Nokia’s strategy to stop Xiaomi: “that a 150 euro mobile last more than a year and a half”

Technology News

PIXEL has had the opportunity to speak with Florian Seiche, current president of Nokia about his vision of the market, the possibilities of competing against the Asian giants in the mid-range and some of his latest launches, such as the Nokia 9 , a phone with five cameras .

2018 has been a very bitter year for mobile phone manufacturers. According to IDC, 1.4 billion smartphone units were sold worldwide. They seem like a lot, but it is 4.1% less than the figure reached in 2017 and it is a fall that has been primed with well-known brands and that until recently seemed untouchable like Samsung or Apple .

Not all of them fall, however, and among those that have saved the year positively there is a European company that many gave up for dead a few years ago but that, against all odds, is managing to stand up to companies of the stature of Huawei or Xiaomi .

It is HMD, best known for being the current owner of the rights to the Nokia brand for mobile telephony. Last year, it managed to sell 17.5 million smartphones, more than double the figure achieved in 2017. In Western Europe, it is already the fourth telephony brand, still behind Samsung, Apple and Huawei, but equaled with Xiaomi.

The secret? Adjusted prices -which it achieves by manufacturing in Foxconn plants in China, like many competitors- but with a different commitment to the design of the terminals, a policy of uncommon updates in the Android market and yes, also the nostalgia and good memories that they are associated with a brand that became synonymous with mobile telephony during the first decade of the century.

I would like to start by knowing what your balance is for 2018 because it has been a tough year, in general, for mobile telephony.
Yes, it has been a very difficult year for smartphones in general. And it has been around the world because what we have begun to see is that users no longer renew their phones so much, especially in the high-end range.
Not for you …
Curiously, this trend has given us the opportunity to grow because we focus a lot on the mid-range, which is still a healthy segment in many countries.
In general HMD had a very good year, it is true, but not in Europe during the fourth quarter. And this is something that we have also seen in the rest of the brands and in other territories. What explanation is there?
I would say a good part of that problem comes from the fight within Android manufacturers to get market share, a phenomenon that has led to a very aggressive price war that has taken its toll on the accounts.
And how is Nokia going to compete here? None of the Chinese companies that are saturating the mobile market at a very low price, such as Xiaomi, Oneplus or Huawei, seems to be willing to change their strategy.
We have options. The first, obviously, is that we have renewed our catalog at the Mobile World Congress with a more competitive offer. But also, and more importantly, is that we have a very clear differentiation in our update policy.
Do consumers really care that much?
Yes consumers notice. We are checking it with many of our clients. They know they spend 150 euros today but they get a phone that still feels new a year and a half later thanks to the updates. We offer monthly security updates for three years and two generations of Android guaranteed in each terminal that we sell with we update for the entire catalog between six and eight months after a new version of the operating system is announced. That is not usually the policy of our competitors’ cell phones.
How complicated is it to get that?
It is a considerable investment and effort but it is our best strength and differentiation because we have decided from the beginning to have a pure Android experience. It would be much more complicated if we had our own layer of software on Android, as others do.
And this is what defines Nokia today.
Not the only thing but I do think it is the main thing. On the one hand we have the Nokia brand itself and the design of our terminals, which is really different from what is seen in the rest of the market, but without a doubt what differentiates us is that we consider it very important that our users are updated to the latest Android version because today is where most of the innovation and user experience resides. Why shouldn’t they benefit from this?
But it is something that sooner or later your competition can also do, right?
Maybe yes, what we are clear about is that today we see this updating capacity as important for our users. And even more so in the business world, for example, where security is key.
Speaking of the enterprise market, do you think the tension between the US and Asian manufacturers opens an opportunity for Nokia in this market segment?
Yes, certainly. We are in a privileged position as a western brand to be chosen by both companies and operators and we have begun to notice a greater concern regarding these issues.
Well, to all these, where is the 5g and foldable phone from Nokia? Everybody seems to have one this year
I think that this year with the Nokia 9 we cannot be dismissed as not very innovative. We have reached an agreement with Qualcomm to work on 5G and we have very close to the other branch of Nokia, who are specialists in this subject but we believe that it is still too early to launch a phone with this technology.
Speaking of the Nokia 9, I think that people’s first impression upon seeing the phone is that it has too many cameras …
Yes, but unlike other phones with many cameras, ours are really useful. Every time a photo is taken with it, all 5 are used and that allows us to collect a lot of information in each shot and thanks to that information do things that would be impossible with a conventional camera.
Who asked for it?
I think the target audience for this phone is very clear. He’s the avid photography user who has as much fun taking a photo as he does editing it.
Do you consider this an experiment or a snack of what we will see soon on all types of mobiles?
It has been a considerable investment in R&D but also the fruit of agreements with companies such as Qualcomm, Zeiss and Google itself. With Google we have played an important role in the development and integration of depth maps for photos. And all these agreements and collaborations are going to be noticed in future developments, even if the technology to capture the images is not exactly the same.

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