India as a country has always been big about the past, about reminiscing the good old days of simpler times and simpler phones. Nokia might have lost its individual identity, but the name still inspires confidence among millions of Indians. This brand value is what Microsoft Corporation (NASDAQ:MSFT) will be looking to leverage as they aim to woo the Indian smartphone buyer with their new line up Nokia branded mid and lower tier Windows 10 devices. With a slew of low-cost 4G enabled devices from Chinese competitors like Xiaomi and Lenovo already capturing a significant share of the market, will this new 4G enabled phone to be able to attract the masses? That’s the question we try to answer as we delve deeper into this latest development.
Microsoft Reveals Its Plans for the Nokia Brand
Last year, Microsoft acquired the manufacturing division of the Finnish telecom giant, Nokia for $7.2 Billion. Once the top dog among phone OEMs, Nokia failed to adapt to the changing scene in the smartphone market. They chose to side with Windows 10 over Android as the OS of choice on their smartphones, and many attribute this very decision to their eventual death.
However, if we take a look at India, Microsoft takes the number four spot in the when we compare Mobile Phone and Smartphone Shipments in the country. The main reason behind this is due to the fact that smartphone penetration is not yet high, and feature phones still sell in relatively high volumes. India is also one of the most promising markets for Windows Phone as the low price and simple UI along with the Nokia trust makes them a viable option against similarly priced Android phones from OEMs of lesser repute. As such Microsoft is looking to expand its market share in India and stop the QoQ slump. It’s not going to be an easy job though as their share in share in the Indian handset market tumbled from 9.8 percent to 8.1 percent between the first and second quarter of 2015.
Microsft has been tight-lipped about the internal hardware of these Nokia branded Windows mobiles headed for the Indian market, but they all have 4G internet connectivity. Along with that, they’ll be running on the latest version of Microsoft’s mobile OS, Windows 10. The cost sensitive nature of the Indian smartphone market hints towards the fact that most of these devices will be mid or low range. The good thing though is that Windows 10 Mobile being less of a resource hog than its competitor Android; will provide a much better User Experience on similar low-end hardware.
Could India be the Centerstage for a Windows Phone Resurgence?
India is the new battleground for smartphone supremacy as the smartphone markets of China and US have already been saturated. India, as a market, is very budget conscious, and thus most of the battles will be fought in the sub 200$ segment.
“Smartphones as a category is growing at a phenomenal pace. The Rs 5,000-15,000 category is exploding and we expect this trend to continue in 2015,” Nokia India Sales (Microsoft Mobiles subsidiary) managing director Ajey Mehta had told in a previous interview. In a more recent interview, he has also divulged that the new Nokia Windows 10 phones will support all bands of 4G LTE in India, something which might give them an edge over the competition.
This will be a real game changer as 7% of all smartphones sold in India in 2015 are expected to be 4G enabled devices. With Airtel already launching 4G services in major cities and other telecom providers like Reliance and Aircel looking to follow suit, this new crop of devices can be expected to perform quite well. Interestingly another report shows that 25% of the smartphones sold in Q2 2015 is LTE enabled which means the potential market for Microsoft could be even more huge!
Hurdles on the Path for Microsoft
The recipe for success seems simple in the smartphone arena, make a good phone and launch it at a good price. However, it rarely is as straightforward as that. Microsoft’s smartphone market share in India declined to 3.2% in the second quarter from 4.1% of a year earlier, according to Counterpoint Research, which should be troubling news for the company.
There are quite a few hurdles that Microsoft will have to navigate to make this phone a resounding success. One can’t help but wonder if they can achieve all of that in the small amount of time left till the launch of Windows 10 mobile. These are the major obstacles the Indian Smartphone Market places in their way, in no particular order,
- Race to the rock bottom price with Chinese OEMs
- Windows 10 app choices VS the vast Android Play Store
- Missing functionality in the Windows OS
- Brand recognition among the youth
Let’s start with the price wars. Xiaomi and Lenovo both have phones with 4G connectivity at the 6k, 8k and the more than 10k INR price range. No matter at what price point the new Nokia devices drop, Microsoft will have their task cut out fighting with these two companies on the spec sheet.
One of the primary reason that people have avoided the windows mobile OS is a lack of apps. Not only do they lack in sheer volume, but often the OS lacks important apps like an official YouTube app. Also, major app developers don’t care for Windows 10 as we see features like voice calling on WhatsApp being rolled out nearly a month later than on Android. This is a major problem for Microsoft as they’re yet to lure devs into their ecosystem.
Along with the app infrastructure, the basic functionality of an OS is found to be lacking on Windows Mobile. India is a place where data is still pretty expensive, and people prefer carrying their media content on a sd card than streaming it from the Internet. This poses to be a major problem as Windows doesn’t natively allow access to the sd card file system via their file manager app. There are other several quirks like these that may turn people away from getting a Windows 10 device.
The youth of this nation are the ones who are the most eager to get on the smartphone bandwagon. But the nostalgia of the Nokia smartphone doesn’t work on them. Nokia may have a tough time creating a new brand image for the younger buyers with charismatic personas like Hugo Barra of rival Xiaomi being extremely popular and Nokia relegated to memes and basic phones.
So What Can Microsoft Do?
With time running out swiftly, there are not many aces in Microsoft’s hand.
They could, however, differentiate themselves from the generic looks of most Chinese devices and add a special hardware or software feature to make their phones unique. That way they will be offer something to the masses that no one else can.
Being the giants in the desktop PC business, and one of the largest tech companies in the world, Microsoft has access to monetary and technical resources rivalled by few other. It’s high time they kick it into gear and develop Windows 10 into a well-rounded system and provide enough reason for developers to be interested in their mobile OS.
Continuum, a new feature showed off by Microsoft, may be the answer to both the above problems. It offers something unique and also opens the door to the vast number of desktop apps available for Windows PC. Just connect your Windows 10 enabled smartphone to a larger screen to enjoy an experience that’s very similar to what it feels like using a Desktop PC.
They will also enable LTE on the Lumia 640 XL and other Lumia devices that have the functionality. Along with that, all devices on Windows 8.1 will get the update to Windows 10, a feat that can’t be matched by the Android OEMs in the same price bracket. This continuous support of older hardware could be an important point that influences Indian buyers who tend to hold onto their electronic items for quite some time.
They will also look to break into the top 5 of the Indian smartphone manufacturers, a list from which they’re conspicuously missing, despite being at the 4th position in overall mobile phone shipments. With Satya Nadella, an Indian at the helm of affairs for Microsoft, one can only hope that the company will have a good understanding of the Indian smartphone user! Hopefully, India’s famous welcoming nature will work in Microsoft’s favour as they look to enter the Indian market with new and snazzy phones but in an old and trusted name!