When Pekka Rantala looks out the window from his office at HMD Global’s headquarters in Espoo, Finland, he sees a big, yellow brick building. It was there, in the early 90’s, that he started his telecom career as an export manager for a small team in the Nokia Mobile Phones division.
Rantala’s job at the time was to travel country to country in Africa, and some parts of Europe, with a suitcase filled with marketing materials and phones, to sell Nokia’s devices to trade customers. Now, he’s the executive vice president and chief marketing officer of HMD Global, a two-year-old startup that designs and builds smartphones under the Nokia brand name.
HMD was created out of the ashes of Nokia’s phone business, which had once dominated the industry. Although HMD is a young and independent company, it is still very much tied to the “old” Nokia, in both product and people — like Rantala. You could say Rantala has come full circle, but he’d say he’s still somewhere in between.
“This journey is so different compared to my 17 years at Nokia in earlier times that I don’t have any déjà vu feeling that I have seen this before, I have done this before,” Rantala told Digital Trends in a phone interview.
Since the company’s founding, HMD has catapulted to become a top smartphone manufacturer and, in the process, resurrected the Nokia name in phones. But in a business that leaves no room for new players, can HMD crack into the U.S. market while continuing its rise to the top? HMD believes it can.
HMD, Home of Nokia Phones
Nokia was a household name for cell phones. By 2007 it had a whopping 50-percent market share. But 2007 was also the year Apple debuted the iPhone. Nokia, like other major phone makers at the time, underestimated its importance. As Apple, Samsung, and other Android-based smartphone makers rose, Nokia’s share fell; by 2013, Nokia had around 3 percent market share.
It countered with its own smartphones, except they didn’t run Android, but Microsoft’s Windows Mobile platform instead. It has been reported that Nokia’s then CEO, Stephen Elop, said Windows Mobile provided the resources Nokia needed, and that Nokia would have been at a disadvantage being an Android newcomer to a field dominated by Samsung at the time (not to mention Microsoft was Elop’s former employer, which many speculated as one major reason for the decision to go with Windows). The Windows Mobile devices, however, failed to gain traction. Eventually, Nokia sold its phone division to Microsoft in 2013, which had hoped to make inroads in the smartphone race that revolved around iOS and Android.
But after the acquisition, Microsoft would abandon the Nokia name, which effectively ended Nokia’s presence in consumer phones. Ultimately, Microsoft would pull out of selling phones entirely, laying off thousands of employees — many of whom came over from Nokia.
“I don’t know too many companies in the, you know, world history of economics where someone would have been able to really lead a certain industry over multiple decades,” Rantala said, on the matter of Nokia’s fall.
As Microsoft exited the market in 2016, two companies — FIH Mobile (a Foxconn subsidiary) and a newly-formed HMD Global — acquired select former Nokia assets from Microsoft. At the same time, HMD signed a partnership agreement with the Nokia Corporation to build smartphones with a license to use the Nokia brand name, and it received access to “essential patent licenses” as well.
In return, the Nokia Corporation collects royalty payments. Nokia Technologies, a division of Nokia Corporation, also gets to sit on HMD’s board of directors to ensure the new company adheres to brand values so the products “exemplify consumer expectations of Nokia devices, including quality, design, and consumer-focused innovation.”
“In addition to Nokia being the first phone for many people, it really emotionally meant so much for the people.”
In other words, phones built by HMD Global need to hit certain standards set by Nokia Technologies to use the Nokia brand, resulting in a closer relationship.
“This partnership with Nokia is also very much based on very strong mutual trust on each other and that has been really great,” Rantala said. “We have been getting so strong support from Nokia Corporation in everything we do.”
That’s likely because many of the founding members of HMD Global are ex-Nokia employees. Chief Product Officer Juho Sarvikas started working at Nokia back in 2006; Pia Kantola, vice president of Customer Experience, spent nearly 15 years at Nokia. Both went on work at Microsoft after it acquired Nokia’s mobile business. Plenty of other employees have spent some time at Nokia; Rantala himself was HMD’s third hire.
As Digital Trends spoke to various HMD employees for this story, passion is a word we repeatedly heard, and it’s all directed toward efforts to restore the Nokia brand. Cristian Capelli is the head of Business Development in the Americas, and he too spent more than 13 years at Nokia. In a phone interview, Capelli said the people working at HMD Global are moved by passion, and that for many, the work feels like a second chapter in Nokia’s history.
“This is personal for most of us,” Capelli said. “We really want to see Nokia where it belongs. The way we do products, really starting with the consumers — it just makes sense.”
There are ups and downs on a journey, and Rantala said HMD Global’s past two years are an exciting “comeback” to the market. But why put Nokia on a pedestal, instead of building the HMD brand, or something new? Rantala believes it’s because the power of the Nokia brand still carries enormous weight.
“In addition to Nokia being the first phone for many people, it really emotionally meant so much for the people,” Rantala said. “The phone probably was present in so many unforgettable moments … it really became a brand. It is a brand which I think everyone either likes or loves or feels neutral … I haven’t met a person who has hated the brand.”
Quality, trust, and reliability are what Rantala believes people associate with Nokia. It’s one of the reasons why Rantala said he stayed to work at Nokia for so long, and why he said he “did not hesitate too much” when he started talks about joining HMD.
But while what Nokia stands for is clear, there’s isn’t much attached to HMD. If you ask Rantala what the three letters stand for, he’ll chuckle and say he had the same question when he joined. HMD really wants to draw attention to Nokia instead, because it’s what people love. After all, it is a 154-year brand.
“We haven’t built too much meaning to the word, or the name of HMD,” Rantala said. “It does not stand for things like Helsinki Mobile Dream. We say that we are HMD, the home of Nokia phones. Then they tell us that, ‘Hang on a second, how does HMD relate to home of Nokia phones?’ It doesn’t rhyme, and it doesn’t matter. We are the home of Nokia phones, and the name of our company is HMD.”
Success, thanks to partnerships
HMD Global operates through several key partnerships, which Rantala called the “partnership model.” Alongside partnering with Nokia Corporation, HMD is, of course, deeply linked with FIH Mobile Limited to manufacture the Nokia-branded products (the Foxconn subsidiary also builds Apple’s iPhones in China). This enabled HMD to deliver its products at scale relatively quickly. HMD has sold more than 70 million devices over the past two years, according to Rantala, and that has catapulted it to become one of the top 10 smartphone manufacturers in the world, based on 2018 data from Counterpoint Research.
Another crucial partner that is helping HMD provide an excellent software experience for its customers is Google. The relationship started when HMD decided to use Android as the operating system installed on Nokia phones. “It was an easy decision,” Rantala said, as was the idea to forgo creating a custom skin like Samsung’s TouchWiz skin over Android (now called Samsung Experience), and using just stock Android.
Android has matured greatly, and there’s not much of a reason to waste resources creating a custom skin.
“We concluded there’s no reason for us to almost artificially create our own skin,” Rantala added. ”So we had taken a very pure approach to Android. Android exactly as Google intended. And we want to endorse the Google services as Google intended. It is very easy to provide the operating system update very fast for the consumers and because we don’t have this software on top of Android, we can also commit to monthly security updates.”
Manufacturer skins or themes can slow down the Android OS, as can bloatware. The need to create these stemmed from Android’s early days, when it lacked features and apps. The skins helped create one of Android’s biggest flaws: Fragmentation. Adding extra layers over stock Android meant a delay in pushing out major updates, as manufacturers had to make sure every part of the operating system still worked in one piece.
But Android has matured greatly, and there’s not much of a reason to waste resources creating a custom skin. HMD built its first handsets with stock Android, and eventually partnered with Google to make nearly all Nokia smartphones under the Android One program. Android One doesn’t include any bloatware from the manufacturer. It brings a promise of fast Android updates for two years, as well as a commitment to three years of monthly security updates.
Jon Gold, director of Android One Partnerships at Google, told Digital Trends in an email there are other requirements too. There can be no more than a limited number of adjustments to the user interface, and all preloaded apps are approved by Google. Gold said Google has turned down partners who have not been able to commit to these promises, but it didn’t have to worry with HMD.
“We are promoting standardization of the software and a commitment to security and updatability.”
“From our earliest meetings with the HMD leadership team, we were struck by how much our companies connected on a shared product philosophy, and it’s this alignment between Google and Nokia that brought us together with Android One,” Gold said.
But Android One devices from different manufacturers can tend to blend together, as they offer almost the same software experiences regardless of manufacturer. Both Gold and Rantala believe there’s a way to stand out.
“There is still a lot to differentiate on with respect to hardware specs, brand affinity, price, industrial design, bundles, accessories, and channel availability,” Gold said. “We are promoting standardization of the software and a commitment to security and updatability.”
And by offering Android One on almost all its devices, HMD stands out from the crowd. Most major manufacturers have dabbled in an Android One device or two, but hardly any have committed to putting almost their entire lineup of smartphones under the program. HMD’s devices were some of the first — especially in the mid-range and budget category — to receive the latest Android version, well before the likes of Samsung and LG. Rantala said HMD’s customers — especially young millennials — understand the importance of “pure, secure, and up-to-date Android.”
“They really appreciate the fact that we are providing monthly security updates across our entire range of Nokia Android smartphones,” Rantala said. “And this is really something that consumers are giving us high scores. We are so happy about it.”
Customers — especially young millennials — understand the importance of “pure, secure, and up-to-date Android.”
Sadly, HMD has not brought the Android One program to phones it’s selling in the U.S. through carriers. It said it would work with carriers to bring fast updates, but it’s unclear if the pace would be as fast as we’ve seen with its Android One Nokia phones.
Regardless, software alone won’t win people over. Smartphone cameras have improved dramatically since Nokia left the market, and Rantala believes there’s plenty more to be done. Nokia’s partnership with Zeiss, a German company established in 1846 known for its precision optics, resulted in pre-HMD Nokia phones using Zeiss optics in the camera. It was Rantala who started the original venture back in 2004 for the Nokia N-series devices, which went on to produce some of the best phone cameras at the time, from the Nokia 808 PureView to the Nokia Lumia 1020. When he joined HMD, one of the first calls Rantala made was to his friend at Zeiss, to reignite the partnership.
“It was an immediate excitement on both sides that we absolutely need to restart the collaboration, that’s that’s what we did,” Rantala said. “We announced more than a year ago that we are again innovating together for consumers, and we have brought a lot of Nokia Android higher-end smartphones with Carl Zeiss imaging capabilities. We are looking forward to do more and also innovate in that space.”
In our reviews, we’ve been impressed with the quality of HMD’s cameras on phones such as the Nokia 7.1, considering it costs just $350. However, we’ve yet to see anything game-changing in such a crowded field.
Rantala believes the partnership and collaboration model is the “right way to approach the market.” It has helped the company establish its business in more than 100 countries in the world in less than two years, and Rantala said it has also delivered the most satisfied customers in the history of Nokia-branded mobile phones — they are the “happiest Nokia customers so far.”
Phones that have more than meets the eye
Raun Forsyth, head designer at HMD Global, is a veteran of Nokia and the industry itself. He joined Nokia around 2005, because it appeared the brand was having fun — evident in the forward-thinking (and sometimes puzzling) designs Nokia showcased around this time.
Forsyth was with HMD Global from the beginning, working on a makeshift desk — which he built himself — in an empty office, almost in secret when the company was still in stealth mode. He hasn’t lost that enthusiasm for injecting fun, soul, and character into his creations.
“You’ve got to love a device,” Forsyth told Digital Trends in HMD’s London office. “It’s with you 24/7, so there has to be something about it. When we talk about fun, it’s not something on the surface. You have to look for it. A little detail that says, ‘Wow, these guys really thought about this.’”
But how do you inject soul and character into a piece of technology?
“It’s the bit I worry about the most,” Forsyth continued. “It’s the bit the consumer sees, feels, and interacts with. But it’s only 10 percent of our time, and it’s the hardest bit.”
Even if a design is agreed upon by designers, there’s often a lot of work to get everyone else on the same page.
Forsyth talks about a barometer for measuring the success of a design, saying that in a meeting if someone makes a “hmm” sound when discussing a new device, he knows there are still several hours to go, because it means that person has reservations about the phone. Even if a design is agreed upon by designers, there’s often a lot of work to get everyone else on the same page.
The perfect example of how this works and comes together, is the birth of the reimagined Nokia 3310. This tiny, simple device stole the hearts of attendees at Mobile World Congress in 2017, but the project actually started life in 2009. It took almost 10 years for the right time for launch to arrive, and Forsyth — along with co-head of design Alasdair McPhail — “fought for the 3310” as they knew the phone would sell itself. The team wanted to embrace fun and nostalgia.
When an original 3310 is disassembled, Forsyth said you’ll find some internal components arranged in a way that they create a smiley face. This sense of fun continues: The new 3310 has been known to instantly change serious executives in meeting rooms into grinning tech-fans, as they all remember a phone they loved from before, Forsyth recalled. He described how the form factor for the new 3310 took about a month to get right. Sketches came before multiple models, and then as the final design took shape, a tiny alteration to the screen size made the final product “lovable.”
It’s hard to believe a small change — shaving off a millimeter — can have such a large impact on the way a device looks, but Forsyth said it’s actually obvious, even to the untrained eye.
“Everyone can see it, you don’t need to be a designer,” Forsyth said of the old and new phones, when placed side by side. “That is special, versus this that isn’t.”
While this may be true, it’s getting to that point that takes talent. HMD Global sees the value in its experienced design team, and Forsyth is deeply involved in the process of making all its phones, including building the product roadmap and technology selection.
The new 3310 has been known to instantly change serious executives in meeting rooms into grinning tech-fans.
“It helps us understand business reasons for doing something, such as selecting certain colors for certain regions, and this makes a difference when we design a product,” Forsyth said.
Working closely with all departments is similarly key. Quite often there is a back and forth between the engineers and designers, ultimately ending up with a compromise solution that draws on individual expertise, a shared understanding, and the long-term experience of both teams. A great example is the Nokia 7.1’s screen. Again, you won’t immediately notice a striking difference between it and most other devices, but it’s rather special.
Forsyth began sketching on a whiteboard and said his team went to great lengths to get the Nokia 7.1 to where it is today.
The screen “defies many standard design and engineering principles,” Forsyth said while drawing, and proudly continued that the phone still meets all the important internal drop tests for devices. Look closely and you’ll see the Gorilla Glass appears to meet the metal body, which usually means the phone will smash in the event of a fall, as there’s no shock absorption. Many manufacturers use a half-millimeter bead of plastic to keep them apart, and this gasket helps absorb the shock. This is the safe option, but you can feel it under your finger, and see it when you look for it. It’s not there on the Nokia 7.1.
The team’s solution is all down to the glue that’s used. On the Nokia 7.1, a thicker, floating foam gasket has been used that’s invisible to the eye and touch, yet returns incredible results in drop tests. The design team had to understand what the engineers thought the problem was — glass meeting metal equals a smashed phone. The groups talked it through, and jointly came up with a solution.
“I don’t want to worry about the phone when I drop it, […] it’s part of Nokia’s heritage.”
It’s a similar story for the placement of the camera lenses. These are top-center on the back of all HMD Global Nokia phones, and it’s not purely for aesthetic reasons. It’s about disguising the camera bump that’s necessary today in the curvature of the phone. Engineers prefer the lenses off to the side, which maximizes board space at the top of the device. But Forsyth has pushed for the center placement, as it had been done in pre-HMD Nokia smartphones. “They haven’t found a situation where it couldn’t be done,” Forsyth said, suggesting there’s no reason why a camera needs to be in a corner from a engineering standpoint. This harmony has resulted in some stunning, modern phones, from the Nokia 7.1 to the Nokia 8 Sirocco.
How about the future? “We’ve got these juicy concepts cooking,” Forsyth teased, before elaborating slightly by saying, “I don’t want to worry about the phone when I drop it. We have some concepts solving the problem, with still beautiful designs. It’s part of Nokia’s heritage.”
HMD wouldn’t share more about upcoming device plans, but there have been a steady stream of leaks about its next potential device, rumored to be called the Nokia 9 PureView. Leaks suggest it’s a flagship phone that will utilize Zeiss optics — and a partnership with camera company Light — for five cameras on the back of the phone alone. You can read more about the rumors that have spun out about the phone in our Nokia 9 PureView roundup.
2019: Growing in the U.S.
In two years, HMD has brought the Nokia brand back into public consciousness. Rantala is also especially happy to have Nokia back as one of the few major European smartphone brands people can choose.
But there’s a key market that hasn’t received much attention: The U.S. It’s still early days for HMD’s expansion here. The company sells a handful of devices like the Nokia 6.1 and the Nokia 7.1 through retailers such as Amazon, Best Buy, and Target. Rantala said HMD is here for the consumer first, not to challenge Samsung or Apple directly.
“The U.S. is one of the biggest smartphone markets in the world, and there are big boys out there — big players that we have high respect of, so we are on a journey,” he said. “We also want to be in the U.S., as one of the leading smartphone brands, and we know it will take some time before we get there. We really want to increase our business in the U.S. in  and we really feel quite confident that it will happen.”
“The U.S. is one of the biggest smartphone markets in the world, and there are big boys out there.”
Capelli agrees, and believes the U.S. is critical for HMD’s growth, specifically being sold through major carriers networks such as AT&T and Verizon. To that end, HMD has announced key partnerships with Rogers Wireless in Canada, as well as Cricket Wireless (owned and operated by AT&T), and Verizon in the U.S.. It’s bringing three existing phones — slightly tweaked from their international versions — to these carriers in its first major partnerships this side of the Atlantic. Most people in the U.S. buy smartphones through carriers, which is partly why HMD hasn’t brought a major flagship device over yet, as it knows it’s very hard to succeed “without a carrier partner.” With these new partners, that could change very soon.
This year is crucial for HMD’s expansion, but when asked if the company has considered expanding its product portfolio to other types of devices — such as wearables, or virtual reality and augmented reality devices — Rantala said HMD has “to focus on the mobile phone business.” (HMD’s activities are separate from Nokia Technologies’, which has delved into VR and other emerging tech, like the short-lived Ozo camera.)
“It really has been our focus point because we want to do it right, and it requires our full attention,” Rantala said. “Going forward, this is a thing that we can build business around. … In the coming years we really want to explore new things for the consumers.”
But for now, it’s all eyes on growth in the U.S., alongside ensuring HMD is catering to the needs of its youthful, target demographic. Rantala said two-thirds of people who bought a Nokia Android smartphone are under the age of 35, and the company is planning on staying “laser-focused” on younger generations so they become the “next generation of Nokia users.”
Updated on January 25, 2019: We’ve added details on HMD’s new carrier partnerships in North America.