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Could Nokia make a comeback in the US?

The Nokia brand is very much alive and kicking. HMD, which licenses the brand, has unveiled Nokia phones at US carriers for the first time in four years.

Will Nokia’s budget phones gain consumer traction?

The $70 Nokia 2V (5.5-inch HD screen, Snapdragon 425, 8MP/5MP camera, 4000mAh battery) is exclusive to Verizon Prepaid and the $160 Nokia 3.1 Plus (5.99-inch HD+ display, 18:9 aspect ratio, 3500mAh battery, Google Pay, fingerprint sensor) is exclusive to Cricket Wireless.

Both phones use stock Android stock UI, which will help with faster OS updates and facilitate general ease of use. Nokia’s strong brand awareness will help HMD gain immediate visibility and traction with consumers.

A brief history of Nokia

In the mid-90s Finnish giant Nokia was one of the world’s top mobile phone manufacturers. But Nokia management was slow to catch up to Blackberry, and then to the mass smartphone bandwagon, which all but wiped out the brand from the cell phone industry.

The company was sold to Microsoft who then sold it to FIH Mobile, a division of Chinese manufacturer Foxconn, till another Finnish company HMD, made up of former Nokia executives, licensed the Nokia brand.

Carrier support is essential in the US

Carriers remain the primary source of phone distribution in the US and HMD needs carrier distribution to succeed in this market. In the past, Nokia-branded phones have mostly been sold through unlocked channels; some Nokia phones still are unlocked.

Although the 2V and 3.1 Plus are available only in the pay-as-you-go channel, prepaid wireless services have now become a significant growth engine for US carriers, and carrier support puts Nokia back on the US wireless map and may help widen the purchase base.

HMD has been investing big money in marketing, which has helped it garner carrier support in other countries; nevertheless getting on Verizon’s shelf, which is one of the biggest carriers in the US, is a coup for a two-year-old company with 500 employees, and a prepaid phone smooths the way towards the large consumer base of Verizon’s postpaid. Similarly, Cricket is a prepaid growth engine for its parent company AT&T and will likely open doors for HMD to enter AT&T.

The new Nokia phones have solid features but nothing sets them apart from the competition in terms of either features or design. HMD also misses out on a large base of the prepaid market due to carrier exclusivity. However, Nokia’s brand reach should provide HMD with “mindshare” and sales traction with consumers.

The new smartphones are economy devices that allow HMD to sidestep the Apple-Samsung duopoly in the US. With Nokia’s global brand reach and an enduring consumer association with affordability, reliability and ease-of-use, HMD is also well placed to take advantage of the gap left by ZTE and Huawei in the prepaid economy tier. LG and Lenovo would also be well advised to watch out for Nokia in the prepaid market.

This article also appears on Verdict, which is part of the same group as GlobalData and NS Tech