Nokia has big ‘Asha' from India

Thomas K. Thomas London | Updated on October 29, 2011

In February this year, Mr Stephen Elop, CEO of Nokia sent a 1,300-word note to the company's employees comparing the handset firm to a man standing on a burning oil platform with the raging fire, on one side, and cold dark Atlantic water on the other side. The primary objective of that letter was to drive home the point that something drastic and unprecedented had to be done to turn around the fortunes of the company, which had lost market share in the handset space to Apple and Android-based phones since 2007.

Eight months since Feb, on Wednesday, Mr Elop, while launching the first “real” Windows phones, said that it is a new dawn for the company. He said that the Nokia Lumia series signals the company's intent to be leader in the smartphone segment. The Lumia phones will be in India by the end of the year, ahead of other countries such as the US. Nokia also launched a new series of mobile phones branded ‘Asha', derived from Hindi, meaning ‘hope'. Business Line was among the few select media outlets from across the world to get an opportunity to speak with Mr Elop on the sidelines of the Nokia World at London. Excerpts.

While announcing the rollout of Windows phone, you talked about partnerships with operators. While this may work in markets like Europe and the US, in India the market has not really supported the operator-bundled model. So, will Nokia look at a different model when the Windows phone is launched in India later this year?

There is a range of different ways to go into market. There is bundling/subsidy model and then there is the open distribution model where operators are not actively involved in sales. India is more towards the open distribution model; so what we have done is that we have made sure that the retail and distribution is very strong. We have over 200,000 retail outlets in India alone. In just a few weeks after we launched dual-SIM phones, more than 200,000 outlets were selling those. That's an example of the incredible market force that we have in India. In other countries like the US, and (regions like the) EU the operators have much role to play. So, we choose our strategy accordingly.

What role can India play in your overall turnaround strategy other than being an important market? Do you plan to leverage on the developer community and also manufacturing capabilities in the country?

The interesting thing is that Nokia has a global reach and the promise to a young Indian developer is that ‘work with us and we can give you reach and help you make money'. In my keynote, I said that each of our developers has seen over one million downloads. I got that thought when I was recently in India and had a roundtable with about 20 Indian developers. They all had a million downloads. That's very encouraging to them. On the manufacturing side, we have a strong presence in Chennai and this is a major part of our strategy. Many of the phones sold in India are now made in India and we also export. I was pleased to meet Government officials there during my recent visit and we have agreed to work with them to improve manufacturing capabilities further.

Nokia has missed reading some major trends in the Indian market, which made it slow to meet customer demands. For example, it was only recently that the company launched dual-SIM phones but isn't it (already) too late?

First of all, you are correct about the fact that Nokia was slow and late to enter the Indian market with dual-SIM phones. But, it is incorrect to say that it is irrelevant anymore. We went from being a company with no dual-SIM to having 18 million phones sold with dual-SIMs. So, if you have a strong brand (which we have in India), you execute well and have great products, it is amazing how quickly you can make progress. So, we have already taken back a huge share away from some local and Chinese manufacturers.

But the point about need for urgency is correct. In February, when we said we are changing the course of this company and we have a new strategy, we also said we are changing the way we work. On Feb 11, I did not commit to a Windows phone because I did not know when we could have it, but today we announced not one but two devices. So, that's one example of increased urgency of the company. We know that we have to do more; we have to be in the market and fast.

It is very disappointing that Nokia is planning to launch the new Windows phone in the US market only by next year. What is the delay due to?

The primary reason that we have sequenced the launch is that this is a brand new product for us. It involves new hardware, new software, new customer care; and we have to establish new supply lines. So, we are very deliberate in doing this.

We also want to be able to go into the market and go in aggressively with proper investments in marketing. In any case, early 2012 is not that far away.

I also said that we will be introducing LTE and CDMA products and this is relevant to the US as well as other markets. But I like to hear that many people in the US are disappointed.

Many of the consumers in markets like the US have not used a Nokia phone for over 10 years. How do you plan to build a profile among such users who are not familiar with your brand? How do you create space for Nokia in their minds?

What we have to do is to get the message to people. We have work ahead but we believe we have the fundamental ingredients to do that. We also have support of the operators. Operators are in a position to strike a balance between various ecosystems. We have to be conscious on how to present our brand and communication. I am very focused on the quality of experience.

What's the most important metric to watch right now is measurement of one's willingness to recommend product.

The best way to break through into markets is to get the device into someone's hand and make their experience ‘wow'. At the end of the day, if we deliver devices that attract your attention, the word will get around quickly. I think we can break in there.

The Windows phone launched does not seem to be too different from other Windows phone in the market. How do you create a differentiation for Nokia?

Windows phone clearly differentiates with other ecosystem phones. But within the Windows ecosystem it is important to note that this is the first real Windows phone. What we have been able to demonstrate is that we can move faster, and as time proceeds, we will be able to differentiate more and more.

But a word of caution — as much as we make everything different, it's not everything. Our principle competition is not other Windows phone manufacturers but manufacturers of other ecosystems. Its Windows phone vs Android first.

What are the next things to be done as part of your strategy?

Next step is to get the new products into stores. Then we need to expand across operators, and radio technologies, continue with the process of rolling out and cascading devices at higher and lower price points in the months and years to come.

Published on October 27, 2011

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