Subba’s Serendipitous moments

September 30, 2009

Nokia’s decline — indicative of a bigger upheaval?

Just as Apple announced stellar results, Nokia the leading player is showing signs of decline. It has the company of another marquee player in Sony Ericcson. I already described the impact that Apple and RIM are having on other players here. The latest market data just reinforces the view.

europeanhandsetsales.gif

The Western Europe market in Nokia’s backyard and hence the trends here are important. The reason for the significant drop is Nokia doesn’t have the zing of the iPhone or the Blackberry and doesn’t have a great smartphone yet.

Now while the overall market has declined by 6% the smartphone sales were up 25% and about 1.7 millions were shipped. Of the 1.7 million, Apple sold 1.4 million and RIM sold 1.3. phones.

Now to add to Nokia’s troubles, it doesn’t have a significant presence in the U.S. though it has a strong presence in Asia , especially in the large markets like China and India. But with iPhone’s imminent launch in China and RIM’s increased efforts, Nokia has some tough challenges ahead.

The mobile device market is clearly headed for a major upheaval. With Andriod based phones to hit the market (18 models) and several service providers launching their own App Store, we will see interesting things happen.

Disclosure: I am a Nokia user and have admired their management style. One of my early blog posts was about Nokia’s amazing success in India here.

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2 Comments »

  1. Of interest to note also is that Nokia has been reported to be closing its flagship stores in London, New York and Chicago. Two risk areas: (1) ability to react/capitalise quickly on new product categories: tablets, e-readers etc. etc. (2) innovation is increasingly coming from adjacent/other markets,… which can only complicate matters for incumbent phone manufacturers.

    Comment by Foong — January 5, 2010 @ 3:39 pm | Reply

  2. Nokia has been here before – seemingly taken unawares by a competitor’s move or a consumer trend. Take the color phone revolution of the 2004-05 period or the slim form factor craze of 2005-06 (read the stupendous success of RAZR). Each time, they bounced back & landed on their feet. The advantage they seem to have is picking up the right lessons from their competitors & scaling it up like no one else can in the market today. Selling 400 million phones a year across the world does allow them a huge leverage. The key challenge is how does one define competition anymore – when the Nseries was launched, it merged the computing capabilities of a PC with the media capabilities of everything from a SLR camera to a iPod to a handycam, thereby going up directly with all 3 categories. Then the iPhone came along to introduce a new dimension by merging touch-screen with multimedia, thus tearing apart more walls. And now with iPad, who exactly are they going after? And will their focus shift from iPhone, thereby giving the Nokias & the Sony Ericssons of the world the chance to recover?

    Comment by Naari — February 1, 2010 @ 2:59 pm | Reply


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