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Nokia's retro phone obsession isn't completely bananas

HMD Global is injecting the phone market with something it's sorely lacking: Fun. That’s helped win some new fans.

Andrew Hoyle/CNET

Read our full review of the Nokia 8 Sirocco, the latest Nokia phone from HMD Global. 

Remember when phones used to be fun? HMD Global, the startup making Nokia phones, sure does.

The company reminded us of the fun side of phones last year at the Mobile World Congress trade show, when it relaunched the 3310. It repeated the performance this year when it showed off a 2018 edition of the 8110, also known as both the "Matrix" phone and the banana phone.

For HMD, these retro gadgets make a statement about the brand -- that it's playful, youthful and retro in a good way, and that it doesn't take itself too seriously. Rival phone makers such as Honor that compete in the budget-to-midrange segment make token statements about this, but HMD actually speaks through its product.

That energy is useful if you're competing in the phone business and your name isn't Apple or Samsung. The field is littered with budget phone options, but Nokia has the edge of an established name -- even if that name has faded in relevance. Having a little fun is critical to getting those nostalgia juices flowing and attracting younger consumers who don't have fond memories of their first Nokia.

The flip side of the retro phone buzz is that it obscures other announcements -- something that happened last year at MWC. Nokia unveiled four other phones at this year's show, though you might not know it if you just skimmed the headlines.

"It's all good, I'm not worried," Juho Sarvikas, chief product officer, said in an interview Tuesday. People always get excited about anything at the top end of the market, like the flagship Nokia 8 Sirocco, he added. Similarly, he believes people will understand the significance of the ultra-affordable Nokia 1 (expected to cost around $85), because that segment of the market is both large and underserved.

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The rebooted Nokia 8110 is this 2018's version of the 3310.

Andrew Hoyle/CNET

"All of the devices should have their own character," he said. "It's not only about price and features but actually doing something totally unique and having a bit of fun while doing that."

The phone industry can take itself a little too seriously, and the difference between devices gets blurry sometimes, so people naturally perk up at the first sign of novelty.

"In a sea of smartphone sameness, it is little surprise that consumers get excited by a little bit of nostalgia," CCS Insight analyst Ben Wood said Sunday.

It's true that people are clamoring for something different from the classic black rectangle. Consider the excitement over Samsung's upcoming folding phone. For the past year, the phone rumor mill has been buzzing about when this new twist will see the light of day.

The 8110 is perhaps more unusual than it is innovative. But more importantly, it captures people's imaginations in a way that's good for Nokia's image. "The 3310 was a huge success last year and helped return the Nokia brand to consumers' consciousness in a spectacular manner," said Wood.

HMD probably can't ride this retro wave forever, but once it establishes a new fan base, it won't need to, and it's already working on that. Two-thirds of the phones it sold last year were bought by people under 35, said the company's CEO, Florian Seiche, at Sunday's press conference. It's a group unlikely to be buying out of brand nostalgia.

The numbers tell only part of the story. IHS Markit analyst Wayne Lam estimates that HMD sold fewer than 6 million Nokia phones in the past year. While it doesn't compare to the 77 million iPhones Apple sold in the last quarter, it marks a strong start for a company essentially beginning from scratch.

HMD has a big mountain to climb before it reaches its goal of being a top-five phone maker globally, but at least it seems to be enjoying the journey -- even if it goes bananas at times.

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