ESPOO, FInland – Yesterday, Nokia announced plans of building a new manufacturing site near Hanoi in northern Vietnam. It’s planned to open in early 2012, following an initial investment of €200mn. The new factory joins ten existing sites across the world, increasing Nokia’s ability to supply the next billion mobile users.
Nokia considered many areas of the world when looking for a place for its new plant. Vietnam was chosen based on a number of criteria: availability of workforce and good logistical location for covering the growth markets are two examples of these.
Who is this next billion? Well actually, it’s more like three billion. Of the world’s population of 6.9bn people, over 90 per cent already live in an area with a mobile signal. Yet there are 3.2bn people who have never owned a mobile phone. The most notable opportunities here lie within the so-called BRIICA markets (Brazil, Russia, India, Indonesia, China and Africa) and their neighbours. Nokia’s “next billion” strategy is about putting mobile devices into the hands of the first chunk of those users – before moving on to the next, of course.
And the opportunity doesn’t just end with a device and a GSM signal. These new users are most likely to get their first experience of the Internet using a mobile phone and their first “computer applications” will be phone apps. Esko Aho, Nokia’s EVP for Corporate Relations and Responsibility said: “Only about 30 percent of the world’s population is currently online, and we believe we can play a major role in connecting the next billion not just to their first phone but to their first internet and application experience.”
Across the blogosphere, the news has been given a good response. Nokia Phones notes that it’s important that Nokia pays so much attention to mobile users outside the rich elite. MyNokiaBlog says that the company’s massive production capabilities are one of its key strengths. The FT’s ‘beyondbrics’ blog focuses on the extent to which the new factory will help strengthen Vietnam’s economy and notes the country has a sizeable Nokia user-base.