We don't need the Nokia 9 yet, and HMD is smart to delay a high-end release
I realize that must come as a shock to many of you, but in fact, the vast majority of global smartphone buyers today prefer something that doesn’t equate to the annual minimum wage in Indonesia. Let that sink in for a moment - there are people out there that would need to work a whole year just to purchase a 64GB iPhone XS.
Of course, you can understand why most companies choose to focus their R&D efforts and advertising campaigns primarily on “premium”, costly handsets. There’s also OnePlus, which owes its rapid rise to fame entirely to “flagship killers.” No, the mid-range OnePlus X doesn’t count.
Meanwhile, one brand continues to swim against the tide, releasing over a dozen affordable Android devices since early last year, but no true iPhone rival yet. Is Nokia, or rather HMD Global, afraid of something? Should the company revise this unconventional release strategy? Can it actually make money without a Nokia 9 or 10 completing its otherwise robust portfolio? Well, let’s see:
Samsung’s numbers are dropping, Apple is pretty much standing still, Sony, HTC, and LG are bombing, whereas Huawei and Xiaomi continue their seemingly unstoppable race to the top. Now, I know what you’re going to say. The high-end P20 and Mate 10 definitely helped Huawei surpass Apple in global sales volume. Xiaomi is also getting more aggressive in the “premium” segment with pricey new Mi Mix-series releases.
But at their core, these are still companies catering first and foremost to bargain hunters. The only Huawei phone ranked among the ten best-selling models of May, for instance, was the P20 Lite. Not the Pro, and not the “regular” variant. The same Counterpoint Research report listed the entry-level Xiaomi Redmi 5A as the world’s fourth most popular smartphone, ahead of the iPhone 8 Plus and Galaxy S9.
Even Samsung is starting to realize low to mid-end devices are central to the company’s hopes of reversing a worrying trend. HMD was smart to understand that earlier, reviving Nokia as an accessible brand to the masses.
Why risk alienating a solid audience by shifting some of the focus away from reasonably priced, reasonably powerful phones like the 7 Plus to a Nokia 9 that may not have enough going on to stand out from the pack?
Just think about the horde of fancy new flagships already scheduled for October announcements. Even if that bonkers penta-lens Nokia 9 prototype proves legit, it wouldn’t be easy to go up against a Pixel 3 and 3 XL with presumably stellar photography software, not to mention triple camera heavyweight contenders from Huawei and LG.
Five rear-facing cameras could be overkill, and perhaps most importantly, such a crazy new shooter setup would mean HMD doesn’t plan to slot the Nokia 9 in the inexpensive flagship category, alongside the likes of the OnePlus 6T.
The brand was licensed out to a startup established by a handful of industry veterans after a disastrous Microsoft partnership and acquisition. Granted, the business was already struggling when the Redmond-based tech giant took control of it, but by the end of the two’s alliance, the Nokia name and Microsoft’s smartphone ambitions appeared similarly devastated.
HMD pulled off the impossible in less than two years, making millions of people feel comfortable buying gadgets carrying the iconic Nokia logo again. Check that, tens of millions of people. We’re talking 4.4 million smartphone shipments during the final three months of 2017, around 4 million units in Q1 2018, 4.5 million in Q2... and a great deal more if we also take feature phones into consideration.
While Nokia has barely managed to crack the top ten smartphone vendor list during the April - June 2018 timeframe, the brand is already in the global top three when it comes to “dumb” phones. That’s obviously a low-margin business, but it’s not completely irrelevant.
It’s hard to follow a flagship duo no one cared about, even after three whole years, and despite HMD playing all its cards right so far. The company chose a living, breathing OS, shining in the software support department straight off the bat, and tugging at the heartstrings of nostalgics in a truly expert way.
But it’s practically impossible to try to convince Nokia 3310 or 8110 owners to upgrade to a phone ten times as expensive. Selling an $800 or $900 Nokia 9 would be a whole different ballgame even compared to selling the 7 Plus, 6.1 Plus, or impending 7.1 and 7.1 Plus.
Besides, HMD already tested the waters with the stunning but Snapdragon 835-powered Nokia 8 Sirocco. While there are no specific sales numbers for specific models available from the company or third-party market researchers, it definitely felt like MWC 2018 audiences paid significantly more attention to the Nokia 7 Plus, and yes, even the rebooted 8110 “banana phone.”
Bottom line, it might indeed be wise to not take a chance on the Nokia 9... yet. The profit margins on that would no doubt beat those of the 7 Plus, but mass-manufacturing a high-end phone with five, four, three, or even two Zeiss cameras requires not just tons of money. A lot of time would need to be dedicated to the project, not to mention many other resources in the distribution and marketing departments.
HMD Global is still a fairly small outfit with a modest retail presence in key Western markets like the US, so perhaps it would be smart to invest time and money in that before joining the insanely competitive flagship phone arena.
There’s absolutely nothing wrong in establishing and consolidating a reputation as a maker of reliable, robust, and affordable phones first. Just ask Huawei and Xiaomi.