Nokia a sure bet to re-enter mobile market

Two years after the once-dominant mobile phone brand bowed out to the might of Apple and Samsung and sold its handset business, Nokia is set to make a return.

The company announced this week that it has signed a strategic agreement covering branding rights and intellectual property licensing to newly founded HMD global — run by former Nokia executives — which will create Nokia-branded mobile phones and tablets based on Android for the next 10 years.

Nokia won’t be involved in manufacturing the handsets but instead will receive royalty payments.

What’s a brand worth?

In the pre-smartphone days, millennials around the world may fondly remember the way communications changed for them with a Nokia in their pocket.

But could HMD be banking too much on renewed success for the brand based on nostalgia?

Nokia’s market share slowly eroded with the immense popularity of Android and iOS devices — notably with the iPhone bursting onto the scene in 2007 — and, as a result, struggled to turn into a true smartphone contender.

The company at its peak was valued at US$250 billion (it is now worth around US$30 billion) and branched out instead to manufacture equipment for the telecommunications industry. 

HMD, however, said it intends to invest more than US$500 million  into the brand over the next three years to create the new generation of Nokia phones and tablets.

“We will be completely focused on creating a unified range of Nokia-branded mobile phones and tablets, which we know will resonate with consumers,” said Arto Nummela, CEO-designate of HMD.

It will no doubt have a tough market to crack.

In the second half of 2015, for example, Android led the Australian smartphone market with an estimated market share of 49%, while iOS followed close behind at 46%.

Place your bets

Online bookmaker Sportsbet is offering odds on the company’s success, with a market share for 2017 of over or under 4.5% at $1.87.

“Nokia have lost a lot of ground since they were on top of the market so a turnaround won’t happen overnight, and we’re tipping that will be the case,” said Will Byrne at Sportsbet.

In terms of who will be the top dog by the end of 2017, the bookmaker is offering Samsung the crown at $1.80, ahead of Apple on $1.95 — with Nokia a clear outsider at $34.

Odds are also being offered at $101 for the brand to topple Samsung and Apple by 2020.

While that does sound crazy, keep in mind the unexpected can happen — Leicester City just won the 2016 English Premier Football League at 5000-1 odds. So would you put money on it?

Image courtesy of brett jordan under CC-BY-2.0