HMD business performance, via FIH Mobile report 😉

Hi all, FIH Mobile have released their preliminary annual report for 2019 and inside it contains information about HMD's business. Why?

HMD business performance, via FIH Mobile report 😉

madbilly madbilly
✭✭✭✭  /  edited March 27

Hi all,

FIH Mobile have released their preliminary annual report for 2019 and inside it contains information about HMD's business. Why? Well, until May 2019 FIH Mobile were the sole ODM (original design manufacturer) of smartphones for HMD, and they remain the sole ODM for feature (non-touchscreen) phones. Since May 2019 HMD have sold phones made by a range of ODMs, not only FIH Mobile.

Also, FIH Mobile are one of HMD's major investors. When Microsoft sold the remains of Microsoft Mobile (which used to be Nokia's devices and services division, aka phones business) they sold most of it (~90%) to FIH Mobile, and the rest to HMD. HMD have the Nokia brand licence and part of their business model was to partner with FIH Mobile who would make the phones for HMD to sell. FIH Mobile investing in HMD was a key part of that partnership, and it remains a key investment for FIH Mobile even if they are no longer HMD's sole ODM.

So, what's new in this report? Well, actually not much. The date of May 2019 for HMD to changeover to the multi-ODM strategy is new I think. However, FIH Mobile continued to make all smartphones "until the end of their lifecycle", which means that they didn't just stop in May 2019. For example the 8.1 remained in production until later in 2019 and maybe other models did as well. The report states that by the end of 2019 almost all of HMD's smartphones were made by ODM's other than FIH Mobile - I think that the 9 PureView is the only smartphone still made by FIH Mobile, although all non-touchscreen phones are still made by FIH Mobile. It appears from the report that the only smartphones which HMD are still making are profitable, which means that - against the odds! - the 9PV is profitable for FIH Mobile (I presume for HMD as well, otherwise they wouldn't still try to see it, one year after its release). 😃

Apparently the change to multi-ODM has been successful for HMD and HMD were apparently profitable for the first time in the final quarter of 2019. However, HMD are currently going through a series B funding round (it means the third time they've had funding; second time is A and first time is "startup phase") which actually started almost a year ago, and HMD hope to have it secured before end of June this year. This is important as it strengthen's HMD's balance sheet and makes them more credit-worthy, meaning they can get better payment terms from their suppliers which gives them more flexibility. Unfortunately I suspect that the ongoing COVID-19 pandemic is causing some issues to both this investment round and HMD's cashflow and relationship with suppliers, so for HMD's sake let's hope that they sail through these rough waters without serious financial problems. 🤞

More relevant to us as consumers and followers of the journey of Nokia phones is that FIH Mobile report that they think that HMD's promise of always up-to-date software is unique.. however we know that it isn't as there are other Android One phones, so I think that they maybe just chose the wrong word 😉 Interestingly, they say that they think in future smartphone innovation will be less on hardware and more on software, which I am pleased to read however HMD appear to be interpreting this to mean that they should continue to focus on "pure" aka beige Android rather than providing new and unique software experiences, i.e. that Nokia feeling. Oddly, FIH Mobile think that consumers interested in privacy like the beige Android approach, but these must be the kind of consumers who think that giving all their data to Google is fine for their privacy... 😕

HMD is apparently doing very well with the enterprise market and they have done some significant deals. Enterprises apparently do like the beige Android approach, which I think is understandable and fine for them. But I hope that HMD could start to provide some consumer-focused software which is an optional installation alongside the Android One approach.

Finally, it's worth noting that the report says that although a large number of people may not yet want to upgrade to 5G phones because there is not enough network coverage yet, the report also says that some people may not buy a 4G phone because they're waiting for more capable 5G phones to become available! Now we understand the vendor mentality of pushing their 5G phones, they want to make sure that they have something that people will buy, even if the coverage isn't there yet. This makes the new 8.3 5G look quite attractive then, so long as it comes to market before competitors also release models with as wide a range of frequency support.

If you're interested check out the report yourself and tell us if you see anything else interesting and what you think of the above.

Cheers 🙂

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Comments

  • Kartik Gada Kartik Gada
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    HMD's performance improving is a good sign but they are slowly turning into an enterprise favourite brand only.

    An average consumer just doesn't care about Android One and HMD will have to change its strategy to become a consumer favourite.

  • singhnsk singhnsk
    ✭✭✭✭  /  edited March 27

    Thanks for this @madbilly. Honestly, I was expecting more than this from their report.

    • I do not think FIH were still making the Nokia 9 until recently. I do not even feel that it got enough reception. And I'm sure HMD never managed to sell their stock. I might be wrong and I wish I am!
    • HMD were profitable!!? I wonder how though. I do not see the Nokia 7.2/6.2 selling as well as the older generations (7 Plus, 6.1, 6.1 Plus). Bacing it over user engagements here (and over at XDA, Reddit etc). It could be so that HMD won some enterprise orders where they were ship some significant quantities. And that could be the reason behind Florian donating his entire speech in the hands of Enterprises.
    • So, that long running funding round is still not done. That's quite long for the fundraiser and can suggest that they weren't managing to secure enough which had them waiting (and launching new phones & securing enterprise agreements, which they can use as document to attract the investors). That appears assuring to some extent.
    • If HMD are successful now, then why were they not when working with FIH with its greater buying capacity and manufacturing capabilities. Why did both continued to lose money even with significantly higher sales? Could it be due to higher operating expenses or just the push for too much expansion in a very short span of time?

    I think this is here where the new things in the report finish. FIH said the same about software innovation in their last report. And similar about Android One. So, that appears to be a copy paste this year as well.

    For somebody who buys a phone for the next 3 years (or even longer), the choice of 5G should make sense. Because a year or two later, he will be able to enjoy the faster network without having to upgrade to a new phone. I remember how India had 3G phones since much earlier than when the 3G networks actually started becoming available in the country. I think I too will consider the 5G support when buying my next smartphone.

    Somehow I also feel that my next smartphone will not be a "Nokia". The 7.2 is giving me much of annoyance to overtake my satisfaction with the Nokia 7. I'm getting interested in a OnePlus again! 😈

    Yes boss, because there's nothing to care about that "Beige" experience. We should care only if it was "better" in some way. Companies are already happily delivering the essential security updates and that's enough for us as a consumer.

    As a company HMD should offer choices to the consumers. We give you this, this and this. Now you choose what you like. And yeah sure IF more number of users decide to go with Android One offering, then give them more choices. Just why completely ignoring the fact that some consumers don't want Android One too.

    I believe more than a marketing manager, they need a software and experiences designer whom should wake HMD's desires about how they can make their phones look better, feel special and become marketable without needing James Bond.

  • MdSadique MdSadique
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  • Kartik Gada Kartik Gada
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    Well that would be a very long list. 😅

    But all Nokia phones launched till Nokia 9 PureView were made by FIH. And also the Nokia X71. 🙂

  • singhnsk singhnsk
    ✭✭✭✭  /  edited March 28

    But maybe, just maybe HMD was involved a little bit in the designing part. Doubtful though. I'm not even sure if HMD literally contributed anything to the previous gen phones other than being the licensee of the Nokia logo.

  • gonsvq gonsvq
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    If they scored HMD well it must be that they don't own a Nokia phone with Android 10

  • madbilly madbilly
    ✭✭✭✭  /  edited March 30

    Hi @Ishrat Parween every HMD phone up to the end of 2018 was made by FIH Mobile and the 9 PureView and 1 plus in 2019, plus all non-touchscreen phones.

    I remember that Nokia Anew on telegram ran a series of tweets about which phones were actually designed by HMD and which were ODM (which could be FIH Mobile, etc) and if you believe Nokia Anew then some smartphones made by FIH Mobile were actually designed by HMD, but some definitely were designed by FIH Mobile.

    FIH Mobile may have stopped producing the 9 PureView (and 8.1, 1 plus and earlier models) but if HMD still have stock then they will still be on sale (or they were at the end of 2019, that's what the FIH Mobile report is about).

    The reference to Glastic in the report is interesting, but I have only seen Samsung phones refer to that in their marketing and it seems to be a material which is not the same as reinforced/tempered glass. It's odd that FIH Mobile refer to this then, but maybe they mean more generally the glass sandwich phones.

    Cheers 🙂

  • madbilly madbilly
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    Oh, oh dear. I just noticed something and it's making me worried and sad. 😧

    Look again at the launch video of the 8.3 (the full video, not just the promo vid) and see if you notice the same thing.

    Did you actually see the 8.3 5G? Did you? Did you really? 😮

    I don't think I did. I think I saw a lot of renders and a non-functioning design prototype model on the shelf behind Raun.

    I don't think the 8.3 5G is ready yet ☹

    Well, you might think this is obvious, but given we're talking business performance in this thread we need to consider what this means.

    So far, HMD have not announced a new smartphone which is not ready to be used. This is the first time they've announced any new models without any hands-on reviews from journalists. None at all, not even for the 5.3, 1.3 and 5310, which is actually even more worrying, considering that these phones should be on sale within a month.

    But why would HMD feel it necessary to announce phones which don't actually exist? Or at least, which can't be demonstrated in real life.

    Okay, we saw Konsta with the 5.3 but he counldn't find anything to take a macro photo of... do you believe that? I think it more likely that the macro function isn't working yet.

    Back to the 8.3, why would HMD announce it when it doesn't even exist yet. It hasn't even passed any certifications yet (at least, they haven't appeared publicly).

    I fear this is because HMD are desperate to finalise their investment round and therefore they must show something to potential investors to make them think there is a future product ready which will increase HMD's sales. To do this, HMD need to show something of interest to its main customers - not us consumers in the public, but the telcos and retailers who will stock the phones to sell to us. 5G is what will get these people interested, plus a fancy camera set up. The 8.3 5G specs provide that, and the nice design means that this is a model these people will want to show on their website.

    So, for all of us who still want our security updates to continue until the specified end-date, let's hope that HMD's gamble pays off and the 8.3 5G gets them sufficient interest that more investors come forward and HMD can get themselves on a sound financial footing. Otherwise, that will be the end of our security updates.

    Sorry, to put a negative note on this discussion, but this genuinely got me worried.

    Cheers, with optimism! 😃

  • Kartik Gada Kartik Gada
    ✭✭✭✭  /  edited March 31

    Nokia 5310 Unboxing video can be found on YouTube and Nokia 5.3 should be ready too as Miko Mahonen did give a sneakpeak of it in the BeeBom video. It should be the 5.3 because of the Sand colour.

    Nokia 8.3 is a mystery and with such silence on youtube I feel the same as you.

  • madbilly madbilly
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    The colour of the phone that Miika showed is so much brighter than the one which appears in the launch video, especially if you compare to the model behind Raun on the shelves. Do you really believe that's the same phone?

    Still, we saw Konsta with the 5.3 and I doubt he would compromise his integrity to post photos from a phone which he says exists but actually doesn't!

    Cheers 🙂

  • Kartik Gada Kartik Gada
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    Yes, I do believe it was the Nokia 5.3. To me the colour doesn't look so bright but it does have a glossy glow. We still have to see the 5.3 in real life so we can't say anything about how the colour actually is. Also, just after he talked about the future products and their design lab he showed the bottom back of the phone. Only the Nokia 1.3 and Nokia 5.3 come in that Sand colour (though both have different shades) and it matches the colour of Nokia 5.3 more.


  • singhnsk singhnsk
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    @madbilly They must have a prototype (working) or a final product (working) ready. If not, what is James Bond using in the movie? A 5.3? In the previous cases of FIH, we saw sooooo many prototypes which eventually came to the public.

    @hikari calyx Recently bought a Nokia 7.2 prototype. My question is... Can they even announce a new phone without having made at-least a few of them and testing the necessary things? Like come on! It isn't some kickstarter campaign which can work all based on a video.

    Let's for a second believe that they do not have a product ready. But...! What do you think were they gonna do at the MWC stage? Show nothing, again? And nothing again at their live demo stalls? Nah, it is a bit too hard to believe even if the facts suggest so.

    I think this time it is more about some poor video planning. Each of them just sat at different regions and shot the videos (speaking speaking). They thought including the product videos is enough to give an idea to the consumers. Whoever directed/approved/scripted the videos should just resign xD

    It is hard to imagine that a phone which Juho is teasing since December (Qualcomm event) is not a physical product. What did they show to the Qualcomm boss when he was speaking? Nothing again?

    My guess is that the tech media couldn't be delivered the products timely due to the lockdown. They generally start doing that at most a week before the official launch. HMD should have developed something on their own, bad that they didn't, but be positive. It can't be as bad as you guessed 😸

  • madbilly madbilly
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    The phone in that Bond trailer is a 5.3 I think.

    I remain to be convinced that Miika's phone is the 5.3, but since we have seen nothing else like it the 5.3 is the best candidate so far.

    We don't know for certain that HMD were going to announce the 8.3 at MWC, they may have only teased it. Still, you make a good point, I can believe that that wouldn't have done their reputation any good.

    But even Juho didn't have the 8.3 in the launch video, which means... 🤯

    The videos weren't that rushed. After all, they are somewhat scripted, with handovers between the different presenters. Still, you're right that they weren't very dynamic.

    I'm sure that they have a 765 5G technical prototype, and probably a 8.3 5G design prototype, and probably some early pre-production prototypes of the 8.3 5G body with the 765 5G internals. But all working together, nicely fitted together with functioning software? I'm not sure I believe they do... after all, there are no certifications public yet.

    I just want to see more evidence. Let's hope we see it soon 🤞

    Cheers 🙂

  • singhnsk singhnsk
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    @madbilly Only the 5.3 in entire movie? Zzz

  • madbilly madbilly
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    Well that's the only one in the 007 film tie-in advert which was shown at the end of the new phones launch video on 19th March.

    I'm sure there'll be other Nokia phones in the film though, otherwise it really will be an opportunity missed.

    Cheers 🙂

  • singhnsk singhnsk
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    Yeah so.. The movie must be ready since it only got delayed due to COVID-19 and that means they must have shot something? Or would that frame be just added afterwards? 😁

    Or.. by other you meant the older ones? :D

  • madbilly madbilly
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    You're right that they must have used something in the filming to date, but just because something appears in a film doesn't make it real.

    A vintage Nokia might make an appearance... clutched in the hand of a years old corpse, 007 finds it and... it rings! Battery not dead yet! 😉

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