HMD brings DoT’s Sanchar Saathi app, Sarvam AI to smartphones; focuses on India-first strategy: CEO Ravi Kunwar

HMD, the Finnish mobile phone maker carrying forward the legacy of Nokia phones, is sharpening its India strategy by combining affordability, artificial intelligence, and digital safety features in the mass-market smartphone segment.

HMD India, the exclusive licensee and maker of Nokia-branded phones in the country, has become the first smartphone brand to integrate the Department of Telecommunications’ Sanchar Saathi platform and homegrown Sarvam AI capabilities into its latest Vibe2 5G smartphone.

Speaking to Fortune India on the sidelines of the launch in Delhi, Ravi Kunwar, Vice President and CEO, India and APAC at HMD, said the company aims to make AI, regional language access, and digital security available to consumers in the highly competitive sub-₹10,000 smartphone category.

“What makes this phone unique is that, for the first time, you have a local sovereign AI integrated directly into the smartphone,” Kunwar said.

“The biggest advantage is that consumers can interact with the AI in 22 Indian languages. It understands local dialects and even English, and the responses are adaptive in nature,” he added.

Highlighting the difference from existing AI assistants, Kunwar said most AI models today largely operate in English, whereas HMD’s integration allows users to communicate naturally in their own languages.

The company has also integrated DoT’s Sanchar Saathi initiative into the smartphone to strengthen digital safety and privacy.

“Apart from AI, the device is also focused on digital safety and security. We believe data privacy and digital security are becoming extremely important for consumers,” Kunwar told Fortune India.

HMD on May 20 launched the Vibe2 5G smartphone with Android 16, targeting the sub-₹10,000 segment. The device will be available in two variants - 4GB+64GB and 4GB+128GB - at a starting launch price of ₹9,499. Sales begin on May 26 on Flipkart.

India remains a core market in HMD’s global strategy

Kunwar said HMD will continue expanding Nokia- and HMD-branded devices in India as it strengthens its presence across both feature phone and smartphone markets.

“We started our India journey with Nokia, which continues to be an iconic brand. At the same time, we are building the HMD-branded smartphone portfolio,” he said.

According to IDC Q1 data cited by Kunwar, Nokia and HMD together account for over 45% value share and around 32.5% volume share in India’s feature phone market. HMD-branded devices alone contribute nearly 18% market share.

Kunwar said India’s feature phone market, which had declined following smartphone adoption, has stabilised over the past few years.

“India still has more than 220 million 2G subscribers, which means there is still a very large consumer base for feature phones,” he said.

Innovations such as UPI payments, scan-and-pay capabilities, and entertainment features are helping revive the category, he added. Kunwar also pointed to the growing “digital detox” trend, with consumers increasingly preferring simpler devices to reduce screen time.

AI memory crunch, West Asia crisis raise industry costs

Kunwar said smartphone makers continue to face pricing and supply-chain pressure due to rising memory costs, growing AI infrastructure demand, and geopolitical tensions in West Asia. “A large amount of memory supply has moved towards AI infrastructure and data centres, creating shortages for device manufacturers,” he said.

According to him, the supply-side challenge could persist because increasing semiconductor and memory capacity is a long-term process.

He further said that the West Asia crisis has further increased industry-wide costs through higher fuel, logistics, plastic, and component prices. “Price increases across the smartphone industry are real. Depending on the brand and category, hikes could range from 10% to 30% in some cases,” Kunwar said.

He added that HMD has already recalibrated pricing strategies to account for rising costs and expects periodic adjustments depending on the cost environment.