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How European Phone Brands Are Making a Comeback

How European Phone Brands Are Making a Comeback

This video was sponsored by Skillshare. Ever since Nokia sold its phone business to Microsoft about 5 years ago, European companies have essentially disappeared from the smartphone industry. But in the 40th episode of the Story Behind
series, I’d like to argue that European companies are finally starting to make a come-back. Even if it is a pretty modest one for now. Europe used to be a front-runner in mobile
phones. Nokia at its peak sold over 450 million devices,
which is more than even Samsung sold at its peak, and many European tech giants like French
Alcatel, German Siemens and Swedish Ericsson, were serious mobile phone makers too. That was until Alcatel sold its handset business
to Chinese TCL in 2005, Siemens sold its mobile business to Taiwanese BenQ the same year,
Ericsson sold its stake in the Sony Ericsson joint venture to Japanese Sony in 2012 and
just one year later, Nokia too sold its phone business to American Microsoft. In just a few years, these titans of the mobile
phone world were gone from Europe, supplanted by more aggressive and nimble players from
the rest of the world. And with them, moved much of the expertise
in making and selling phones as well. US companies now control all major mobile
operating systems, while Asian companies have built unparalleled capabilities in designing
and especially manufacturing hardware. It’s a tough landscape for would-be European
companies when they can’t significantly impact software and can’t possibly innovate as rapidly
and as cheaply on hardware as their Asian competitors. But after a long period of drought, I think
there’s a couple of European companies who are starting to figure a way around this. I’ve actually interviewed 5 of the most interesting
companies and studied many of the others and realized that there are 3 distinct strategies European
companies have adopted. The first, and in my opinion least interesting
one is what I’ll call the regional champion strategy. French Wiko and Spanish BQ are the two companies
I talked to, but there is also Wileyfox from the UK and a few others. And, uh, French here is in quotation marks
for Wiko, as they were actually recently acquired by their Chinese manufacturing partner, but
let’s leave them in the conversation for now. So both of these companies make very standard,
affordable phones, but unlike others ,they focus on just a few markets. Hence why I call them regional champions. Not a complicated strategy, but it seems to
work, because both companies I’ve talked to sell phones in the millions, BQ is actually showing healthy
growth figures and both claim to be profitable, which is more than the mobile divisions of companies like Sony, LG and HTC can say about themselves. Their most expensive dvices cost 3 and 400
Euros respectively, and they both run stock Android for the most part, although BQ has
a few cool perks for geeks on top of that. BQ was the first phone maker to release an
Android One device in a developed market, they also had a Ubuntu phone as well as a
Cyanogen OS device and unlike most manufacturers, they are even quite speedy at publishing their
kernel source codes to GitHub. So all in all, pretty cool, the BQ Aquaris
X2 and X2 Pro review unit they gave me are definitely solid phones for the price, but
just like the Wiko phones, they also …, somehow just standard. The key strategic advantage these brands have
is that instead of having to build and maintain a global brand like Sony, LG and the others,
through expensive global marketing campaigns, sales channels and customer support systems,
regional champions concentrate their resources on a few markets, where they achieve a pretty
good position. Wiko claims to be number 2 in France, BQ is
number 3 in Spain and both have a somewhat dominant position in a few other European
markets too. It’s much cheaper to acquire a good mindshare
in just a few key markets, so they can undercut global brands like LG and Sony on price and
still make a profit. Now, this is a solid strategy against classic brands, like the ones we have already talked about, but I’m not sure how well it’s going to work against more aggressive players like Xiaomi for example. Just like India, where an aggressive tidal wave of Chinese companies have pretty much completely destroyed the regional champions of India, I’m afraid the same will happen to the European versions of these companies as well. Because they don’t have very strong brands, they don’t have very differentiated products, so the only thing they can fight on is price, and that, against Xiaomi will be, very difficult. Now, I wish them good luck, especially BQ, who apparently designs hardware, develops software, and even manufactures some of their hardware, such as their 3D printers in Spain. That’s a rare thing and I would hate to see
that go away. Okay. I’ll call type two the Niche Brand strategy
and it is a little more viable in my opinion. Fairphone and Blloc are probably the best
examples of this strategy and the trick here is that unlike regional champions, these companies
have a very unique niche product that has no direct competitors for now. Amsterdam-based Fairphone makes a phone that
is modular, easy to repair, and has as little negative impact on the environment and the
people in their supply chain as possible. You know, as many conflict free materials as
possible, no child labor, you get the point. Berlin based Blloc has pretty standard hardware,
but develops really unique software for it. I’ll have an exclusive in-depth video about
BllocOS once it gets a little more polished, so subscribe if you want to see that, but
in short, they have completely customized Android to make it as distraction-free and
as non-addictive as possible. I like the idea behind both of these companies,
they are unique and for now they don’t have very direct competitors. And a niche product is a high risk high return
strategy. It’s high risk, because nobody knows if sustainable
devices or distraction-free software is something people actually want and even if
it is, it’s unclear whether these companies can actually build the stuff that they have envisioned. BllocOS is a cool concept and the team has
made some great progress, but it’s still far from the universal solution that Blloc
envisions for the future. That is still years of hard work away and
success isn’t exactly guaranteed. In the same way, Fairphone has had unimpressive
sales results in the last few years because they just couldn’t produce phones fast enough
with their complicated manufacturing processes and supply chain. So these companies are highly risky. But of course the return is high also pretty high. Because they don’t have a lot of direct competitors for now, which means that the prices they can charge are also pretty high. Case in point, the latest Fairphone that has
specs straight out of 2014 costs 529 Euros, plus Fairphone also makes money from selling components. The price of the Blloc phone at 359 Euros
is much more reasonable, but still above what you’d pay for similar hardware from the likes
of BQ or Wiko. Doing something unique allows companies to
have decent margins. As I said, high risk, high return. So the regional champion and the niche brand
strategies both focused on a particular niche. Either on a regional one or on a product one. And none of these companies can go
fully mainstream, because just like other European smartphone makers as well,
they have very limited control over both the software and hardware hardware of their devices. But, there is one European company who has the chance to go fully mainstream, I think. The Nokia strategy is the third and last on
my list and believe it or not, it is unique to Nokia. The formula is actually quite simple. The Nokia brand name is so beloved and has
such a nostalgia factor that even if all the company behind it does is create solid phones and
sells them at reasonable prices, lots of consumers will want to buy them, the biggest retailers
will want to stock them, the richest investors will want to fund them, the smartest people
will want to become their employees, the biggest manufacturing partners will want to produce
their phones, and yes, lots of YouTubers like me will give them free publicity by talking
about them. The Nokia brand is still incredibly valuable. So HMD, the Finnish startup behind the brand’s
revival has a huge opportunity to turn Nokia into a mainstream global brand. The trick is that they need to get to a large
scale before the nostalgia and the “Oh, Nokia is back” factor wears off. And so far they have done very well. They have sold about 10 million phones in
their first year of existence, and it seems like they will do around twice as much next
year, they are already in the global top 10 and in Europe even in the top 5, comfortably
surpassing brands like Sony and HTC in most major markets. They have established themselves in Europe,
China, India and a few more key markets and they have a full portfolio of devices. All of that in a little more than a year. All they do for now is building solid phones
with Android One and selling them at a reasonable price, but it seems like the Nokia brand and
the very aggressive management team who knows that they have to expand as fast as possible
before the nostalgia factor wears off, is working very well for them so far. I think they will soon have to start investing
into differentiating their products, because even though I like their phones,
I use the 7 Plus on a daily basis, if they don’t have differentiated products, I doubt the growth will continue for very long. If HMD can innovate something meaningful
though, I think they have a chance at making Nokia a global household brand again, in just a couple of years. And as a European, I’d really like to see that. Inheriting something as valuable as the Nokia
brand name is like finding a cheat code in a video game. If you aren’t lucky enough to find your own
cheat code in life, then developing unique skills like Niche brands do is your best chance
to stand out from the crowd. And the easiest way to acquire your own new
skills is by going to Skillshare. They have over 20 000 classes in design, photography,
finance, marketing, and whatever you can think of and my favorite one lately is this course
on how to make animated YouTube videos from my friend Evan, who runs the very successful
Polymatter YouTube channel. It explains his process from the beginning
to the end, including researching, writing and animating and it’s so good that even I
learned a few tricks from it, even though he’s kind of explaining my job. So if you want to learn how to make animated videos,
or acquire any other skill, use the link in the description which gives you 2 months of
free premium access and really helps my channel out as well.

100 thoughts on “How European Phone Brands Are Making a Comeback”

  1. The last hope for european phone to beat all of those Chinese brand away and do something better innovation than any Chinese phone out there

  2. Its not just about nostalgia
    Nokia takes flagship things like a glass black and type c port into most of their phones that are probably worth around 150 dollars
    Also they have excellent build quality, stock android that are needed by many users


  4. my girlfriend and I both rocked a BQ phone.
    I still rock it for some purposes (mainly development on the Ubuntu Phone platform) but my gf doesn't rock it anymore (she dunked it so…)
    They where really solid devices that did what we expected of them.
    They weren't "great" devices by any means but they are great for people that don't care about "the best camera" or "the best screen" and just want something they can use WhatsApp on

  5. It’s very hard to differentiate the hardware these days because it’s the app that matters. I would buy the next one with too sieve and top cameras at a reasonable price to replace Apple.

  6. They truly are differentiating their products, as the only alternative to Pixel devices giving pure stock android experience and give updates (though not as quickly as pixel) to its consumers. I truly believe that Nokia can be the Apple of android environment in terms of their services.

  7. Nokia still suck. They have costly price compare to there specs, plus there hardware broke down easy. Simply learn from Xiomi.

  8. There also is German Shiftphone.
    The Idea being the same, but the product being more modern and up to task.

  9. Europeans can’t make cheaper phones , they eventually have to go to China to make them, like Apple.

    So I guess that is why nobody is making them – Europeans are lazy too !

  10. Honestly for a phone to be STANDARD in Europe is actually kinda well…..standard. Never known a European with a liking for a extravagant phone.

  11. Yet he completely fails to mention the one company making phones in Europe (Gigaset), but instead features Blloc, a company that hasn't even started selling phones yet

  12. you forget to mention Noa phone from Croatia,they have some pretty good phones

  13. Excuse me but why are we even try to name them European brands??? There is not much left that is not produced in China which effectively makes them not local brands. The local brand should be named something that is being produced using local manufacturing plants. Nokia used to be like this but not anymore as far as I understand. Europe as a tech industry or development IS LONG DEAD!!!! Every factory is already shut or will be in some future. Shame on EU to lead us to such crash!!! Just we wait for some conflict with China and you will see a result of killing own industry. This subject is in it's core ignorant to the bone – one big negative here!

  14. Not to forget smartphones developed and made in Germany by Gigaset:

  15. Watching from my Nokia 6.1 Plus. God i miss this level of quality on a phone. And yeah they're currently starting to make some impression here in Asia, still struggling but making progress.

  16. Within the next decade, there won't be a single dominant smartphone brand, but many that are equally successful, kind of like car or computer brands. Because the mainstream smartphone infrastructure is becoming more developed around the world, and with more patterns drawn everyone knows how to cope with smartphone innovation, unlike 10 years ago when people suddenly moved to all screen phones with standardized apps. I have a feeling even Blackberry will have a comeback.

  17. Every phone is good if its not owned , designed or made in CHINA .
    Please dont buy from China like RedMi .
    I have a awlard experiance myself.

  18. Lol european phones. They're crawling under so much under regulations i guess they'll aquire 5G technology by 2050

  19. Children have more knowledge in phone and computer than adults that may be child labour will be normal after few years and old people will have jobs as feeders nanny house keeping taxi driver etc as jobs I guess.
    This coz of some mention on child labour

  20. Nokia has something to differentiate other than their brand name. They're one of the few brands that create Android one phones, which makes me stick to Nokia.

  21. What's the point in making these videos if you come with outdatet information. 2013 ?. That is like 6 years ago. A lot have happened since then. Microsoft as you say own Nokia is not true. It's outdated bullshit.

    The brand name was sold to a new company called HMD, formed by former Nokia employees in Finland. Meanwhile, the manufacturing, distribution and sales arms of Nokia have been bought by iPhone manufacturer Foxconn, which has also agreed to build the new Nokia phone for HMD.18. maj 2016

    Name owned by HMD
    the manufacturing, distribution and sales owned by Foxcoon

  22. European phone manufacturers should concentrate on making mid range but straight forward handheld devices for enterprise/govt employees without any gimmick.

  23. It doesnt matter if Nokia is a Finnish brand, their phones are still made in China. The only European thing about the phone is the name.

  24. i too would love to see what more nokia had to offer, they have first make it to my heart. and would grateful to see nokia comeback and left behind their competitor

  25. My first smartphone is huawei after I used two feature phones Nokia and sumsung.

  26. What a lucky coincidence(?) for key Asian manufacturers to get hit by sanctions just now which impacts their support for Android.

  27. Let's hope Nokia doesn't innovate customers away. Maybe people like Android One, but want hardware more solid than the Pixel.

  28. I love eropean branded phones..somehow it would be better if they can build compact devices not more than 5in. Im longing to have those type of phones especially for someone who has tiny palm😅

  29. Spec and price are what people look for.If they can do the job,why not.I don't believe they can do it easily.

  30. Inbuilt application should be bane in phones, and android phone have almost 15+ in built Google app, which make difficult for local industry to come and compete in app making industry.

  31. I have a deep love for nokia.. But they launch their phones very late in india.. By the they launch..a share of Their market is taken away by some other phones…

  32. I am a Nokia user for a long time. The moment MS took over it rapidly became clear this wasn't a good deal. I am happy that the Nokia brand is back in business and having the 6.1 and 7.1, intensive using them, I can only say they are verry good phones bought at a reasonable prise. So I hope they Will continue the good work. 👌👌👌

  33. ill gladly throw my money at nokia than shitty flimsy chinese phones. Cmon Nokia saves us from the cancerous degeneracy that is xiao mi, oppo, huawei and other cheap knockoff garbage. You are our last bastion of hope.

    preferably one with removable battery.

  34. yes but nokia is shit… That use what windows os….. shit….
    I'd rather use nokia to break bricks….
    Sure they used to make great phones… But the smartphone market is not for nostalgia…

  35. well i think if does european smartphone want to re- exis, they should to open a factory outside europe, such as indonesia, where are so many people want to contribute

  36. The problem is Europe, particularly Germany and the Scandinavian countries have usually been hardware oriented. Why other nations are beating Europe is that they are better at software, in particular, OS software. No matter what people say Linux is still not user friendly. The only exception to this rule has really been the invention of MP3. So until European companies and institutions invest in the long process of OS and services development, which are usually high risk and take a long long time to develop then they wont succeed. They'll just remain an 'us too' product

  37. Nokia was pioneer in camera and build quality in their peak but today they are miles behind in camera, preview 9 is just like huawei p9 with some extra camera but slow. Build quality is great but need to work on design and need to go with good processor. When they came with nokia 8 with high end processor and stock android for so less than flagships, i thought they were back with bang but with Nokia 8.1 they went with mid range processor and that made me go with lg g7

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