HMD Global, the Finnish start-up that owns the rights to use the Nokia brand on mobile phones, is ringing in the new year with two key focus points, while staying true to its primary focus, which is to offer competitive devices with pure, secure and up to date software.
The first being, it is looking at India as a very important market, both from sourcing as well as sales point of view. Second, it is looking to launch more affordable 5G devices after having secured $230 million of investment from partners including Google, Qualcomm and Nokia Technologies last year.
At the same time, HMD Global is seeking more clarity on certain laws and provisions from the government, while hoping for a balanced approach on custom duties for various electronics components in the upcoming budget.
In an exclusive interview with TheSpuzz Online, HMD Global vice president Sanmeet Kochhar shares insights on the challenging, yet noteworthy year that was 2020, and all that lies ahead in 2021. Excerpts.
The year 2020 was unprecedented. No one saw the pandemic coming. How did your brand adapt to it?
We have factories around the world including India (we are already manufacturing 100% of our devices in India). We looked at different options including how we can leverage India as a country and as a market, not only for our fans but also for our sourcing needs and we took some concrete steps on what we are going to do in terms of manufacturing our devices in India.
We are now back at 100% capacity. When we moved into quarter three, as soon as we moved out of the lockdown, we started to ramp up our capacity and we knew very well that, the mobile phone segment is very resilient from a demand point of view. We were very proactive in terms of managing our supply chain within India, during the lockdown and we worked with our partners to see how we can create an atmosphere of safety inside the factory. We worked with our partners to see how we can arrange transport to get them from different locations. We also arranged for regular testing and social distancing, and sometimes dorm facility where they would be staying.
In terms of our partners, we expanded our distribution in India with 700 plus distribution partner strengthening our offline presence.
Can you elaborate on your ‘make in India’ aspect?
We are fully aligned to the Make in India initiative. The PLI scheme is also a wonderful initiative. Foxconn has a subsidiary referred to as RSMI which manufactures a important quantity of devices that we sell in India. Their manufacturing facility is situated close to Chennai. In addition, there are various other partners and places that we leverage for our device production.
There has been concrete progress in terms of the quantity of elements that we have been sourcing in India. The quantity of elements that we are procuring from India or rather, our partners are procuring from India, has gone up. We work by means of our partners at manufacturing places. For the launch of Nokia C3, we worked with an Indian companion. Similarly, you will see more and more devices coming in, which are having manufactured with our Indian partners.
What are some of the challenges involved?
India is becoming quite crucial from a sourcing point of view, but we also should recognize that producing a mobile phone entails a lot of methods, from the design and style of the item to element procurement, to then producing the device, packaging and shipping it. This is not some thing that can come about overnight. And this is some thing that China has been in a position to make more than a period.
We have to have enormous applications, like coaching and upgradation of abilities and technologies to get to that level. I feel we have produced the proper begin and are quite closely seeking at how we can leverage India, as a nation for driving our provide chain and sourcing.
Most importantly, how extended prior to you see India becoming an export hub?
India as a supply for our exports is some thing that we are evaluating quite closely. It is challenging to give a timeframe, but as I stated, India is an crucial marketplace for us, and we will continue to evaluate India, not only for our domestic consumption, but also from an export point of view.
Are you seeking to set up your personal factories, and take manufacturing in your personal hands?
As a aspect of our general organization technique, we work closely with our partners. We have distinct partners, like Google, Qualcomm, Nokia, and other individuals in the ecosystem and we work closely with our partners to see how we can supply the very best items to our fans. So, the answer is no.
What does 2021 appear like for HMD Global, and by extension, for Nokia mobile phones?
We are seeking at India as an crucial marketplace and the initially factor that we are going to do is appear at items which are customized for the Indian marketplace. Second is 5G, which is an crucial space that we have decided to play in, and we are seeking at how we can launch more cost-effective 5G devices this year.
Our general concentrate will be on communicating our differentiation from competitors. Our differentiation lies in terms of getting a far better, future-proof computer software. When you are acquiring a Nokia phone, you are having computer software which is going to final for considerably longer and then you will not be forced to adjust your device (as regularly).
And then, ultimately the enterprise space. This is an crucial one for us, and we will continue to see how we can concentrate on this space to provide the proper type of proposition for our fans.
What are your expectations from the Union Budget 2021?
It would be specially excellent to see how we can get the domestic demand back on track, build momentum in the economy for more and quicker job creation, and how spending can be improved with out raising inflation levels.
Considering the increasing significance of ‘Make in India’ and ‘Self-Reliant India’, there might be a rise in custom duties for a variety of electronics elements. I think the government requirements to think about a balanced method and pace the nation by means of this adjust, as price tag raise could hurt the sector throughout the pandemic and possibly, the finish-customer.
As an sector, we are also hoping for more clarity on particular laws and provisions. For instance, the law relating to TDS on e-commerce transactions for third parties promoting their items on a brand’s e-commerce portal, specially when there is no commission/income earned by the brand. Another clarity required is concerning the scope of ‘significant economic presence’ (‘SEP’), which in its present type is fairly wide and involves any activity with respect to sales of goods, services, download of information/computer software beyond a threshold.
Finally, the government need to think about abolishing or restricting the Dividend Distribution tax (‘DDT’) that increases the powerful tax price on distributed income and need to think about supplying a refund of accumulated input GST credit to assesses exactly where the accumulation is beyond a period of 2 years.