HMD Global plans big 'make in India' push for Nokia phones
05 April 2018
HMD Global, the official exclusive licencee of the Nokia brand for phones and tablets, will progressively switch to manufacturing all components for the local market in India by 2022, a top executive said.
“Until this year, we imported all our components and assembled them here. Now we will be manufacturing some of the components in India as well ... next year more, and the year after that even more. It’s going to be a phased manner in which we start switching to component manufacturing also,” Ajey Mehta, vice-president and country head for India said in New Delhi on Wednesday.
The company is getting aggressive in the Indian market. After launching the Nokia 2, Nokia 3, Nokia 5 and Nokia 6 last year, it has now launched four new Android smartphones that were announced last month during Mobile World Congress in Barcelona.
"Of the 70 million Nokia smartphones sold globally, India is amongst the top three markets contributing to the global sales for Nokia smartphone. We have even registered a 5-fold growth during the last eight months. And 2018 is the year where we will really scale up," Mehta said.
HMD Global has entered into an association with the Shah Rukh Khan-owned IPL team Kolkata Knight Riders as its principal sponsor.
Mehta said, "A lot of people are asking us that we are still doing the same old things. But this partnership is to announce that Nokia is back. People know Nokia but they don't necessarily know what the Nokia Android smartphone is. It will also drive contextual awareness about our phones. The partnership will also help us in connecting with our fans. The kind of fan following IPL (Indian Premier League) has is the kind of consumer base we want to reach out to."
This year, the company will focus on three main aspects. The first is to expand product portfolio, the second is innovation in the way they run their business, and thirdly, deepening channel presence. In India, HMD Global has expanded its offline footprint and has a network of over 510 distributors with over 100,000 stores. Apart from the partnership with ecommerce players, the company has started selling smartphones through the Nokia Mobile Shop.
Three out of four Android smartphones launched today, the Nokia 1, the New Nokia 6 and Nokia 7 Plus, will be manufactured at the Foxconn facility in India. However, the Nokia 8 Sirocco, the most premium of the lot, will continue to be imported into the country. As there has been an increase in the import duties of mobile components in the country, Mehta says, "We are following the phased manufacturing program with Foxconn. We are a little late but over time we will be in line with the phased manufacturing programme."
The New Nokia 6 has been priced at Rs16,999, Nokia 7 Plus at Rs25,999, and the Nokia 8 Sirocco at Rs49,999.
The company is also focusing on expanding its presence in the enterprise channel. Mehta said, "We are on Android One, the purest and securest version of Android, which enterprises are keen to adopt."
With an aim to boost local manufacturing, the Union government on 2 April imposed a 10-per cent basic customs duty on import of smartphone components such as camera modules and printed circuit board (PCB) assembly. Prior to this, there was no import duty on these components. Moreover, in the budget for 2018-19, the centre had increased customs duty on mobile phones to 20 per cent from 15 per cent.
“PCBs will attract a duty from this year, so we are ramping up our manufacturing to make sure we manufacture the PCBs in the country. We are doing it (manufacturing) with Foxconn. Similarly, the other parts of the phone over a period of time,” Mehta said, adding that he expects that by 2022, “a few things will continue to be imported, but almost the entire component ecosystem will start to set up in India”.
The company is also in talks with the government for support on the mobile components ecosystem.
“For example, for the (phone) battery, the plastic and copper industry is key to make business sense for the components ... the next focus has to be on building the components’ back-end ecosystem,” Mehta said.
Nokia phones are manufactured at the Foxconn plant near Chennai. The company gives its manufacturing requirements to Foxconn which then builds its manufacturing plan in terms of geography and volume.
Finland-based HMD Global was started by former executives of Nokia and set up business operations in India last year, followed by the launch of a dozen or so devices throughout 2017. It has partnerships with Google for the Android operating system and with Taiwan-based Foxconn for manufacturing devices.
“Our ambition is to be a full range player, catering to all consumer segments, and through the year we will be launching either new devices or refresh our existing devices. In the next 2-3 years, our ambition is to be among the top three smartphone players and in the next couple of years, to be among the top three feature phone players,” Mehta said. India is among the top three markets in terms of volume as well as revenue for the company globally.