Nokia makes bold moves to connect ‘the next billion’

A picture taken on October 21, 2010 shows the logo of Finland's mobile phone maker Nokia on the window of Nokia flagship store in Helsinki. The world's top mobile phone maker Nokia says it is positioning itself to connect to future consumers under its “Next Billion” strategy and arrest the decline in its share of the profitable and ultra-competitive mobile phone market. AFP PHOTO/LEHTIKUVA - MARKKU ULANDER

MANILA, Philippines—The rapid increase in the sales of feature packed and high-priced smartphones may lead one to believe that the only type of phone that the world needs now is one that provides instant connection to social networking sites and the million or so applications, takes high resolution photos, on top of being able to call or text friends, family and colleagues.

But according to Finland’s cellular phone maker Nokia, one of the world’s largest handset manufacturers, there is still a significant portion of the global population that does not have a mobile phone, let alone one with gigabytes full of high-tech applications.

This is why Nokia has not forgotten this market and adopted a strategy to continue producing feature-packed phones—specifically the popular Series 40 phones that have just reached the 1.5 billion sales mark —at an affordable price point.

Nokia believes that tapping into this market will surely yield for the Finnish giant notable income growth in the years to come, while getting the “next billion” still without a mobile phone connected to the wired world.

In an e-mail interview with the Inquirer, Juha-Pekka Sipponen, head of products of Nokia’s Mobile Phones Unit, expounds on now Nokia is positioning itself to connect to future consumers under its “Next Billion” strategy and also arrest the decline in its share of the profitable and ultra-competitive mobile phone market.

Q: Can you expound on the “next billion’ strategy? How exactly does Nokia plan to connect the next generation of customers?

A: We want to create the best possible Internet experience for those either purchasing their first device or those that want to upgrade to better Internet connectivity.

No matter what our customers can afford, they expect a lot from their mobile phone.  They have high demands for entertainment and seamless social contact. They want to learn new skills and improve their prospects for growth, both personally and to do better at their jobs. For many of our customers, their first interaction with the Internet comes through their mobile phone so it is a great responsibility we have to give the best experience. And it’s not just Internet, a Nokia mobile phone is often the primary (or only) music player, FM radio and camera.

We’re on a mission to make the Web truly worldwide! Doing good and unleashing opportunities by enabling people and societies to realize their potential. And for those areas without Internet access yet, we also provide information and services via products like Nokia Life Tools, which give access to healthcare information and banking services; they can learn new languages and find relevant market information for their business all via SMS.

Q: Why do you think the Series 40 devices have been able to strike a chord with customers? How do you explain their popularity and what were the specific game-changing models?

A: The Series 40 platform has contributed to making mobile technology accessible to the masses and continues to change peoples’ lives for the better. The 1.5 billion milestone is a sign of the enduring value that Series 40 phones offer to consumers and our developer partners. Through the years we’ve increased the utility of the phone by adding features and capabilities beyond calling and texting. Some of the more unusual innovations have happened because we’re careful to consider the environments that our phones are used in.

In some countries there can be frequent power outages so we have extended battery life and, in some cases, provide a flashlight on the phone. We have included rubber grips to phones sold in humid places and developed dust-proof keypads to maximize use in sandy environments. Our phones support over 80 languages and increasingly offer local services available via SMS or the Internet.

Q: How do you think the mobile phones over the next five years would look like? Will all phones be smartphones eventually?

A: It’s easy to think that all phones will be smart phones within five years but remember that there are billions of people in the world who don’t yet have any kind of mobile phone. Not everywhere is lucky enough to have affordable Internet access and the demands for mobile telephony vary almost as much as the personalities of our customers all over the world. We are very honored at Nokia to have played a part in connecting much of the world via mobile voice, text message and Internet but there is still much to do at every level of our offering and Series 40 is a big part of that.

Q: And assuming that the phones will be smartphones, how does Nokia plan to compete in this space considering the market leadership and popularity of the Apple and Samsung products?

A: Our introduction of the Lumia Windows Phone has received a hugely positive response from customers, developers and operators alike. Since mid-November, we’ve gone from zero markets to 15 markets, from zero devices to well over 1 million devices. From no presence in the US to being a lead in AT&T’s LTE launch. We’re delivering on our strategy as promised and beginning to see the fruits of those labors. However, smartphones are just part of our business and the new Asha family of phones is the latest innovation of the Series 40 platform. There are still huge opportunities for this platform and its popularity with consumers all over the world.

Q: Where in the world do you see Nokia getting additional customers? Will Asia remain the market to be in?

A: Asia is a hugely important market for us in all areas of our business.  We’re seeing a great response to our new Asha devices. So much so that industry analysts have created a new category of phone to incorporate Asha’s innovations—‘Smartphone Lite’ is the name for new phones like Nokia Asha that blur the lines between feature and smart phones. Nokia Asha phones offer social media access, Internet browsing, games and apps, so the term ‘feature phone’ just doesn’t do them justice any more. Our customers in Asia are very demanding at every level so it’s great to see a positive response to Nokia Asha Series 40 devices.

Q: How would you describe the customer of today, and what are his or her quirks that are forcing telecommunications companies to adapt to quickly?

A: Our target consumers share a common trait of being very aspirational and concerned with style as well as technical quality. They want to be connected, and they have high expectations from their device, regardless of what they can afford to pay for it. Their needs and usage preferences vary and one size doesn’t fit all. How our consumers engage with apps is fascinating and we’re working very hard on making interaction with these services easier and cheaper where possible by simplifying (and often removing!) registration requests and offering try-before-you-buy opportunities on many apps.

Our customers are very savvy and know how to get the best out of their devices—we learn lots from them every day! Nokia is in a very fortunate position to be present in most markets, so the knowledge and insight we have into our customers’ desires and expectations is invaluable. Our customers are dynamic and it’s great fun to adapt with them.