom companies Bharti Airtel, Vodafone Idea, and Reliance Jio had increased their mobile service rates in the range of 18 to 25 percent in the December quarter.

HMD Global announced Nokia 5710 XpressAudio globally
Photo Credit: HMD Global

The other reasons Kochhar cited for bringing new feature phones were a “strong battery”, built quality, occasional bricking of smartphones, need of better hardware to support latest versions of operating systems, and some users' want of ‘digital detox'. “We own this category; there is hardly any competitor, and we have very strong business in this segment, which is why we are number one in value in the feature phone space in India,” Kochhar added.

On this, Singhwalia said that feature phones are used as primary phones by a niche and an audience that is becoming increasingly smaller. "It mainly consists of the elderly who have limited exposure to technology and prefer feature phones due to ease of use or those who cannot afford smartphones. For most of these, features such as high-quality music players, built-in earphones, and stylish design are not deciding factors," he added.

"While many of those performing low-paying blue-collar jobs in bigger Indian cities will continue buying feature phones, even if in smaller numbers, the bigger market for such devices in India remains in smaller towns and rural parts of the country," Singhwalia explained.

Kochhar's comments were echoed by Florian Seiche, CEO of HMD Global, who told Gadgets 360 that the company has a dominant and unique position in this higher-priced feature phone market, and that it is committed to invest into new products, which have an iconic design as well as innovation — “like we showed today.”

He emphasised that although the feature phone “is not a growing segment”, these handsets provide “essential communication needs” to those “who basically do not want a smartphone but just want a basic essential communications tool with great quality.” HMD says that the global feature phone market is still over 200 million units.

While answering from a global point of view, Seiche told us that the three devices announced are [more] aimed at established premium markets. “People who have smartphones sometimes prefer to have [a feature phone] as an additional device. Not only that, there is even an enterprise part of that feature phone market,” he added.

“The flip phone that we announced today [could be] used at big hotel companies, rental car companies, airports, among others in the western markets. The companies [that] are giving employees feature phones don't want the employees to spend any time on social media, WhatsApp, Instagram, or browsing the internet. So these are just a few examples of the target or the segmentation that we are defining for these devices,” Seiche told Gadgets 360.

As mentioned, HMD Global also announced the Nokia T10 entry-level tablet in the India market alongside three feature phones.