What is it?
Nokia’s latest smartphone comes with a difference – users can repair their own handsets with no DIY experience necessary.
Using tools and a repair guide from iFixit, a user can remove the back of the phone to access, easily take out and replace broken components. They can fix the battery, the screen, and the charging port.
The aim of the phone, the G22, which costs £149.99, is to make it easier for the user to repair, creating a longer-lasting device while at the same time reducing waste and being better for the planet.
Nokia claims that the repairs should take just five minutes, and the replacement battery comes in at £22.99, a screen costs £44.99, and a charging port £18.99. This seems very reasonable given that the average cost of an official manufacturer repair to a smartphone screen is £170 and batteries around £43.
The motivation could be two-pronged. Firstly, lawmakers in the European Parliament are driving for legislation that could force manufacturers to give users the right to repair. This comes as the European Commission’s Green Deal aims to turn the region into a so-called circular economy by 2050 rather than the current day take-make-waste model. This will target how products are designed, encourage sustainable consumption, and aims to ensure waste is prevented.
Secondly, the high cost of replacing parts on smartphones made by Apple and Samsung has irked customers who are keen for their handsets to last. Customers are demanding more sustainable, longer-lasting devices at more economical prices, particularly as the cost-of-living crisis drags on. Affordability is an increasingly important factor within the mobile market.
Nokia is not the first to take this initiative. Instead, the firm follows sector peers Samsung and Google, which also partnered with iFixit to make their devices more affordable to fix. Apple also launched a self-service repair, which is now available in eight European countries. They provide repair manuals and genuine Apple parts as part of the drive to provide long-lasting products.
Will it work?
Demand appears to be growing for the right to repair and adopt a more sustainable approach to handsets which, until recently, were seen as having a relatively short shelf life.
According to market research firm CCS Insight, end-user research shows that around half of mobile phone users would like to repair a handset at a reasonable price if they break it outside of the warranty period.
Furthermore, the self-repair programme aims to be simpler than Apple’s initial effort, which was criticised for leaving the owner with too many hoops to jump through to fix the phone successfully.
Risks revenue loss?
By providing users the ability to fix phones quickly and cheaply, the need to buy new phones declines. This could quickly result in lower production levels and a loss in revenue. The built-to-fail designs were predicted on people buying more and more often. Replacing parts works out to be around 30% cheaper.
Nokia would need the G22 phone to appeal to a wider target audience in order to offset this.
Nokia was once the biggest phone maker in the world, selling two phones in every five before Apple and Samsung’s sets took over. This new initiative is unlikely to propel the phone back to its previous status.
However, in light of the changing climate toward sustainability, as the EU moves towards its greener goals, this move lays down the gauntlet within the industry.
The latest developments come as Nokia rebrands itself as a business technology company. Nokia has strategically re-positioned towards selling equipment to telecom companies. Major technology firms have been partnering with telecom equipment providers, such as Nokia, to sell private 5G networks.
According to the Wall Street Journal, of the 312 analysts covering Nokia Corp (ADR) 18 gave it a buy rating, 4 an overweight rating, and 9 suggest a hold. No analysts gave it an underweight or sell rating.
The analysts set an average price target of $6.38 for Nokia, which equates to a 37% upside from the price at the time of writing. The highest price target was $8.47, and the lowest was $4.99.
Where next for Nokia (US)?
The Nokia share price has been training within a symmetrical triangle, forming a series of lower highs and higher lows. The price has recently broken out of the triangle to the downside, which, combined with the RSI slipping below 50 keeps sellers hopeful of further downside.
Sellers could look for a fall below 4.55, the February low, and 4.50, the 2023 low, to open the door to 4.20, the November low, and 4.05, the 2022 low.
On the flip side, a rise back above 4.73 at the 200 sma, and 4.77, the late February high, opens the door to 4.96, the falling trendline resistance.
Nokia weekly technical chart
Source: TradingView / FlowBank