Make In India: Nokia To Turn India an Exporting Hub; Aims Africa, Asia Pacific, Middle East From launching exclusive services in the country to reaching its target customers in rural India, HMD Global, the makers of Nokia phones, has expansion plans up its sleeves
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Amid global macroeconomics headwinds, India has emerged as a key market for HMD Global, the makers of Nokia phones. As much as 99 per cent of its smartphones and 100 per cent of its feature phones are made in India. India's domestic manufacturing got a boost post Make In India initiative, companies are leveraging the Production Linked Incentive schemes.
"We are aligned with the Make In India initiative and we are working with Indian electronics manufacturing services (EMS) partners to grow our business here. It's not just competition between companies but it's competition between countries. Right now, China has the scale in terms of electronics manufacturing and we are working towards making India a mobile phone or hand electronics manufacturing hub. So, today 100 per cent of our feature phones and 99 per cent of our smartphones are manufactured in India," said Sanmeet Singh Kochhar, vice president, India and MENA at HMD Global (The Home of Nokia phones).
HMD Global has started exporting its best selling feature phone, Nokia 105, from India and has ambitious plans of ramping up exports from India.
Apart from the United Arab Emirates (UAE), where it has already started exporting India-made phones, the other regions the company is exploring to export from India are Africa, Asia Pacific, Middle East and other Asian countries as well. So, how do they decide on the region? "We are looking at different regions and the two most important parameters include cost of production and cost of delivery at the consumer endpoint. This is where I believe the government schemes and government incentives matter most. We also look at the quality of production and the products we produce in India is second to none. We have invested in staff training and development in our manufacturing facilities in India."
The company has the highest ever market share in feature phones in India which is over 31 per cent in value. There are still over 300 million users who are using 2G feature phones in India. Talking about the revenue split between features and smartphones, he said, "Both bring a significant percentage to our overall revenue."
The rural market plays an important role for feature phones and the company has a strong distribution network in India with over 700 distribution partners. Both online and offline markets remain integral for rural India. But, apart from the rural market, some of the urban cities play a major role in feature phone revenue. "We sell a big number of feature phones in Delhi."
It is coming up with some unique features in smartphones, Nokia G22 is the first Nokia smartphone purposefully designed with repairability at its core, taking signature Nokia phone longevity to the next level. This has been done in collaboration with iFixit, a global repair community. "This is something that we announced in this Mobile World Congress, as of now, we are offering this service only in Europe."
For its Indian consumers HMD Global offers replacement guarantee– wherein if the device encounters any hardware defect it gets replaced by the company. Will the self-reliability phones be part of the Indian market? "It's very difficult to comment on what's going to happen in the future, but this is something that we believe is a trend. We are offering this in Europe and we just need to see what is going to be the response to this and how many consumers actually use it."
Ever since Covid struck, the smartphone industry has been grappling with chip shortage. The shortage has been triggered by previous factory closures globally due to the Covid pandemic, container shortages, increasing shipping costs and sharp rise in demand for automobiles and consumer electronics due to pent-up demand. So, how is HMD navigating the crisis? "Chip shortage started ever since the pandemic struck. Last quarter, the market went down considerably. In India, the market has gone down for smartphones, as well as feature phones. Some of our competitors got stuck up with the big inventories, we work closely with our supply chain partners and teams on the ground. This helps us in understanding the forecast going forward, therefore, we have the in-time inventory management where we produce only when we have the order. This helps us to turn around faster when the demand is going up."
Talking about the expansion plans in India, he said, "We will be coming up with some exciting 2G devices for feature phones, some entry level 4G smartphones and some affordable 5G phones." Moving forward, sustainability will also play an important role. The NokiaX30 5G is made of 100 per cent recyclable aluminum and 65 per cent recyclable polycarbonate and is priced above INR 48,000. Any plans of launching the device in an affordable range? "All our devices can be used for a longer period of time and that is sustainability for me and those devices are available at below INR 10,000 range."
HMD Global is a licensee of Nokia's smartphones, tablets and feature phones. In 2019, the brand raised funding from Nokia. Google and Qualcomm are also investors in the company. Did you ever face any conflict of interest with the parent company? "No, not at all. We work closely and collaboratively with each other. We are looking at the enterprise channel as a key focus area." In 2016, Microsoft sold Nokia's phone operations to HMD Global Oy. Nokia, the parent company, now wants to be remembered as a network company pioneering the space with the power to transform the way we all live and work. Recently, Nokia changed its logo, will HMD be using its new logo? "There is heritage associated with the old logo and we will continue using it."