Nokia introduced a budget smartphone with lucrative bundle offer from Airtel last month. At the launching event at Sonargaon Hotel executives from Robi, Airtel and HMD Global announced the new Nokia 2 to the press.
HMD Global’s regional general manager for Thailand and Emerging Asia Sandeep Gupta was present at the event. HMD Global is a Finish company that holds an exclusive license for manufacturing all Nokia phones, even though the company name is not generally used in branding and promotion for the phones.
We caught up with Sandeep Gupta right after the main event. As all the members of the press and officials from the companies were grabbing exquisite dinner, we got hold of Mr Gupta and he happily agreed to have a quick chat. We started by asking him about the pressing queries from some of the journalists who questioned the wisdom of using only one GB RAM in the phone that was announced.
iPhones don’t have a lot of RAM, but those run fast. People are certainly taken aback by the spec issue, the new released phone having one GB RAM. This is probably expected of lay customers. But did you anticipate this question?
SG: I think you answered the question yourself. At the end of the day it’s not about the RAM. It’s about the experience. If you try the phone you will understand that RAM is not an issue, because the consumer will be able to use and access all the apps that they need to. And the experience is fast; it’s seamless. And it has gone through the trial process, obviously. Like Mahtab bhai (CEO and Managing Director, Robi) said, in response to the last question (during the session), Nokia phones are always well tested before they are brought into the market. They go through months of testing. So, I expected the question, but I think the answer is in the device and the experience on the device.
The iconic brands have their own looks. Apple has a certain look, Samsung has a certain look, as you know of course. Is Nokia trying to figure out what it wants to look like, appearance wise?
I think all the devices may not have exactly the same looks. But we do want to have a design philosophy and a design language to our phone. And I think the design language is kind of summarized in two or three words, which is a very solid build quality. The phones are made solid from single blocks of aluminum. The craftsmanship is immaculate. These phones spend almost an hour on the line. A lot of other phones would be on the line for 15 or 20 minutes. The amount of time that is spent on polishing, anodizing the phones, the materials that we choose – that’s the design language. We want to be superior in build quality, [by having] very elegant design, good craftsmanship. At the end of the day the consumer should feel proud of carrying these phones.
You have clearly segmented your products from ‘budget’ to ‘flagship’, like all brands do now. You also have the nostalgia factor. So, which of these do you think will take up the most momentum in the market?
I think the first thing that we have to understand is that Nokia philosophy is technology for all. We are not catering to one specific target group. And that is why our attempt is to bring better and better design and technology to lower and lower price points. So, we want to offer the same type of design feel and look at a hundred dollars or a hundred and fifty dollars phone as in a high-end phone. Of course, there will be differences, but we cater to everybody.
That’s one part of the answer. The second thing is, feature phones are very important to us. I believe almost one and a half to two billion people in the world are still using feature phones. In fact, over the last couple of years the feature phone market has been increasing, either as people who did not have access to mobile phones are now having access to mobile phones, or people who are using two phones; some people are using a smartphone and a mobile phone. So, whatever the application or use for the feature phone is, the feature phone market globally has been increasing. Nokia’s presence in that segment has been extremely strong over the years and we continue to maintain that. And lastly I think you mentioned the Nokia iconic phones from the past, I think these are more of emotional decisions than logical ones. Our consumers are asking us, like I mentioned in my presentation that the iconic 3310, we are not able to supply enough, ever. Because, no matter how much we supply people just buy them. So, it’s a little bit of emotional sort of purchase from consumers. And we expected that to happen and to continue.
So, we will focus on all areas of business, whether it’s feature phones, bringing back iconic Nokia phones and of course, the smartphone business, which is very strategic to our business.
There has been actually a growing trend of people wanting to own a stripped down device just for making phone calls, so they don’t have to worry about battery life and other things. As a company have you viewed this as a real need in the market?
It is a real need. In fact, in a lot of developed countries the concept of a second phone is becoming extremely popular. And there are a lot of people in research, in practice have expressed that over a weekend or in the evening they don’t want a smartphone and be handling 20 apps or their emails. They just want a phone that they can take phone calls on from family members and there is clearly room for a second phone now. And the second phone is very often a feature phone, which you can use to just text or call. So, that’s not my opinion. Globally, the numbers are telling us that a lot of people in parts of the world are now using a second phone.
All companies are focusing on budget solutions. These phones are at the same time feature heavy. Where will be the competition in the future?
If you look at the market here in Bangladesh, I think that the price point that are most comparative are, let’s say about 50 or 60 dollars up to about 150 or 175 dollars. That is more than one third of the market, if my memory serves me right. I think it’s almost half the smartphone market. I think this is where the competition is intense and will continue to be intense. And I believe that Nokia has the products and a portfolio that today and in future will be able to compete in that segment. That is the most important segment.
Having said that, there are enough people in Bangladesh who can afford phone in the higher price banks. And we are selling Nokia 5 and 6 at price points higher than that. And the response has been extremely good. So, like I said, Nokia is for all. We are bringing high end designs and specs to affordable smartphones. And that will continue to be our effort in the future.
One of the obvious selling point for this launch is that it is 4G enabled. We know 4G is likely to get permission soon, but it hasn’t happened yet. Weren’t you a little concerned about that? That’s a good question. I will not speculate what the government’s plan is. Mahtab bhai in answering a question earlier said very clearly that from their side Robi and Airtel is fully ready. They are technically ready, and their infrastructure is ready to launch 4G. Now, obviously the government has a road map. And they will communicate that and execute that.
As far as Nokia 2 is concerned, if you saw in my presentation, the key selling point, why a consumer will choose Nokia 2 is not really 4G. 4G is good, but the key selling point is design, the quality of the phone, the battery life of the phone and the other features like the display quality and the hardware. In addition, the pure Android feature that comes with a pure secure and up to date Android Nougat version. So, I think that stays. As far as service is concerned, the operator has good 3G service at this point of time, which makes the phone work beyond just the acceptable level. And the 4G is something that we will wait for. It’s the icing on the cake. But we still have a phone that will satisfy our consumers.
There is a lot of competition in the Android market. What makes Nokia different at this point?
I think it’s the same values of Nokia that has made Nokia different over the last 20 years which will make us different again. Obviously the phones that Nokia sold 10 years ago may not be relevant now. What we are introducing now is relevant in the modern context. People want better hardware, better cameras, better displays and Nokia brings all of that. But the difference is that Nokia will maintain it’s true values of the ability to bring breakthrough designs, ability to have a solid build quality, durable phones, battery life etc. You remember the Nokia 3310 has a standby time of 27 days. People think it’s a joke but it is not.
So, I think the core values of Nokia will remain the same, but the products will be brought into the market in a modern version in the way that market expects it now.
If I’m not mistaken I think you currently have a three-year contract for making Nokia phones, is that correct?
And have you planned your market strategy according to that contract? We have a long-term contract. We are the exclusive licensee for Nokia phones globally for the long-term. I think the contract by itself is not that overriding a factor. What is important, however, is that we are an ambitious company and we want to be among the top two or three players in the smartphone business within the next few years. So, that is something that drives our strategies, our product portfolio, our decision on what segments to enter, what to offer in the future etc. I think our goal of being among the top two/three players in smartphones over the next few years, that’s the overriding factor that drives our decision making.
Final question, what in your mind ultimately wins the consumer over? And where does brand loyalty come into that?
That’s a difficult question. I think two or three things are very important. In our case, the Nokia brand. In a country like Bangladesh we have a lot of fans in consumers who just love our brand. Even before we started any major TV campaign or advertisement, there were a lot of consumers who were buying Nokia 3s and Nokia 5s. So, that’s a big differentiator.
Other than that I think what a manufacturer can offer different from the competitions. And I believe we have several things to offer, in terms of our design language, in terms of our price points and the products that we offer, the materials that we use, the durability of our phones. I think that eventually will make the difference, because Bangladeshi consumers are not only smart, but also value conscious. They will not invest in a phone unless they are sure that it meets their expectations. I think Nokia phones do. ■