What Nokia should do next

Rather than mimicking Apple or Samsung smartphones in North America and Europe, Nokia should look through its archives - and to its success in Africa - for inspiration.

New Statesman
Relics from another age: discarded Nokia mobile phones. Image: Getty
In the end, I decommissioned my £10 Nokia 1100 out of vanity three years ago. It had survived countless mishaps, including one memorable death-defying dive into a cup of hot tea. Unlike my iPhone, its battery could trundle along for at least a week and no app could be more useful than its built-in torch during a power cut.
 
After Microsoft announced its purchase of Nokia’s mobile phone business for £4.7bn on 3 September, analysts made much of the Finnish firm’s struggles to compete with Samsung and Apple in the smartphone market. But what if, rather than focusing on its weaknesses, the phone giant had the confidence to play to its strengths? Nokia is still the market leader in emerging economies, especially across Africa. The Nokia 1100 was one of the world’s bestselling phones, with a quarter of a billion sold globally, and these cheap, reliable handsets continue to transform the way some of the world’s poorest people live and work.
 
There are now more mobile phone users in Africa than in North America or Europe, the World Bank reported in 2012, but unlike in developed economies there’s still plenty of room for growth. World Bank figures also show that market saturation varies from 28, 38 and 48 mobile phone subscribers per 1,000 people in Eritrea, the Central African Republic and Ethiopia, respectively, to 1,049.2 per 1,000 in the Seychelles. Phone-makers may have to expect low margins when selling to some of the poorest, but there is money to be made in low-cost, highvolume goods.
 
Nokia’s sturdy feature phones don’t attract the same hype as the latest Apple product but African consumers make considerable sacrifices for their mobile phones. According to research conducted by iHub, a Nairobi-based tech community, phone users in Kenya are willing to forgo meals, or walk home instead of taking the bus, to save for phone credit. Phones such as the Nokia 1100 are comparatively low-tech but across emerging economies they have proved arguably more valuable, and certainly more transformative, than any other modern tech gadget.
 
For millions of Africans without bank accounts, mobile money transfer companies such as Kenya’s M-Pesa are overhauling the way many do business and are plugging gaps in the continent’s weak financial infrastructure. The research firm Gartner predicts that mobile payments will rise to $235.4bn by 2013 – and even my old Nokia can be used to transfer funds. Volatile currencies, repressive financial regulation and low bank penetration have led to mobile phone minutes being used as currency in African countries as diverse as Egypt, Nigeria and Zimbabwe.
 
Mobile phones are being used in all sorts of innovative ways, whether by offering crop insurance to Kenyan farmers via M-Pesa, or linking health workers in rural Mali to health-care experts to assist in proper diagnosis.
 
Even in Africa, demand for the Nokia 1100 won’t last. The company’s sales across the continent are declining. Nokia’s challenge now is to use its market clout to lead the way in low-cost smartphones designed for the African market, and its competitors aren’t just Apple and Samsung, but home-grown African companies such as Mi-Fone, headquartered in Mauritius.
 
Perhaps, rather than mimicking Apple or Samsung smartphones, Nokia should look through its archives for inspiration – a long battery life and sturdy design will be essential to a bestselling, lowcost smartphone, and a built-in torch would be wonderful.