January 8, 2017 HMD Global, the new company behind Nokia branded devices, launched its first Android smartphone exclusively in China. The Nokia 6 will be sold only through JD.com online store and marks the first device in the new era in Nokia branded smartphones.
Specifications of Nokia 6 are solid. Nokia 6 has 5.5 inch full HD display, 4GB RAM and 64GB internal storage. Device is powered with octa-core Snapdragon 430 with X6 LTE modem. Device holds on to the camera legacy Nokia has left and is equipped with 16MP rear camera with PDAF autofocus and 8MP front camera. The device follows the current trend in biometrics and has fingerprint sensor mounted in the front to the main button. Device is powered by 3000mAh battery, is equipped with Dolby Atmos audio enhancements and has dual speakers with amplifier. Unlike many new phone that have come to markets Nokia 6 is still equipped with microUSB and has retained 3.5mm audio plug.
Nokia 6 runs Android Nougat and with Android OS HMD has much better chances to succeed than Microsoft had with Windows Phone as Android has grown to have over 85% marketshare globally and continues to be strong.
Where the device might have an edge over other devices in the market is design. The device continues the legacy old Nokia had with focus on craftmanship and design. The aluminum unibody is carved from a single block of aluminum, anodized twice and polished. Time will tell how well Nokia 6 holds against other aluminum unibody devices in the same price range.
Nokia 6 will face fierce competition from Chinese brands as there are some very powerful, well designed devices in the price category Nokia 6 is being launched to. One great example is Huawei Honor 6X, that was released to global markets at CES. The Honor 6X has been available in China since October and brings faster processor and dual cameras to the table against Nokia 6. The road will not be easy for Nokia 6 as it will be fighting, not only against new well specd midrangers from local brands, but also against older flagships like Xiaomi Mi5 and Lenovo ZUK Z2 that both have extremely powerful specs but are already competing in the same priceband.
Launching the first smartphone in China is a good strategical move from HMD as China is by far the largest market for handsets currently and Strategy Analytics estimates that 26% of all handsets in 2017 will be sold in China. However, we can assume HMD will not restrict the device only to that market. There is still rather strong interest towards Nokia branded devices in other markets such as India as well and HMD will likely expand the portfolio and reach of their devices to other markets during 2017.
Nokia 6 is launched exclusively through JD.com which is a rational yet bold move from HMD as in China 27% of smartphones is sold through online channels and the share is growing. With single retailer strategy and online only sales, HMD can keep channel margins and logistics expenses low, which increases their bottom-line. However, this is not an unique strategy, as there are numerous of vendors from microvendors to large global players that have similar strategies.
One thing that needs to be remembered though, is that China is extremely competed market and is tough to penetrate despite old reputable brand like Nokia. Huawei holds the top spot in China 3Q'16 and is very strong in that market. OPPO and vivo are close behind. The Chinese market has proven to be tough even for the global leader Samsung that has dropped to 8th position in China with less than 5% handset marketshare in 3Q'16 according to Strategy Analytics HCST service. HMD needs to put extra effort into marketing and promotion if it wants to make any dent to the market.
In China HMD will be fighting mostly over replacement buyers as the market is already saturating. Strategy Analytics estimates that in China over 86% of smartphones will be sold to replacement buyers. HMD needs to be able to persuade the users to switch from some other brand to Nokia if they want to gain share, not an easy task.
The Nokia 6 is a device that can proudly carry the Nokia branding and at 1699 CNY it is targeting a good priceband for a first device. Design and camera are clearly the main selling points of the device but it is not alone as there are dozens of phones competing from the same buyers in China market. Still, the device works as a good reminder for us all that Nokia brand is not dead and comeback is here. Strategy Analytics has been following HMD closely since it was announced in May 2016. We will continue following the journey of this iconic brand in its path back to the top of the handset markets.