Did Foxconn screw up buying the Nokia brand?

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Published onMay 22, 2016

published onMay 22, 2016

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Yes,the rumoris now official: Microsoft is selling the Nokia brand to Foxconn, finally ending its continuing phones business. We can all agree that Microsoft made a huge mistake when it bought the Nokia brand, only making it worse by stubbornly trying to revive customer interest in it.

Microsoft never managed to score a profit in selling Nokia phones. In fact, it actually sold the devices at a loss — and continued to do so for years. The best decision would have been to either stop manufacturing and selling Nokia devices, or sell the Nokia brand a lot earlier than right now.

Why would Foxconn buy something as unsuccessful as the Nokia feature phone business? This could negatively impact their future business, after all, especially having witnessed Microsoft’s attempts over the years. But the Chinese manufacturers simply wanted the brand because there, and in a consortium of emerging markets, Nokia is actually very popular. This could be the direction Foxconn is heading towards after closing the deal.

It could be that Foxconn will continue to sell dumbphones to emerging markets under the Nokia brand for profit while taking advantage of the loyalty for Nokia people have in these regions. At the same time, Foxconn could develop affordable smartphone models ranging from $150 to $300. The company could sell the $300 phones on the world’s markets and roll out the $150 devices to emerging markets as early as the beginning of 2017.

While emerging markets are not yet saturated with dumbphones, customer preferences are slowly shifting towards smartphones. Foxconn probably sees this as an opportunity to feed that demand with dumbphones this year while setting them for the affordable $150 smartphones going forward. In this manner, the Chinese giant can make sure it has an available market for its products, keeping the cashflow coming.

What specs could the new phones have? Well, it would be nice if Foxconn brought back the long lasting battery Nokia phones are so famous for, especially since it will probably run Android. A phablet with an 8MP camera and 4G connectivity with better specs for the $300 version, would do.

In conclusion, Foxconn wants to take advantage of the Nokia brand loyalty and involve itself in emerging markets with affordable smartphones, while leaving competition to focus on the high-end pricey terminals.

What’s your take on this? Could Foxconn also have other plans in mind?

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Did Foxconn screw up buying the Nokia brand?