Friday, 16 August 2019

FIH Interim report | TNS discontinued, HMD building its own supply chain and other business expansion decisions taken


FIH Mobile released its Interim report for the first half of the year ending on June 2019. The report consists of Financial statement, the company's performance and their investments like making Nokia Branded Mobile phones. The report includes new information about HMD Global and what happened to TNS.

Following is the information and key highlights published in the Interim report:


  • TNS which looked after logistics and distribution of Nokia mobiles has been discontinued and HMD Global has been building its supply chain themselves at their own expenses
  • HMD Global has expanded its workforce in Finland, India and China to help them manage the after-sales and distribution in a more efficient manner and also serve the end consumers directly.
  • A new multi ODM approach has been adopted for manufacturing new devices which help in bringing new products to the market much faster and will also allow HMD Global to get a better purchase price advantage due to competition
  • HMD Global's main focus will be to offer phones with great durability, design, quality and long battery life which people expect from Nokia phones.
  • HMD Global will bring smarter feature phones to the market and FIH will be solely responsible for making Nokia branded feature phones.
  • With a better supply chain, HMD Global has predicted growth in the second half of 2019
  • HMD Global has started Series B Funding round in the first half of 2019. The main purpose of Series B round is to collect funding to deliver a growth plan and strengthen the balance sheet.
HMD Global has been building the business by taking necessary actions. This has impacted its performance in the short term but will be helpful for the future. The new supply chain is also said to be successful and HMD Global has already shipped the first three devices (Nokia 2.2, 3.2, 4.2) built by two different ODM's (Huaqin and Wingtech).

Here's a snippet from the report about what HMD feels consumers want and how they are achieving it and just below it is my opinion.

"HMD is optimistic that consumers are looking for options for Android phones which are not offering same level of security, software updates and upgrades. Mobile market has drifted towards fast paced and quick transition road mapping making new phone to feel old after short while. At the same time products are more and more differentiated on software than hardware. New innovations in the industry will be more software led. HMD’s promise of always up-to-date Android is unique. It enables HMD to define products where Android services are flawlessly integrated into hardware experience. Good example of that is dedicated hardware key for Google Assistant in 2019 portfolio — aimed at offering a unique user experience to Nokia phone fans."

I personally have a different opinion about this. Yes, there are users who want an Android One device due to its stock nature and regular updates. But there are many who switch from a device with custom UI and then realise how much does Android One lack in terms of features. New innovations in the industry are software-led but Android One is definitely not the one which is innovative in terms of software features and experiences. I would like Nokia devices to come with better software experience and not just completely rely on Google and their Android One due to its limiting nature. There could be a separate series for Android One devices. The hardware Google Assistant key could have been even more useful if it could be remapped.

As per the report FIH has previously invested USD$64.5 million in HMD and owns 10.10% share. HMD started Series B Funding round during the first half of 2019 and FIH's finance team will closely monitor cash position and credit status of HMD Global. With a better supply chain, HMD Global has predicted growth in both smartphone and feature phones in the 2nd half of 2019. 

HMD Global will soon launch more devices next month and the new supply chain and multi ODM approach should help them bring new products faster to different markets. 

You can download the full Interim Report from here and jump to page 34 and 35 for information about HMD Global.

Thanks to madbilly for sharing the report on Nokia community forum :)

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