Text/Wang Gufeng Zhongwei
Editor/Huang Yiting
On June 11, the long-dormant Nokia mobile phone has new developments: Nokia’s exclusive brand licensee HMD has released a new phone called Nokia C20 Plus.
The launch price of 699 yuan shows its low-end market positioning. This is a low-end Nokia smartphone released by HMD again after half a year.
In terms of performance configuration, whether it is the chip, camera or screen, the new machine performs mediocrely and has no outstanding advantages over competing products of the same level from brands such as Honor and Xiaomi.
From being the world’s all-powerful mobile phone brand hegemon to missing out on the era of intelligence and declining, Nokia’s experience has made countless people sigh.
However, the smartphone market is difficult to open, and Nokia has gained a firm foothold in the feature phone market favored by the elderly. This is also the secret of Nokia’s survival to this day.
Counterpoint Research data shows that in Q1 2021, Nokia shipped 11 million feature phones and only 2 million smartphones. The latter was less than 1/5 of the former.
According to Finnish media mobiili, in 2020, four years after taking over the Nokia brand, HMD's financial situation finally improved, from a loss of 295 million euros in 2019 to a loss of 47 million euros in 2020. The CEO of HMD Global said, “We have been profitable since June 2020.”
Feature phones hold up most of Nokia’s mobile phones. In the global feature phone market, Nokia still occupies a large share of the market. Less share. Counterpoint Research's 2020 Q3 data shows that in Europe and Asia, Nokia ranks first in the feature phone market with 40 and 21 shares respectively.
However, compared with the smartphone market, the market size of feature phones is only a minority. In the third quarter of 2020, according to data from Counterpoint and IDC, global feature phone shipments were 74 million units, only 21% of smartphones.
So, while holding on to the feature phone market with limited space, and continuing to survive in the fiercely competitive smartphone market, what is the future of Nokia mobile phones? Can it keep up with the times again?
At today’s Nokia C20 Plus conference, which lasted for nearly 30 minutes, the configuration of Nokia’s new mobile phone was exposed one after another. Its processor uses Unisoc, is equipped with a 4950 mAh battery and uses The 6.52-inch LCD screen material is standard for low-end mobile phones.
As a low-end mobile phone with an initial price of 699 yuan, its price/performance ratio does not have much advantage. Referring to peers, many low-end and mid-range competing products are better than Nokia C20 Plus in performance, but at lower prices as their products are updated and iterated.
For example, VIVO Z3 is a mid-range mobile phone released in October 2018. It is equipped with a Snapdragon 710 processor and a rear 16 million and 2 million pixels. Now the price on JD.com has dropped. to 678 yuan. Regardless of camera, processor or screen, VIVO Z3 performs better than Nokia C20 Plus.
However, low-end smartphones are no longer the backbone of Nokia mobile phones, feature phones are.
In the global feature phone market, Nokia mobile phones occupy an important market share.
Strategy Analytics survey data shows that global feature phone shipments in 2020 are nearly 420 million, among which the top three mobile phone brands have market shares of 24.9, Transsion, 14.5, and Nokia, 6.3.
Nokia’s performance in China’s feature phone market is also quite impressive.
In 2020, Nokia released low-end feature phones including Nokia 220 in April 2020, Nokia 225 in October 2020, and Nokia 6300 in December 2020.
With these mobile phones, Nokia stated at the end of 2020 that its "classic 4G mobile phones" (feature phones) in the Chinese market had reached the number one sales position.
Taking JD.com as an example, some Nokia feature phones have accumulated tens of thousands or even hundreds of thousands of user reviews. Among them, Nokia 220, a model released by Nokia mobile phones in April 2020, has accumulated more than 100,000 reviews. This cumulative number of reviews has exceeded most OnePlus phones and all Meizu phones.
The strong performance of Nokia mobile phones in the Chinese market is mainly due to Nokia's "lack" of competitors in the Chinese feature phone market.
Domestic mainstream mobile phone brands, such as Huawei, Xiaomi, OPPO, VIVO, etc., have already turned their attention to the competition of mid-to-high-end smartphones. Even if they deploy low-end smartphones, the prices are generally around 500 yuan. above.
In contrast, the price of feature phones is concentrated in the range of 0-500 yuan, which makes Nokia miss the competition with domestic mainstream mobile phones.
On the other hand, Nokia’s rivals in the feature phone market, Transsion and Samsung, do not focus on the Chinese market.
Taking Transsion as an example, most of its feature phone markets are concentrated in Africa and India. Counterpoint Research’s Q3 2020 data shows that Transsion’s feature phone shipments accounted for 22% of the local market share, making it the largest feature phone brand in India.
How big is the feature phone market in China? Li Liyou, chairman of wireless communication chip manufacturer Spreadtrum Communications, once said in an interview with the media that in the feature phone market, there are still hundreds of millions of "stubborn users" in China. They are mainly the elderly and K12 student groups. In terms of regional distribution, they are mainly concentrated in counties and towns. “This market is already big enough,” Li Liyou said.
It is these "die-hard users" that allow Nokia to survive well with mobile phones. According to public statements by the CEO of HMD Global, HMD has turned a profit since the second half of last year.
Behind the choice of the feature phone market is Nokia’s rather bumpy fate.
Back in 2013, Nokia was in deep trouble.
Since the rise of smartphones, Nokia has stuck to its closed Symbian system and has been forced to retreat. Not only are the sales of smartphones showing no improvement, but the overall sales of mobile phones, including feature phones, are declining. Nokia has issued a series of profit warnings, eclipsing its former mobile phone dominance.
In 2013, Nokia met its first buyer, Microsoft.
According to internal information disclosure at the time, Nokia was no longer able to raise funds in the public market, and Microsoft gave it a loan discount of 1.5 billion euros, along with conditional acquisition negotiations. In the end, Microsoft spent about $7 billion to acquire most of Nokia's mobile phone business and its patent licenses.
By engaging in layoffs and terminating cooperation with Google’s Android system, Microsoft intends to bring Nokia back to the era of smartphones, but only if it installs the Windows Phone operating system, which has a market share of only about 1.
With Microsoft's "selfishness" in mind, Nokia's subsequent Lumia phones failed miserably under the shadow of iOS and Android systems.
In 2015, Microsoft’s second quarter financial report showed that Microsoft lost US$7.6 billion, which is almost equal to the US$5 billion Microsoft acquired Nokia’s mobile phone business, plus the US$2.2 billion in Nokia’s mobile patent portfolio combined. .
This is tantamount to a death sentence for Nokia’s smartphone business.
By 2016, Microsoft agreed to sell the mobile phone division acquired from Nokia to Taiwanese technology group Foxconn for US$350 million.
Later, Foxconn and Nokia jointly established a new company, HMD, and sent employees there. At this point, the manufacturing of Nokia brand mobile phones and tablets was taken over by HMD.
HMD’s play style is much more “conservative”.
This "conservatism" is reflected in the fact that when major mobile phone manufacturers aim at the smartphone market and frequently launch new products to seize consumers' attention, Nokia's smart flagship phones and 5G mobile phones are always delayed in debuting. Mass production time has been repeatedly pushed back, and most smartphones are still positioned at the low end.
At the same time, Nokia continues to reproduce its past classics and return as a feature phone.
After HMD took over Nokia, the first mobile phone it launched was a replica. In 2017, Nokia resurrected the classic 3310, as well as the "Snake" known to countless people born in the 80s and 90s. Later, the Nokia 8110 replica was also released in February 2018. In the past 2020, Nokia also launched three replica phones.
Most of these mobile phones maintain the style and features of the original versions, and optimize their performance on this basis. This feature phone with a strong retro style and nostalgic atmosphere just meets the needs of some groups, who hope to find respite in the era of information bombardment. At the same time, hundreds of millions of middle-aged and elderly people in this era still have demand for functional phones.
The result was beyond people’s expectations. HMD made the right bet on the feature phone market. According to Counterpoint data, starting from the fourth quarter of 2017, the growth rate of global smartphone shipments has turned from rising to falling. The opposite is true for feature phones. In 2017, global feature phone shipments reached 450 million units, a year-on-year increase of 5%.
Until now, in Japan, the Middle East, Africa, India and other countries or regions, feature phones still have a very large market. For example, Africa's smartphone penetration rate and Internet penetration rate are low, while developed countries like Japan do not have infrastructure deficiencies, but have serious aging problems. For them, feature phones are an urgent need.
As a result, Nokia has the potential to come back to life. According to financial data released by HMD, Nokia's global shipments reached 80 million units in 2018, an increase of 10 million units compared with 2017, after a decline in 2017.
However, maybe it is due to the impact of the epidemic, or maybe the feature phone market is occupied by other players. According to Counterpoint Research data, Nokia's global shipments fell again in 2019 to 70 million units, and fell sharply to 46.6 million units in 2020.
At present, many giants and mobile phone manufacturers are also seizing this market. The Indian brand Jio phone is constantly launching new products combining feature phones and smartphones. The American technology company Google, the French operator Orange SA, etc. are also We are laying out this market through investment and other means.
Although HMD has maintained a certain momentum through feature phones and has become a leader in the market, as more and more companies realize the huge market behind feature phones, HMD and Nokia are waiting for features While the machine is recovering, it may also encounter more challenges.
HMD can no longer be "conservative". Nokia needs to continue to attack on feature phones, but if it wants to return to the mainstream and join the leading mobile phone manufacturer industry, it cannot just rely on feature phones, but also needs to come up with Competitive smartphone products.
Nokia, which sells nostalgia, has never given up on coveting the smartphone market.
In January 2017, at the press conference of HMD’s first Nokia smartphone Nokia 6, there was an interesting scene: On one side was the emotional card played by the CEO of HMD Nokia: “When I was very young, I Just know Nokia." On the other side, the product team still made bold statements: "We are not old people, and we will climb to the top of the world in three to five years."
Although the slogan is loud, HMD is moving towards smart phones. The pace is still conservative.
For its first smartphone, HMD chose to enter the mid-to-low-end market priced at 1,500-2,000 yuan. At the same time, due to the weak offline channel foundation in the past, HMD was unable to withstand the financial pressure of large-scale channel resets. Therefore, when entering the Chinese market, it chose to cooperate with JD.com for online omni-channel sales.
To this day, Nokia still does not have an offline store in China, and there is almost no news about new developments in offline channels.
Judging from the pace of Nokia’s new phone releases in recent years, it only releases 2-3 smart phones every year, usually one in the spring and another in the winter. Compared with the pace of 10 new phone launches per year by Xiaomi, OPPO, VIVO and other brands, Nokia's pace appears much slower.
In April this year, Nokia Mobile released a set of pictures on Weibo. Nokia stated that it would re-divide its product series into three series of smartphones: X, G, and C. Each series covers 9 models. type.
Among them, the C series is a low-end machine, focusing on the 3G and 4G market of less than 1,000 yuan; the G series is positioned in the mid-range market of 1,000-2,000 yuan, retaining large batteries and high pixels; the X series is priced at 5,000 yuan The following are Nokia's most high-end product series.
After checking with Insight, we found that Nokia’s X20 model, which currently has the highest configuration, uses the Snapdragon 480 processor and is equipped with a 48-megapixel lens and a 5-megapixel ultra-wide-angle lens. This configuration is basically at the Domestic mid-range machine level.
Positioned at the mid- to low-end and slow to release new phones, Nokia has difficulty breaking through in a mobile phone market filled with giants.
According to data released by Counterpoint Research in Q1 2021, Nokia’s smartphone shipments were 2 million units, less than 1% of the global smartphone shipments of 354 million units. Compared with the sales volume of more than 35 million units by Samsung, Xiaomi, OPPO and other manufacturers, Nokia's size is far behind.
However, Nokia's efforts in the communications field have given certain support to the mobile phone business.
Patents are the "legacy" left to the mobile phone business by the Nokia empire. Whether in the 3G or 4G fields, Nokia's communications business has a relatively deep technological accumulation. It has 16,000 projects in the United States and nearly 20,000 projects in Europe.
With a large number of patents in hand, Nokia has eliminated many competitors in its mobile phone business and also brought itself rich patent income.
In 2013, Nokia and HTC had a patent dispute. Nokia sued HTC for infringement of more than 50 patents on "terminals, methods and computer programs for interacting with signal tags". The lawsuit was settled in 2014, and HTC had to pay huge amounts of patent fees, which greatly damaged its vitality.
Since then, Apple, BlackBerry and other mobile phone companies have had patent disputes with Nokia, and all ended in failure.
In aspects such as navigation systems and communications, it is difficult for mobile phone manufacturers to avoid Nokia patents and have to pay compensation.
Although the details of the fees paid by Nokia and major companies for technology patents have not been announced, according to its 2020 financial report, the technology business revenue accounted for 6.4%, reaching 11.19 billion yuan, which may be used as patents. One of the evidences of income.
In the 5G business, Nokia’s strength cannot be underestimated.
Since 2013, Nokia has spent tens of billions of euros to acquire Nokia Siemens Networks and telecommunications equipment manufacturer Alcatel-Lucent held by Siemens. It has also invested in various EU projects early on. In large-scale 5G projects, we are trying to get a share of the 5G market.
By 2021, the "Who is leading the 5G patent race?" report released by the German consulting agency IPlystics shows that Huawei ranks first with a 5G standard essential patent share of 15.4, while Nokia ranks first with a market share of 13.2. Ranked third in terms of share.
5G patents have once again become Nokia’s key point. According to the patent fee charging standards announced by Nokia in 2018, it charges a fixed 5G patent fee of US$3.43 per mobile phone, compared with Ericsson's patent fee of US$5 per high-end mobile phone and US$2.5 per low-end mobile phone. Qualcomm takes a commission of 5% of the patent fee from the selling price of each mobile phone, and the price is quite competitive.
Several 5G mobile phones released by Nokia are also equipped with its own communication patents. Although the specific cooperation price has not been announced, it is not difficult to infer that Nokia mobile phones will enjoy many technical preferential conditions.
Not long ago, Nokia also started research on 6G technology with Japan, vowing to win 10% of the patent market, which may pave the way for Nokia mobile phones in the 6G era.
At present, Nokia mobile phones are not only still alive, but also have a group of "backers". In August 2020, HMD announced that it had received a new round of financing totaling US$230 million. In addition to Nokia, investors also include partners such as Google and Qualcomm. With the latter's technical support in operating systems, chips, etc., it will be more conducive to improving the performance and experience of HMD smartphones.
However, competition in the mobile phone market remains strong. The competition among Huawei, Apple, Samsung, Xiaomi and other manufacturers has already become fierce. If HMD wants to break out, it needs more than just helpers. Its brand, market and R&D strength need to be greatly improved.
In the past few years, Nokia has been able to stay in a corner by relying on the legacy of the old era-feature phones. But the smartphone market is destined to be dominated by young people. This market is already a red ocean. Every step forward requires determination and courage. But if it wants to keep up with the times again, this is what Nokia has to do.