International Marketing

" NOKIA - THE FUTURE AHEAD" WILL NOKIA

REGAIN ITS KEEP AND HOLD ON TO ITS PRE-
EMINENT POSITION IN THE GOBAL CELL PHONE
MARKET , DISCUSS AND FORECAST"
 

Submitted to: Submitted by:

Prof Vishal Sharma Neha Sapra
PG20095337

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 INTRODUCTION

Nokia is the world leader in cellular phone communications, driving the growth and
sustainability of the broader mobility industry. Nokia, the brand is synonymous with
innovation-some of its innovative products include cellular phones, devices and solutions for
imaging, games and media. Nokia also provides equipment, solutions and services for
network operators and corporations.

Nokia is one of the top cellular brands in India and its one of the most trusted brands in India
according to ET Brand Equity Survey. Nokia has been the favorites brand among different
categories of people in India, since its entry into India; it is the 4 th most trusted brand in 2007;
ranked the most respected company in the Indian consumer durables as of 2007 by business
world; one of the most leading telecommunications equipment vendor in the country by
Voice and Data; the Brand of the Year at the Confederation of Indian Industry (CII) Brand
Summit held in Chennai on 16th and 17th February, 2005.

Nokia's history started in year 1865, when engineer Fredrik Idestam established a wood-pulp
mill in Southern Finland and started manufacturing paper. Due to the European
industrialization and the growing consumption of paper and cardboard Nokia soon became
successful. In 1895 Fredrik Idestam handed over the reins of the company to his son-in-law.
Nokia was actually founded in 1965 by Fredrik Idestam in Finland as a paper manufacturing
company. Nokia Corporation is one of the world's largest telecommunications equipment
manufacturers. With headquarters in Keilaniemi of Espoo, Finland, this Finnish
telecommunications company is best known today for its leading range of mobile phones.
Nokia also produces mobile phone infrastructure and other telecommunications equipment
for applications such as traditional voice telephony, ISDN, broadband access, professional
mobile radio, voice over IP, wireless LAN and a line of satellite receivers.

Nokia provides mobile communication equipment for every major market and protocol,
including GSM, CDMA, and WCDMA.

Nokia was established in 1865 as a wood-pulp mill by Fredrik Idestam on the banks of Nokia 2
rapids. Finnish Rubber Works established its factories in the beginning of 20th century
nearby and began using Nokia as its brand. Shortly after World War I Finnish Rubber Works
acquired Nokia wood mills as well as Finnish Cable Works, a producer of telephone and
telegraph cables. All three companies were merged as Nokia Corporation in 1967. The name
Nokia originated from the river which flowed through the town of the same name (Nokia).

In the 1970s Nokia became more involved in the telecommunications industry by developing
the Nokia DX 200, a digital switch for telephone exchanges. In the 1980s, Nokia offered a
series of personal computers called MikroMikko; however, these operations were sold to
International Computers, Ltd. (ICL), which was later merged with Fujitsu-Siemens AG.
Nokia also began developing mobile phones for the NMT network; unfortunately, the
company ran afoul of serious financial problems in the 1990s and streamlined its
manufacturing of mobile phones, mobile phone infrastructure, and other telecommunications
areas, divesting itself of other items, such as televisions and personal computers.

In 2004, Nokia resorted to similar streamlining practices with layoffs and organizational
restructuring, although on a significantly smaller scale. This, however, diminished Nokia's
public image in Finland, and produced a number of court cases along with, at least, one
television show critical of Nokia.

Nokia joined other mobile phone manufacturers to embrace Taiwanese Original Device
Manufacturers. Nokia signed a contract with BenQ, a Taiwanese Original Device
Manufacturer, to develop three high-end mobile phones, which are scheduled to retail by the
end of 2005.

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 NOKIA STRATEGY

The Nokia Strategy continues to focus on three activities to expand mobile communications
in terms of volume and value:

 Expand mobile voice

 Drive consumer multimedia
 Bring extended mobility to enterprises

Expand mobile voice: We can further the mobile voice market – both in markets where
mobile telephony is just taking off as well as in more mature markets. Nokia estimates the
total global mobile subscriber base to reach two billion by the end of 2005and hit three billion
by 2010.Nokia’s position in mobile voice is strong thanks to our key assets and excellent
logistics capabilities.

Drive consumer multimedia: Nokia is playing a key role in shaping this emerging complex
market by focusing on the fastest growth areas: imaging, music, and games, to name a few.

Bring extended mobility to enterprises: Nokia will provide a range of competitive,

specifically targeted handsets, platforms, and connectivity solutions so enterprises can boost
productivity through the power of mobility.

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 SECRETS TO NOKIA’S STRATEGIC SUCCESS

One can analyze the secrets behind how an enigmatic Finnish Company got an edge over the
Indian giants to triumph as the global leader in mobile communications.

Bold Strategic Intent – While others debate and agonize over first –mover strategies,
Nokia rushes for new opportunities and products. Growing up as a small Finnish
Company with few resources and no incumbent privileges, Nokia is accustomed to
moving swiftly and decisively to claim its share of worldwide markets- from
infrastructure to handsets and software applications.

Innovation through Value Chain – Through technology, innovation and segmentation,

branding and design, Nokia makes innovation a top priority. Like Proctor & Gamble,
it has shrewdly filled the shelves with innovative new products to dominate
categories. Like Sony, it has used its umbrella brand to sell new products and services
and to create footholds in new markets. Unlike its direct rivals (Motorola, Ericsson),
Nokia’s innovation extends from technology innovation to marketing activities.

Flat Organization – Prior to its worldwide expansion, Nokia extended the use of IT
throughout the company. As it became a process organization, it has shunned
hierarchies and bureaucracy. Even the senior executives have been rotated from one
work task to another. The organization chart looks hierarchic but teams and
networking reigns.

Entrepreneurial Spirit – Like the best Silicon startups, Nokia encourages

entrepreneurialism throughout the ranks and views failure as a learning experience.
Incentives, rewards and lifelong learning permeate the entire company. Humility is
taken seriously at Nokia as in the technology sector, the arrogant of today are
considered losers of tomorrow.

Collective leadership – Nokia relies on its executive board, with each member bringing

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something unique
Global R & D Networks – Nokia’s R&D efforts reflect extensive collaboration with vital
research institutions worldwide. The company invests less in technology development
than its rivals, but often exploits new knowledge more efficiently. Through
technology coalitions it has managed to internalize new know-how while neutralizing
competitive threats.

Competition and Co-operation – By managing its corporate and government relations

with diplomacy and consideration, Nokia has been able to avoid high profile and
costly anti-trust actions and competition policy struggles. Instead of trying to buy or
crush potential rivals, Nokia works to cooperate with suppliers, partners, clients, even
direct competitors.

Customer Focus – The most enduring factor is Nokia’s ability and willingness to listen
to the customer –a fact apparent in its strategy, structure and resource allocation and
also in its products and services. Due to its foresight, Nokia can not only finger at the
pulse of the market – it often knows what the customer wants even if the customer is
not yet aware of this.

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FUTURE OF NOKIA
To look into the future of Nokia, I might suggest you to look into the past. I have been with
Nokia since its 5100 Phone, upgraded to a 3310 -> 3315 -> 3650 -> 6600, with some support
coming from 1100 during the 6600 phase. What I used to love about them Nokia was the fact
that they were rock solid, high QC, high craftsmanship (build quality), etc.

But the last gems from Nokia were the early crop of S60 phones, they clearly represented a
world of difference between half baked proprietary OSes used by other companies. They have
been stuck in that phase for a long time !! Instead of Innovating as a whole, they choose to go
with incremental updates, no version of the S60 is clearly distinct from the previous version,
and lets not even talk about Maemo here. The Mass market has shunned Maemo, and will do
the same with Maemo 5 !

Nokia in the present has a strategy that is reflected in it product line -- N Series phones, E
Series, Music Xpress, S40 Feature & Entry level phones.

Nokia launched N Series to great hype, and the initial models from N70 right until N73 were
wildly popular (i.e., in India) , but by then Samsung & other players came in with all guns
blazing ! And as every body was familiar with Nokia's UI, they wanted change, and some
even opted for LG's KIRFy phones ( the horror !!) and after a while the real trouble started --
THE iPhone launched !

Nokia sought to reverse their market loss and decided to rejuvenate their product lines, they
detailed S60's move to the touch arena, 6 months after the iPhone's announcement !! The
Tube as it was notoriously codenamed. It even got itself into "The Dark Knight". Even that
couldn't save it from its eventual fate.

N97 was promised to be Nokia's true entry into iPhone's newly acquired market. Even it had
failed, EPIC-ly. My personal experience ( of a friend) has been nothing sort of a nightmare,
had 3 replacements, 8 service ships, the current one is what the first one should have been like
!

N97 mini has supposedly fixed those issues, and is supposedly been touted as the best VFM
phone in the Mid High end market, but is powered by a weak ancient ARM 11 based 4xx
MHz processor !!

ITS FUTURE PLAN:

Services:

Nokia's Ovi Maps implementation would improve for the better or worse, as it faces serious
competition from Google's Navigation !

Nokia's Ovi Store, will have a (major - minor ?) structuring to even stand up to the App Store.
N-Gage has been integrated into the Ovi store. Comes with Music may strip its DRM, a la
iTunes. 7
Nokia's QC is currently non-existent, design flaws, Code irregularity and what not plague the
N97. All these kinks have to be straightened out !
N900 is a reference device on which Nokia may choose to build future mobiles, its is AFAIK
the highest speed Nokia mobile. Symbian may be well heading for a total overhaul as its
presently being threatened by the iPhone OS, Palm OS and notwithstanding that, the
upcoming "Project Pink" from MS. Nokia has to look straight and focus on all these factors,
and reinforce its current strengths and if it decides to go all (drastically) innovative on us. It
shall do it by all means.

Nokia used to make some cracking handsets. Over the years I’ve owned several, and up until
the iPhone, But Nokia’s lost its way, and if the leaked memo published by Engadget is real,
newly appointed CEO Stephen Elop realizes just how bad a predicament the company is in.

Here are just a few choice quotes from the memo:

“Apple demonstrated that if designed well, consumers would buy a high-priced phone with a
great experience and developers would build applications. They changed the game, and today,
Apple owns the high-end range.”

“In about two years, Android created a platform that attracts application developers, service
providers and hardware manufacturers. Android came in at the high-end, they are now
winning the mid-range, and quickly they are going downstream to phones under €100.”

“The first iPhone shipped in 2007, and we still don’t have a product that is close to their
experience. Android came on the scene just over 2 years ago, and this week they took our
leadership position in smartphone volumes. Unbelievable.”

“We thought MeeGo would be a platform for winning high-end smartphones. However, at
this rate, by the end of 2011, we might have only one MeeGo product in the market.”

“At the midrange, we have Symbian. It has proven to be non-competitive in leading markets
like North America.”

“Our competitors aren’t taking our market share with devices; they are taking our market
share with an entire ecosystem. This means we’re going to have to decide how we either
build, catalyse or join an ecosystem.”

For fans of Nokia (not to mention shareholders, that memo makes dismal reading. Is Nokia
dead?

Maybe not. Go back and reread that last quote:

“Our competitors aren’t taking our market share with devices; they are taking our market
share with an entire ecosystem. This means we’re going to have to decide how we either
build, catalyse or join an ecosystem.”

Nokia seems to have finally realized that Symbian and MeeGo just don’t cut it. Consumers
have turned their backs on Nokia’s current platform, so it needs to get on with building,
catalyzing and joining ecosystems … 8
And that’s what I think Nokia will do.
Here’s my prediction - Nokia will bin MeeGo (or go down to just a single product as the
memo suggests). It will also maintain Symbian but in a lesser capacity. Why? Because
Europeans still like Symbian and dumping it would seem reactionary. But neither of these
moves will revitalize Nokia. To do that, Nokia needs a platform.

But why settle for one platform. My prediction is that Nokia will do what HTC has done, and
jump on the Android and Windows Phone 7. Android would give Nokia access to an
already well-established ecosystem, while Windows Phone 7 would allow Nokia the
opportunity to get in close to the start with a budding ecosystem. It a trick that worked for
HTC, so there’s no reason to think that it wouldn’t work for Nokia.

Spreading itself between Android and Windows Phone 7 gives Nokia the chance not only to
survive, but expand and flourish in an increasingly competitive market.