EXCLUSIVE: Serious Questions Raised About Nokia Smartphone Business
As Motorola, TCL and Samsung crank up their 2021 smartphone range in Australia, serious questions are being asked of the Nokia brand.
Country Manager for HMD Global, James Robinson, a former Telstra employee, called in his PR minders, who demanded written questions, when we moved to question him about the brand’s success in Australia.
Nokia smartphones are a licensed smartphone brand name that is now owned by a European business called HMD Global.
When we recently approached Robinson to get a comment on how the business was doing in Australia, he refused a telephone interview; instead his minders, Sydney based PR Group Adhesive, emailed us demanding written questions.
I have been around the tech industry for more than thirty years and I always get suspicious of executives who need to call in their PR minders, or appear incapable of answering questions about their own business without having to have their answers sanitised by some PR hack.
We refused to supply written questions, but we did become suspicious of why he was ducking for cover behind the protection of a PR company when his competitors openly talk to ChannelNews about their business.
A search of the Australian Securities & Investment Commission database failed to reveal any registration for a company called HMD Global – who operate the Nokia web site in Australia and were the company who appointed Adhesive PR to their account.
Nokia is a registered trademark of Nokia Corporation, which HMD Global licences to stick on phones and tablets manufactured by Foxconn subsidiary FIH Mobile.
This business is not registered in Australia.
What we did find was a business called HMD Mobile Australia Pty Ltd, however there is no mention of this business on the Nokia or HDM Global web sites that promote their smartphones to Australian consumers.
The director of this business is one Qiong Zhou, whose address is listed in Espoo Finland, the address of HMD Global.
In 2019, the HMD Mobile Australia business had revenues of $2.5M in December, 2019; revenue fell to $2.3M at year-end 2020.
Profits also fell from $37,842 in 2019, to $17,545 in 2020, with the business struggling to generate the capital to invest in marketing.
In comparison, the distributors of the TCL-owned Alcatel brand had revenues in 2019 of $97M. They sold over 800,000 Alcatel smartphones in Australia in 2019.
Australian corporate law states that companies in Australia must be registered with the Australian Securities and Investments Commission (ASIC).
ASIC told ChannelNews that it’s an offence to carry on business under an unregistered business.
Back in March 2021, public relations agency Adhesive claimed that they had been appointed as the PR agency of record for HMD Global, the owner of Nokia phones, across Australia and New Zealand, despite there being no local registration of the HMD Global name in Australia.
Adhesive said at the time that they will manage PR, influencer and social media activity for HMD Global, who appear to have also failed to provide any contact details for consumers in Australia on their Nokia web site.
We asked James Robinson to confirm whether the HMD Mobile entity is owned by HMD Global. He did not reply.
We also want to know what entity the business is trading under in Australia and what local entity a consumer would sue if they ever had a claim against the company.
Adhesive is the same PR agency who acts for Sony, who have been exposed on several occasions for their questionable behaviour. They were also the PR company for failed Chinese company Huawei Mobile, who often lied to the media.
On three occasions Sony Mobile denied that their mobile business was set to be closed down, it was eventually closed down.
Globally, Nokia is one of those brands that has lost more market share than they have gained during the last 20 years, with both Apple and then Samsung stripping share away from Nokia, who eventually quit the smartphone market.
Last week, the licensee of the brand HMD Global, rolled out a “tough” Nokia smartphone for tradies, which their PR company thought was more appropriate for the Australian newspaper reader than a publication that reaches a blue-collar tradie.
The HMD Nokia XR20 is a large smartphone with a 6.67-inch full HD display that the company is trying to flog to for $897. It’s basically the same as a $499 TCL, Samsung or Motorola smartphone which, if you add a $59 BodyGuardz top end protection cover, gives the same protection as the more expensive Nokia device.
Having dropped from the top slot in the Australian mobile market, the business is today wallowing along the bottom of the market, with brands such as Motorola and TCL stripping share away from the European licensee.
Recently, the business was forced to raise capital as the market moved to 5G.
In 2020, HMD Global moved to raise US$250 million in an effort to fund new handsets and R&D investment, with both Google and Qualcomm investing in the global company.
The Finnish mobile phone company already had an established partnership relationship with Google.
In 2014, Microsoft acquired Nokia’s mobile phone division for US$7.2bn.
But after the Windows phone’s failure to achieve popularity, Microsoft offloaded the company in 2016, selling its feature phone assets to Taiwanese electronics manufacturer Foxconn and the newly established HMD Global for $350m.
Responding to the largest funding round in the company’s four-year history, Chief Executive Officer Florian Seiche said, “This significant investment with some of closest strategic partners really allows us to accelerate our journey going forward.”
Seiche hailed the launch of the Nokia 8.3 5G, the company’s first 5G device, as key to the company’s success.
Referring to mid-2020 he said, “We believe the second half of this year (2020) will see a broader set of 5G phones in the market, and we believe the true mid-tier range will probably be in the first half of next year.”
Although keen to emphasise the closeness of its relationships with its prominent partners, HMD did not reveal the individual amounts that were invested. Instead, Seiche maintained that the contributions from the three were “each very sizeable parts of the total.”
Robinson has failed to explain why Nokia is doing so poorly in the Australia market where the brand name is well known.
He has also failed to explain why existing Australian Nokia users are having to wait for Android 11 updates.
Recently the company delayed Android 11 updates for most of its phones.
HMD originally announced its timeline to deliver Android 11 updates in October of last year.
At the time, three Nokia phones were expected to receive Android 11 before the start of 2021, with the rest of the recent product line-up to follow in the first half of 2021.
That timeline was already a bit slow, considering HMD Global doesn’t make many significant changes to the Android operating system, but HMD couldn’t even maintain that schedule.
The Nokia 8.3 5G was the company’s first device to get Android 11, and its update came in February 2021, instead of Q4 2020.