Current owner of Finnish handset brand eyes market re-entry next year
Nokia will make a comeback next year with a plan to launch new smartphones.
But whether the gadgets will rekindle interest among Chinese consumers for the Finnish brand remains to be seen, said analysts.
They pointed out that brand reputation alone cannot help Nokia regain lost glory or market share as China represents the world's most competitive smartphone market.
HMD Global, which now owns the handset brand, announced on Thursday it is planning to reintroduce Nokia in the market in the first half of 2017. On the anvil are new smartphones that will run on Google's Android operating system.
"We believe that the time is right for renewal in the mobile industry. The market is fatigued and flooded with undifferentiated products. Consumers are looking for a technology with a clear purpose, something that is useful, exciting, branded and trustworthy. So, our approach will focus on true, core user experiences and a dedication to quality," said Florian Seiche, president of the Finland-based HMD Global.
"With our passionate team, startup attitude, a brand with a 95 percent worldwide awareness and a unique, asset-light partnership approach, we believe we are perfectly placed to forge a new way in mobile," he said in a statement.
The company, which has secured exclusive rights to use the brand for smartphones from Nokia Oyj for the coming 10 years, hopes that consumers will remember the qualities that made the company the leading handset maker of the late 1990s and early 2000s.
According to a report in the QDaily on Friday, Nokia's first comeback smartphone will target the mid-to-low end. The new Nokia smartphones will target global consumers initially. But China, the world's largest smartphone market, is a priority for HMD Global.
According to a company source, who wanted to remain anonymous, consumers in China will be among the first in the world who will be able to buy the new phones.
However, Xiang Ligang, independent analyst and CEO of the telecom industry website cctime.com, said Nokia handsets' future in China appears rather bleak.
"In terms of producing mid-to-low end smartphones, Nokia won't be able to beat China's homegrown brands," he said.
"Many of Chinese brands, such as Huawei and Xiaomi, have really big shipment volumes. The more they produce, the more they will be able to reduce the cost."
According to Xiang, Nokia does have a very recognizable brand, but so do Motorola, Sony and LG. "In the highly competitive smartphone industry, you need to have a really cutting-edge technology to come back and stand out. The reputation of the brand is not enough," he said.
James Yan, research director at Counterpoint Technology Market Research, said brand equity may give Nokia a foothold in the market initially, nothing more. "That won't necessarily translate into good business. The most important thing for Nokia is to build a strong sales network. The magic will only happen when its sales channels have strong confidence in the brand," he said.
