ARTHUR GOLDSTUCK: Nokia fights back after technical knockout

Basic brand got smart and now ranks top in Africa for sales and volume

10 February 2019 - 00:06 By ARTHUR GOLDSTUCK

While the world wasn't watch-ing, a vener-able old brand has made a comeback.
There was a time when Nokia defined the cellphone market, but it collapsed when it failed to follow the rapid move from basic phones to smartphones sparked by the iPhone from 2007 onwards. A disastrous acquisition by Microsoft ended with some $7bn being written off by the software maker, and the rights being offloaded at fire sale prices.
The new custodian of the brand, HMD Global, has quietly gone about the task of rebuilding Nokia's range as well as its brand promise, one model at a time.
Few paid attention until the third quarter of last year, when HMD reported 71% growth in Nokia smartphone sales over the same period the previous year. As a result, it re-entered the top 10 of global smartphone makers, just behind LG. More significant, it was ranked the No 1 phone brand in Africa - counting basic phones and smartphones - in sales value and volume.
Part of the secret of this startling success is that Nokia never really went away - at least as a basic mobile phone brand. While it was rolling out a refined smartphone range over the past two years, it maintained the production of entry-level phones that dominated the low end of the market.
The wildly successful Nokia 105, first launched six years ago as the cheapest phone on the market that incorporated FM radio and a clock, while also being dust- and splash-proof, was redesigned by HMD in 2017 with a colour screen.
That existing foundation has been key to Nokia's revival, said Shaun Durandt, general manager of Nokia in Southern Africa.
"There are two prime considerations, and the Nokia brand is the most important in terms of leverage in SA," he said. "We have a legacy built over 25 years of a strong relationship with channel partners, the mobile operators and the formal retailers.
"The second factor is value for money. The biggest priority was not to compromise on quality and execution of product. As a result, adoption is good. It took a while to break into the smartphone entry level, with the Nokia 1, but we hit the sweet spot in the sub-R1,000 segment."
Nokia also made a smart bet on the mid-tier market, with the Nokia 2.1 offering a large 5.5-inch screen, yet two-day battery life, for less than R2,000.
"It's had a run like you can't believe," Durandt said. "The success of the 2.1 has helped us build from the bottom up. For us, that mid-range segment is critically important, to have success there, and the break-out into the high end as confidence in the brand is built."
The range runs up to the Nokia 8.1, which sells for less than half the price of most other flagship phones, albeit decked out with fewer smart features.
At the annual Mobile World Congress in Barcelona later this month, HMD CEO Florian Seiche is expected to announce a new flagship phone, rumoured to be the Nokia 9.
Nokia may well be preparing to take the battle back to the brands that all but wiped it out.
• Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter and Instagram on @art2gee..

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