HMD dumps Nokia. Uncertain future for the iconic brand (Opinion)
HMD dumps Nokia is perhaps the worst-kept secret in 2024. Analysts have long predicted it was a matter of when, not if. HMD attempted to shore up failing sales with its new HMD-branded phones, even a Barbie flip.
Now, no one wishes more that Nokia had survived. As a long-time user of its first Symbian and then Windows Lumia smartphones, then seeing it destroyed by poor decisions under Microsoft’s inept management and rising from the ashes again in 2016 under HMD, this Finnish brand deserved to survive.
But a brand is all it was. Nokia is a brand that HMD licensed to hopefully cash in on its street cred and loyal users. Nokia’s innovation died long ago, just like Blackberry, a brand looking for a problem to solve. The HMD license to use Nokia expired in 2024 anyway (not 2026, as claimed by some). It comes as no surprise that HMD has cut it adrift.
What is HMD (Human Mobile Devices)?
Essentially, it is a group of former Nokia employees based in Espoo, Finland. It is owned 10.1% by Nokia Networks, 14.38% by FIH Mobile (essentially Taiwan’s Foxconn assembly), and Google and Qualcomm (minor shareholding not disclosed).
Ironically, as a segue, Nokia Networks (license holder) acquired Alcatel smartphones in 2016, licencing it to TCL until 2024. That brand barely exists in the low-end segment.
Why the big fail?
Every time I reviewed a Nokia device, I wished the brand good luck. But I commented that its tech was as if it had been designed a few years ago and released when it could. Nokia used old tech, old components, and outsourced manufacturing, meaning it lacked any economy of scale, and its handset prices were way off market pricing.
HMD also used old marketing approaches that gave it no hope of competing with the behemoths. Samsung, OPPO, Motorola, Google, and the global brands we don’t see here had marketing budgets bigger than Nokia’s worth. In 2009, Nokia was the fifth most valuable global brand, but it slid to 98th by 2014 (Source Interbrand).
That poor marketing centred around the evangelistic ‘pure, secure and up to date’ referring to its use of pure Android versus the heavy overlays of Samsung UI, OPPO ColorOS, and Motorola Hello UI. Only Google Pixel now has pure Android, which is barely mentioned in its marketing.
And HMD misjudged the value of a picked-over brand, which had little trust and no real nostalgia by then unless you were Finnish.
Nokia made poor decisions all around when, in 2010, it had the world at its feet and could have seen Windows Phone as the only viable alternative to Apple iOS.
Google even says it may not have developed Android if Nokia’s Symbian and Windows Mobile had become the standard—as they should have been.
What is next for Nokia?
Remember that it is nothing more than a brand, and its licenses and IP belong to the Finnish parent. Nokia Networks is not stupid enough to try to flog this dead horse.
There are two outcomes. One for HMD and one for the Nokia brand. We predict that:
HMD may die a slow and agonising death, realising that you cannot survive, let alone innovate, making about 30-40 million dumb and smartphones. According to Counterpoint, it has less than 1% global smartphone market share. However, Foxconn is now making HMD phones in India, which may give them a home turf advantage.
The Nokia brand will likely be licensed on bargain terms to provide Nokia Networks with pocket money. Many egotistical, cashed-up Chinese smartphone companies think they can turn a sow’s ear into a silk purse.
They look at what Lenovo did with Motorola (and that could have been a colossal disaster) and what SAIC has done with the iconic British Brand MG (and the early models were crap). Nokia has little market share in China and Russia, which a Chinese maker could improve. And if they stay out of the Western market, they can use Huawei Harmony OS and Baidu AI for nothing.
In this case, it will take a miracle for the Nokia brand to re-emerge phoenix-like from four sets of ashes.
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