• HMD Global is positioned to capitalize on Chinese smartphone vendors’ geopolitical woes.

  • The US’ Clean Networks initiative wouldn’t apply to HMD Global since it is a European company, so a market exodus of Chinese smartphone vendors could bolster the company’s plan to expand.

HMD Global announced the completion of a Series A2 funding round in which it raised $230 million from Google, Nokia, and Qualcomm, among others, earlier reported by TechCrunch.

HMD Global raised $230 million in a Series A2 funding round

Headquartered in Finland, HMD Global specializes in manufacturing budget Android smartphones under the Nokia brand. HMD’s wide-ranging device lineup includes $25 2G feature phones with T9 keyboards, $70 touch screen 4G smartphones running Android 10, and even a forthcoming mid-range 5G smartphone. The company has sold over 240 million smartphones across 91 markets since it began operating in 2016.

HMD Global’s new funding will help it capitalize on the geopolitical barriers plaguing Chinese smartphone vendors. Vendors like Xiaomi and Oppo — which together accounted for 19.2% of the smartphones shipped worldwide in Q2 2020, per Canalys — excel at selling cheap smartphones in developing markets. But last week, the US State Department unveiled its Clean Networks initiative that would attempt to prevent Chinese smartphone vendors from pre-installing or offering apps made by US companies.

This would essentially preclude Chinese smartphone vendors from selling devices outside of China, since their devices wouldn’t be able to run popular apps such as WhatsApp, Facebook, Instagram, YouTube, and Snapchat, to name just a few. The Clean Networks initiative wouldn’t apply to HMD Global since it is a European company, so a market exodus of Chinese smartphone vendors could bolster the company’s plan to expand across Africa, Brazil, and India.

Despite current US political ambitions to limit the global sales of Chinese smartphone vendors, however, the execution of the Clean Networks initiative will prove difficult. The State Department has yet to release details as to how the initiative will be implemented and enforced. This is important because the US government may have limited means of curtailing the practice of “sideloading,” whereby consumers gain access to apps through unauthorized workarounds.

Official enforcement of the plan is also unlikely to begin before November, which means that it may be predicated on President Trump winning reelection. These are shorter-term considerations, however — in the long term, tensions between China and the US, India, and Europe could still limit the market reach of Chinese smartphone vendors, creating an opportunity for HMD Global.

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source https://www.businessinsider.com/hmd-global-capitalize-on-chinese-smartphone-vendors-geopolitical-woes-2020-8