Demand and Supply of Nokia Mobiles

Introduction
When mobile phones were introduced in India in the mid-90s, US based Motorola,
Sweden's Ericsson and Finland's Nokia dominated the handset market in India.
Over the years, the old order has changed. Asian players like Samsung and LG,
European brands Philips and Siemens now compete with Motorola and Sony-
Ericsson. However, Nokia has been able to race ahead of all other players to
become the leading mobile handset maker across the world.

In India its dominance is even more pronounced with a 70 per cent market
share, compared to around 30 per cent globally. Its closest rival in the Indian
market, Samsung, comes a poor second with less than 10 per cent market share. Its
business strategy, management style and marketing savvy have earned it the
respect of its peers. In 2004, Nokia was chosen as 'the most respected consumer
durables company' in India by the weekly magazine Business World.

The reasons for Nokia's stupendous success in India include amazing

branding, a focused marketing exercise and distribution strength, among others.
Sanjeev Sharma, CEO, Nokia India, says, “An extensive product range,
anticipating consumer trends early — we were the first to introduce a phone for
the fashion segment, the 8210 — a retail strategy that ensures consumers across
the country get a consistent experience and an excellent staff, all put together,
clicked for Nokia.” Nokia's commitment to the Indian consumer was underscored
when it became the first, and only, handset major to develop a model suited for
Indian conditions. The company launched two models, 1100 and 1108, after
intensive research on the Indian customer's specific needs. The phones gave an
integrated torch, a sheath covered keypad for dust protection and a slip-free grip.
The phones were also introduced in other markets in Asia and Africa. Nokia's first
‘Made for India’ model, the 1100, is the largest selling model in the Indian GSM
handset market. The five largest selling handset models in the market are all
Nokia's. Besides, the company today has a substantial share of both ends of the
market. It has 77 per cent of the $66-$88 phone market and about 68 per cent of
the over $330 phone market.

In a marketing first, in March this year Nokia opened a dedicated Concept

Store which features the full range of Nokia products including handsets, mobile
enhancements, ring tones, graphics, games, software and exclusive Nokia
merchandise. The products allow clients to experience the newest applications
such as gaming, imaging and e-mail support

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 Demand and Supply of Nokia Mobiles

Objectives

-Overview of the world mobile handset industry.

-In-depth analysis of the Asian mobile handset industry.

-The present market position.

-The future projections.

-Geographical and regional segmentation of the industry and the consumers.

-Sales and profitability of the industry.

-Challenges faced by the industry that propels higher competition among the
vendors and retail sectors.

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 Demand and Supply of Nokia Mobiles

Product Details…

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 Demand and Supply of Nokia Mobiles

Economical Products:

1100 better known as “Made for India”

Product features:

• Icon-based phonebook with simplified menu

navigation
• 20-chord polyphonic ringing tones with
MP3-grade sound
• New inverted black and white display
• Graphical demo mode for phone features both with and without SIM
card
• Analog clock display
• Call management (timers, counters)
• Internal antenna
• Changeable Xpress-on™ color covers
• Picture messaging to send a picture greeting
• Three built-in games
Easy deletion of multiple messages

• Undo item in SMS editor Price: Rs. 1,744.00

• Warranty: Nokia India 1 Year Warranty

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 Demand and Supply of Nokia Mobiles

Luxurious Products: N93

The Nokia N93i features a 3.2 megapixel camera, Carl Zeiss
optics, 3x optical zoom and digital video stabilization. Create
DVD-like videos at 30 frames per second with MPEG4 technology
and share them on the 2.4" display. For a big screen experience,
connect the Nokia N93i to a compatible TV using direct TV out
connectivity or via Wireless LAN and UPnP technology. The N93i
also features a digital stereo microphone, music player and FM
stereo radio, dual mode WCDMA/GSM and triband GSM coverage
on up to five continents (EDGE/GSM 900/1800/1900 + WCDMA
2100 MHz networks).

Video
• Shoot DVD-like quality video up to 30 frames per second
• Video stabilization
• Dedicated video capture controls
• Digital stereo microphone
Imaging
• 3.2 megapixel camera and Carl Zeiss optics
• Sharper images with up to 3x optical zoom
• Autofocus and LED flash
Editing & Sharing
• 2.4-inch display
• Cut your videos and burn them to DVDs with Adobe Premiere Elements
• Post directly to Flickr
• Share images during video conferencing
Connectivity
• Nokia Web Browser with Mini Map
• Support for RSS feeds
• Connect to your compatible PC via USB, infrared, or Bluetooth wireless
connectivity
• Play your videos on compatible home electronic devices with Wi-Fi
connectivity
Operating frequency
• M-156 (Dual-mode)
• WCDMA 2100EGSM 900/1800/1900 MHz
Display
• Main display: 240 x 320 with up to 16.7 million true colors
• Sub-display: 128 x 36
MRP
• Rs. 42209

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 Demand and Supply of Nokia Mobiles

Production Process
Globally, mobile phone manufacturing involves seven different segments with
varying technology and skill-sets. These are semiconductors or ICs, passive
components, PCB fabrication, modular components, plastic parts, box-build
assembly and testing. As things stand, there are companies in India that are
already in a position to provide most of these components.
In most mobile handsets, there are anything between 40-60 components. In China,
almost all these are made locally. In India, the local companies can provide about
30 per cent of the components initially.

These can be supplied by the component suppliers to the electronic

industry, most of whom are based in Bangalore. According to a study by
international consultancy KPMG for the Indian Cellular Association, the
technology used to make printed circuit boards (PCBs) by Flextronics, D-Link,
Jabil Circuit and Celetron in India exceeds the requirements needed to
manufacture handset PCBs.

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 Demand and Supply of Nokia Mobiles

Market Share
Nokia’s market share (in terms of
units sold) has grown to 74% in March
’06 from 61.5% in October ’05. In the
colour segment too, Nokia has increased
its market share to 55% in March ’06 from
33.7% in October ’05.
In terms of value, Nokia’s overall market
share has jumped to 70.5% in March ’06
from 57.7% in October ’05. In the colour
phone category, its market share (in terms
of value) has increased to 59.3% in March
’06 from 40.9% in October ’05.

Sony Ericsson’s market share in

the colour segment is marginally more
than the Samsung’s at 16.7% (units) and 15.9% (value) in March ’06 and is an
improvement over its October ’05 figures of 15.6% (units) and 14% (value). Sony
Ericsson’s market share (in terms of units) has improved marginally from 7.1% in
October ’05 to 7.6% in March ’06, although in value terms it has increased from
8.7% in October ’05 to 10.2% in March ’06.

The colour segment, where Samsung used to rule once, has seen its market
share falling both in terms of units and value. The market share (units) has
dropped to 16.3% in March ’06 from 34.9% in October ’05and in terms of value,
has dropped to 14.7% in March ’06 from 32.5% in October ’05.
Nokia has retained the top slot in Indian GSM market with 79% share, while US
giant Motorola has more than doubled its share to 7% this year, according to a
study.

Motorola has been able to significantly improve its share to 7% this year
from 3% in 2005, according to the latest annual TNS Cell Track 2006 study.

It said the US company's gain was possibly the loss of South Korean handset
maker Samsung, whose market share dropped to 4% in 2006 from 6% a year ago.

In the CDMA market, LG has consolidated its position as the market leader with
49% market share this year against 43% in 2005, the study said.

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 Demand and Supply of Nokia Mobiles

While Nokia managed to retain its share in CDMA handsets, Samsung and
Motorola lost market share from 17% to 8% and 12% to 4% respectively.

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 Demand and Supply of Nokia Mobiles

Survey Report

Data sources

The research plan calls for gathering primary, secondary or both types of data.
Primary data was gathered by interviewing a decided sample space for the research
project.
Secondary data was collected from related issues in newspaper and business magazines
and from search engines like google.com, khoj.com and dogpile.com. We started the
investigation by examining the secondary data it helped us lot to know about the current
position of the Nokia handset in the world.

RESEARCH METHODOLOGY

1. Source of data:
Secondary source – Related articles from newspaper and business magazines and
also from internet (google.com)
Primary source – 10 consumers and 5 retailers of different age groups from
Mumbai and Navi Mumbai were interviewed.

2. Nature of data:
Data collected from consumers are opinion. While that from related websites are
facts.

3. Communication approach:
Tool: Questionnaire
Type: Structured

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 Demand and Supply of Nokia Mobiles

NOKIA SONY LG MOTOROLA TOTAL

Most like 8 4 2 1 15
Maxi sales 8 5 1 1 15

Most like

MOTOROLA
7%
LG
NOKIA
13%
SONY
NOKIA LG
SONY 53% MOTOROLA
27%

Maxsales

MOTOROLA
7%
LG NOKIA
7% SONY
NOKIA
SONY LG
53%
33% MOTOROLA

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 Demand and Supply of Nokia Mobiles

GSM CDMA PDA OTHER TOTAL

TECHNOLOGY 8 4 2 1 15

TECHNOLOGY

OTHER
PDA 7%
13%
GSM
CDMA
GSM PDA

CDMA 53% OTHER

27%

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 Demand and Supply of Nokia Mobiles

Future Trends In Handset

Industry
Design Facility In Bangalore International Mobile
Phone
Nokia is to set up design facility in bangalore international mobile phone
giant Nokia plans to set up a design facility in Bangalore, to cater to the
burgeoning demand for its handsets in the country. For Finland-based Nokia, India
will emerge as the second largest market in the world by 2010. According to Olli-
Pekka Kallasvuo, CEO and President, Nokia, there would be four billion mobile
phone subscribers in the world globally by 2010. More than half of them would be
from the Asia-Pacific region, including India. Nokia has an 80 per cent market
share in the buoyant Indian cellular phone market.

The new design centre in Bangalore would anticipate trends and designs of
cell phone users across the sub-continent. The Finnish firm, which already has two
design centres – in London and Espo in Finland – plans another facility in Rio de
Janeiro. The Asia-Pacific region would account for 50 per cent of Nokia’s sales
shortly. The company has a manufacturing unit in Chennai, with a capacity of 20
million handsets a year. Besides the nearly 8 million new subscribers who are
signed up every month in India, Nokia sees tremendous potential in the
replacement market, which accounts for 65 per cent of the business today. The
replacement market is expected to account for 90 per cent of handset sales in India
by 2010.

500 million mobile phones in India by 2010

THERE will be 500 million mobile phone connections in India by 2010,
and about $20 billion of investments will flow into the telecommunications and IT
sectors by then. According to Vision 2010, drawn up by the government, 85 per
cent of India’s geographical area would get cellular coverage by the end of 2007,
while total phone connections would add up to about 250 million. Over the next
three years, the coverage would be extended to 90 per cent of the country’s
geographical area. At present, about 40 per cent of India’s geographical area is
covered by the telecommunications network, and the country has a tele-density of
17 per cent.
Federal Communications and Information Technology Minister Dayanidhi
Maran notes that as per Vision 2010, rural connectivity would be enhanced to
touch the 50 million-mark in 2007, and 80 million by 2010. India is all set to
emerge as the third largest mobile phone market in the world in early 2007, next
only to China and the US. In November, there were 136 million mobile phone

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 Demand and Supply of Nokia Mobiles

subscribers in India. Every month, India’s mobile phone subscriber base expands
by seven to eight million; in the first quarter of 2007, India is expected to overtake
Russia, which currently ranks third with 152 million subscribers. However, Russia
adds a mere 2 million new subscribers every month. The GSM (Global System for
Mobile Communications) subscriber base touched the 100 million-mark in India
in November, making it the third highest GSM market after China and Russia.
There are an additional 36 million CDMA (Code Division Multiple Access)
subscribers in India. Industry observers feel that 2007 will see the addition of 10
million new subscribers every month in India, making it the fastest growing
cellular phone market in the world. The government’s target of 250 million
subscribers by the end of 2007 is likely to be reached towards the end of
September.

The mobile handset sales continue to grow worldwide, going up

from 482.5 million in 2003 to 561 million in 2004. This growth rate is expected to
gradually slow down over a period of five years. The estimated growth figures
for these five years are—10% in 2005, 7.7% in 2006, 6.4% in 2007, 4.8% in
2008 and 2.6% in 2009. Notwithstanding the gradual decline in the growth
figures, the annual handset sales are predicted to reach 767 million by 2009.
Mobile handsets with innovative features have gained a lot of popularity in the
developed nations. But the developing markets, which are not yet saturated,
namely, India, Russia, Brazil, Mexico, and China, will mainly carry on the global
handset sales.
Some of the prominent companies, namely, Samsung, LG, and Sony Ericsson will
see remarkable growth in this year. Though maintaining a huge gap from its nearest
rival, Motorola, Nokia is expected to lose some market share in this year.

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 Demand and Supply of Nokia Mobiles

Problems

Nokia India: Pathetic apathy for the Indian customer

Nokia is selling some of its degraded products that have software problems. If customer
come across such problem in a new set, they waste lot of time in running around service
centers as it does not help much, the company informs for replacement set after repeated
follow up only.

This promise is never fulfilled, if it is fulfilled the customer gets either a secondhand
phone or a hand set which is even worse than the defective hand set. After some time the
same problems occurs in supplied set also and customer runs around Nokia Service
Center again and again.

Problems with Substandard Nokia Handset

The phone works well after initial period of purchase, the problem starts after few days,
near the end or after the end of guarantee period. Following are the general problems
observed-

• Some of the hand set has software problems which work well during initial period, but
after some time problem starts and finally it crashes which requires replacement of hand
set. Replaced hand set also gives same experience.

• In some of cases after 5-6 days of purchase, at the end of guarantee expiry or with in
one month after expiry of guarantee period the phone started giving a minor problem of
restarting / rebooting and crashes at the end.

• The phone switches-off on its own a few times in spite of having network.

• Poor battery performance, needing recharging every 3-4 hrs this is not helping even
after replacement with new battery.

• Nokia mobile generate temperature, if the conversation goes more then 15 Minutes.

• It switches off suddenly while you are sending or replying SMS. So have to keep watch
after sending or replying SMS if it is working or not or else you will end up having a
switched off phone in your pocket ensuring you miss important calls.

• Bad network transmission, automatic switching-off of the phone & headset clarity
problem.
• Some consumers complain of N73 that it starts giving problem like hanging, auto
shut and auto re-start, when camera is used there are black flickering lines on the
screen, voice is at low pitch whenever the call is received or call is made even though

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 Demand and Supply of Nokia Mobiles

volume is at full.

• Display panel light not glowing; display is there but no light due to starting of sudden
vibration. Vibration stops only after removal of battery. But when battery is fixed
back vibrations starts immediately.

Faulty handsets in Indian Market:

Nokia 6255 CDMA

The Nokia 6255 is technically faulty phone as it gets hanged, switch off, asks for transfer
of data with out using phone, and gets disconnected several times. The replacement
phone also gives the same problem.

Once this phone goes dead, you will not be able to do anything, as with CDMA
technology, you don’t have SIM cards, which you can put in another phone, and keep
your work going. The phone dead means you are out of communication.

Phones where problem observed are 1101, 1112, 1120, 1600, 2112, 2300, 2600, 2865,
3105, 3100, 3120, 3155CDMA, 3220, 3230, 3250, 6030, 6125, 6131, 6233, 6225CDMA,
6260, 6265, 6255 CDMA 6270, 6280, 6600, 6630, 6670, 6708, 7610, 668 i, N70, N80,
N93, E50

If a phone starts giving problem, Indian customer falls into trap of Nokia Service never
ending circle. In most of the cases matter never reported to concerned authorities due to
lack of time on such matters.

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 Demand and Supply of Nokia Mobiles

Conclusion
• In India Nokia’s dominance is even more pronounced with a 71 per
cent market share, compared to around 30 per cent globally.

• Nokia's stupendous successes in India include amazing branding, a

focused marketing exercise and distribution strength, among other
brands.

• An extensive product range, anticipating consumer trends early.

Nokia were the first to introduce a phone for the fashion segment. A
retail strategy that ensures consumers across the country get a
consistent experience and an excellent staff, all put together, clicked
for Nokia.

• Over half a billion mobile phones are sold every year, and despite
sluggishness in other parts of the technology industry, the number
continues to grow.

• Sales are being driven, in part, by the surge of new subscribers in the
developing world, particularly in India and China. In the developed
world, meanwhile, where markets are so saturated that most adults
already carry a mobile phone, existing subscribers are switching in
droves to today's more advanced models.

• Meanwhile, the number of mobile phones in use, at around 1.4

billion, overtook the number of fixed-line phones last year.

• Nokia's commitment to the Indian consumer was underscored when

it became the first, and only, handset major to develop a model
suited for Indian conditions.

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 Demand and Supply of Nokia Mobiles

Bibliography
Web site:
www.google.com
www.nokia.com
www.dogpile.com
www.businessline.com

Magazines:
Business today

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 Demand and Supply of Nokia Mobiles

ANNEXURE
Retailers Questionnaire

1. Name of Respondent: __________________________________

2. Address:
_________________________________________________________________

3. Contact No:___________________

4 Age Group:

Years
10 – 17
18 – 25
26 – 33
34 +

6. Total house hold income from all source:___________________

7. Which mobile do you select out of this?

a) Nokia b) Sony Ericsson c) L.G d) Motorola

8. Which hand set has maximum sales volume?

a) Nokia b) Sony Ericsson c) L.G d) Motorola

9. Which type of Hand set has sales volume?

a) Colour b) CDMA c)GSM d)Others

10. Why people go for other mobiles than nokia?

a) New technology b) Features c) Sound system d) Quality

11. What are the common problems faced by nokia users?

a) Battery b) Keypad c) Feature d) Others

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 Demand and Supply of Nokia Mobiles

Customers Questionnaire

1. Name of Respondent: __________________________________

2. Address:
_________________________________________________________________

3. Contact No:___________________

4 Age Group:

Years
10 – 17
18 – 25
26 – 33
34 +

5. Occupation: ____________________________

6. Total house hold income from all sources: ___________________

7. Which mobile do you select out of this?

b) Nokia b)Sony Ericsson c) L.G d) Motorola

8. Why do you go for mobile other than nokia?

b) New technology b) Features c) Sound system d) Quality

9. What are the common problems faced by nokia users?

b) Battery b) Keypad c) Feature d) Others

10. Price of nokia mobile is

a) Very high b) Fairly High c) Reasonable d) Cheap

11. How satisfied are you from your mobile phone?

a) Very satisfied b) Fairly satisfied c) Not very satisfied d)Not at all satisfied

12. Which Nokia's product/market segment is you referring to

a) Fashion b) Sports c) Gaming d) business to business

13 why do you prefer nokia mobiles?

a) Durability b) easy application c) sound quality d) battery life
14. How frequently do you change your mobile?
a) 6 mths b) 12mths c) 18mths d) 24mths or more

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Demand and Supply of Nokia Mobiles

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