The news of Nokia Corp. officially losing its numero-uno status to Samsung Corp. in global sales leaves me a bit disheartened. Not because it was unexpected or because I'm a Nokia fan, but because in India, the brand has been synonymous with the mobile revolution and it is sad to see it take a beating in the global arena.(See and )
Nokia has been consistently losing the marketshare in India and there is a strong possibility that it might lose the India crown as well. But there is no denying the fact that it played a significant role in India's mobile revolution.
Nokia brings back nostalgic memories to many in India. To me, it reminds me of my first mobile phone, my college days For a long time, purchasing a mobile device in India meant purchasing a Nokia phone, and Nokia didnt let India down. It came out with devices relevant to the Indian market, such as a phone with the torch capability for the hinterland. (See Nokia: The Missing Hero, Nokia's Window To Success? and Nokia to Close Ovi Share.)
Though still being a dominant player, the company has been on the decline in India. Nokia entered the Indian market in 1995 and captured around 75 percent of the handset market for close to a decade. The early mover advantage put the company in a position where it could dictate its own terms and hence retained its position of the winner.
The question now is what went wrong? How did Nokia start losing its leadership position? Did it fail to innovate? Or the opponents just got tougher? Many questions, some answers.
Let's delve into the history to find some answers. Till 1991, the Finland-based manufacturer had to rely on its home country for more than a quarter of its turnover. In the mid-90s, however, due to its timely investment in the GSM technology, it managed to grow its sales substantially in Asia, North America and South America. By 1998, a focused approach and an early-mover advantage paid dividends and helped Nokia become the world's largest mobile phone manufacturer.
It was a smooth journey till a few years back, but then Nokia started losing pace with the arrival of the low-end Android phones. The growing popularity of the BlackBerry and the introduction of iPhones in 2007 started making a dent in Nokia's marketshare.
Introduction of new technologies like 3G shifted the consumer interest to cloud computing, new-age collaboration tools and social media. Perhaps, this was the time when Nokia's strategy went seriously wrong. It failed to innovate and add features that could make it compete with the Androids and the iPhones. By the time it tied up with Microsoft Corp. Windows after a failed experimentation with Meego and dumping of its long-term OS partner, Symbian Ltd., the damage was already done.
Clearly, the company's inability to match the expectations of the application developers, and a stubborn attitude are some of the key reasons for this sudden fall.
Add to all this Nokia's overconfidence of its brand recall value. Its failure to anticipate market trends and the growing needs of consumers at both entry level and top level led to Nokia's losing a significant marketshare. Changing technology dynamics also made the simplicity factor redundant, which was no longer a salable concept for a company like Nokia whose market strategy largely revolved around being simple and robust.
Nokia's dominance in the Indian rural and semi-urban markets also took a beating due to the rise of local players such as Micromax Informatics Ltd. and Lava International Ltd. In the rural markets, Nokia's biggest strategic failure was a delay in launching a dual-SIM model, which helped Chinese and local manufactures eat into its marketshare.
Nokia also failed to attract the urban Indian youth who demanded smarter and more power-packed devices that could act as their personal assistants. Incomes were growing in the urban areas and hence low price for an incompetitive device became a poor marketing gimmick, which had to fail.
At the same time, players like Samsung and Apple Inc. were constantly innovating and introducing devices that were inline with the changing trends. The rising popularity of Android and Nokia's failure (or reluctance) to partner with Android only added to its problems.
Today, it may have a partner like Microsoft to challenge competition, the results do not show any positives for this collaboration. Sales figures for Windows phones are disappointing, making it difficult for application and solution providers to come to its rescue.
Samsung fans may have a reason to rejoice for now, but lets not forget that it's not yet time for the leader's obituary. At times, it is better to take a step back, recharge and follow a road less traveled... We hope to see Nokia back in action soon!
Jatinder Singh, Principal Correspondent, Light Reading India
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