Nokia's X Factor : Rebuild Smartphone Leadership & Drive Microsoft-Nokia Cloud Services To Mass-Market

Nokia the world’s second largest mobile phone supplier unveiled a new family of smartphones at Mobile World Congress (MWC) 2014, the Nokia X series based on Android Open Source Project (AOSP) for the first time. In other words Nokia has circumvented the Google using its Android platform by replacing the (GMS) Google mobile services & APIs with essentially Nokia APIs and Nokia-Microsoft services.  Nokia X series is an important step for the Finnish vendor to rebuild its position in the very important high-volume “affordable” sub-$100 wholesale price-band smartphone segment.

Nokia X Series : X, X+. XL

Image Credit: Nokia

 According to Counterpoint Research’s Market Outlook service while overall smartphone growth will slow down in 2014 compared to previous years but the sub-$100 wholesale smartphone segment will grow above-average to more than 350+ million units in 2014. Also, majority of the growth in this segment will be driven by Android based smartphones considering the low-cost advantages.

Hence, for scale  players like Nokia competing in this segment with Asha devices is not enough and thus need the Windows Phone based Lumia series to trickle down in this price-range quickly. However, pushing Windows Phone down the price-tier might be difficult in near-to mid-term as  building a broader Lumia portfolio with low BOM costs is difficult to achieve mostly due to Microsoft’s tightly controlled restrictions to maintain the optimal User Experience. Hence, Nokia X family fills this big and important  gap left between Lumia and Asha range brilliantly by addressing multiple challenges ( & that too immediately) which have been restricting Nokia from growing in this high-volume segment:

  • Achieving lower BOM costs
  • Multi-SIM support (key feature for emerging markets which are mostly driving this segment)
  • Access to nearly a million Android apps
  • Taking Microsoft services (e.g. Outlook, OneDrive, Skype, Bing etc.) & signature Nokia experiences (e.g. Nokia Camera, Music, Here maps, etc.) to mass-market

With Nokia X series, Nokia not only  achieves the above goals but also instills confidence across distribution channels, consumers offering multiple choices from Asha to X to Lumia. Nokia should be able to easily differentiate from long tail of Android vendors  in these prepaid-centric and unsubsidized high-growth markets primarily due to the following factors:

  • Strong Brand awareness
  • Extensive distribution and service networks
  • Striking, colorful Lumia design language and industry leading build quality
  • Curated Nokia store experience (of Android Apps)
  • Signature Nokia & Microsoft apps, experiences and cloud services
  • Multiple device SKUs :  X,X+ & XL (phablet)
  • Clean, simplified UI and Unified “Fastlane” notification center: easier for existing Asha users to upgrade
  • Strong commitment to developers and building own suite of high-value apps & services

In light of above positives, if Nokia can execute their go-to-market strategy well with crystal clear messaging to the channels and consumers on how the entire Nokia portfolio makes sense offering consistent design, experience, high value and multiple choices offered and that too in a very “sweet spot” price-band should help the Finnish vendor propel back into the top 5 global smartphone rankings fairly quickly and improve the top-line and bottom-line in long-term.  India, China, South East Asia and Latin America will be the key markets for the Nokia X family.

From Microsoft’s perspective Nokia X  series should be one of their vehicles to drive their horizontal services strategy bringing it to the next hundreds of millions of consumers which wouldn’t have been possible (immediately) with Windows Phone ecosystem or partner expansion alone.

In terms of some caveats, Nokia in atleast a year’s time will need to push the Asha platform down to sub-$30 wholesale ASP price-points to accommodate more of X series phone from $75-$150 retail price bands..

Secondly, since this is a global version of Android fork, Nokia will have to reproduce a special “Chinese” fork which will cater with special Chinese apps and services to compete well with likes of Xiaomi or Huawei. Additionally, we see with this strategy Nokia will have to maintain or drive multiple platforms (Windows Phone, AOSP, Asha, S40/30)  in their portfolio similar to Samsung (Android, Windows Phone, Tizen, proprietary)  which could become resource intensive.

However, it’s always positive for any company to see their own products cannibalize their own products rather than competitor products cannibalize their products. So even if Asha, X or Lumia models overlap in terms of pricing for short-term it offers multiple choices to consumers and more opportunities for Nokia to acquire more consumers and increase its marketshare.

For more info, press enquiries or further questions please contact:

Neil is a sought-after frequently-quoted Industry Analyst with a wide spectrum of rich multifunctional experience. He is a knowledgeable, adept, and accomplished strategist. In the last 18 years he has offered expert strategic advice that has been highly regarded across different industries especially in telecom. Prior to Counterpoint, Neil worked at Strategy Analytics as a Senior Analyst (Telecom). Neil also had an opportunity to work with Philips Electronics in multiple roles. He is also an IEEE Certified Wireless Professional with a Master of Science (Telecommunications & Business) from the University of Maryland, College Park, USA.

Term of Use and Privacy Policy

Counterpoint Technology Market Research Limited


In order to access Counterpoint Technology Market Research Limited (Company or We hereafter) Web sites, you may be asked to complete a registration form. You are required to provide contact information which is used to enhance the user experience and determine whether you are a paid subscriber or not.
Personal Information When you register on we ask you for personal information. We use this information to provide you with the best advice and highest-quality service as well as with offers that we think are relevant to you. We may also contact you regarding a Web site problem or other customer service-related issues. We do not sell, share or rent personal information about you collected on Company Web sites.

How to unsubscribe and Termination

You may request to terminate your account or unsubscribe to any email subscriptions or mailing lists at any time. In accessing and using this Website, User agrees to comply with all applicable laws and agrees not to take any action that would compromise the security or viability of this Website. The Company may terminate User’s access to this Website at any time for any reason. The terms hereunder regarding Accuracy of Information and Third Party Rights shall survive termination.

Website Content and Copyright

This Website is the property of Counterpoint and is protected by international copyright law and conventions. We grant users the right to access and use the Website, so long as such use is for internal information purposes, and User does not alter, copy, disseminate, redistribute or republish any content or feature of this Website. User acknowledges that access to and use of this Website is subject to these TERMS OF USE and any expanded access or use must be approved in writing by the Company.
– Passwords are for user’s individual use
– Passwords may not be shared with others
– Users may not store documents in shared folders.
– Users may not redistribute documents to non-users unless otherwise stated in their contract terms.

Changes or Updates to the Website

The Company reserves the right to change, update or discontinue any aspect of this Website at any time without notice. Your continued use of the Website after any such change constitutes your agreement to these TERMS OF USE, as modified.
Accuracy of Information: While the information contained on this Website has been obtained from sources believed to be reliable, We disclaims all warranties as to the accuracy, completeness or adequacy of such information. User assumes sole responsibility for the use it makes of this Website to achieve his/her intended results.

Third Party Links: This Website may contain links to other third party websites, which are provided as additional resources for the convenience of Users. We do not endorse, sponsor or accept any responsibility for these third party websites, User agrees to direct any concerns relating to these third party websites to the relevant website administrator.

Cookies and Tracking

We may monitor how you use our Web sites. It is used solely for purposes of enabling us to provide you with a personalized Web site experience.
This data may also be used in the aggregate, to identify appropriate product offerings and subscription plans.
Cookies may be set in order to identify you and determine your access privileges. Cookies are simply identifiers. You have the ability to delete cookie files from your hard disk drive.