A STUDY ON NOKIA’S DOWNFALL IN INDIAN SMARTPHONE MARKET

PRESENTED BY-

VINU PRAVEEN V

A GLIMPSE ON NOKIA

• Nokia Corporation, stylized as Nokia, is a finnish multinational communications and information technology company, founded in 1865.

• The company has had various industries in its 150-year history, originally founded as a pulp mill, and currently focuses on large-scale telecommunications infrastructures, and technology development and licensing.

• The company was founded way back in May 12, 1865 by three partners namely;1. Fredrik Idestam2. Leo Mechelin3. Eduard Polón

• Nokia is also a major contributor to the mobile telephony industry, having assisted in development of the GSM and LTE standards, and was, for a period, the largest vendor of mobile phones in the world.

• Nokia's dominance also extended into the smartphone industry through its Symbian platform, but was soon overshadowed by competitors.

WHEN DID NOKIA ENTER INDIA?

• Nokia began its India operations in 1995.

• Saare Jahaan Se Acchha, first Indian ringtone in a Nokia 5110 was made in 1998.

• First phone with Hindi menu (Nokia 3210) was launched in 2000.

• First Camera phone (Nokia 7650) was launched in 2002.

• First Made for India phone, Nokia 1100 was launched in 2003.

• First Wi-fi Phone- Nokia Communicator (N9500) was launched in 2004.

• Local UI in additional local language was developed in 2005.

• Nokia manufacturing plant was set up in Chennai in 2006.

INDIAN MARKET SCENARIO WAY BACK IN 1995

• Entry of GSM in India, thus triggering telecom revolution.

• BPL launches mobile services.

• In 1995, TRAI (Telecom Regulatory Authority of India) was setup.

• This reduced the interference of Government in deciding tariffs and policy making.

• Thus, to make it simpler, there was no signs of existence of wireless telecommunication at that period.

• And this scenario of the Indian market posed to be a huge ocean of opportunity for Nokia.

EARLY STAGES OF SMARTPHONE IN INDIA

• Ericsson was the first brand to actually coin the phrase “smartphone”, with the release of its GS88 in 1997.

• By all accounts, though, Nokia actually beat Ericcson to the finish line a year earlier with what many consider to be the very essential smartphone, the Nokia 9000 Communicator.

COMPARING THE SPECIFICATIONS OF THESE BOTH

NOKIA 9000 COMMUNICATOR ERICSSON GS88

GSM Technology, Mini SIM GSM Technology

Touch-QWERTY input Touch-QWERTY input

Camera- None Camera- None

Messaging- SMS, E-mail Messaging- SMS, E-mail

Operating System- GeOS Operating System- GeOS

Browser Platform- HTML browser Browser Platform- WAP browser

And THEN, ANDROID ENTERS INDIA

• Android entered the Indian market in 2008.

• The first android handset to be launched in India was the HTC Dream.

Specifications of HTC Dream:

• Android Donut• TFT Capacitive Touch screen• QWERTY keyboard• Mini SIM• Primary Camera: 3.15 MP, Autofocus• Internal Memory: 192MB RAM• Browser: HTML platform• Mp3 Player• Removable Li-Ion Battery• GPS• Bluetooth ( with headset support only )

Indian Market Scenario after android and ios came into play

• After the introduction of Android and Apple iOS in 2007, the OS race was completely taken over by the two giants.

• The reasons for collapse of Symbian OS is lack of applications and UI (User Interface).

• After facing competition from iOS and Android, Nokia continuously tried to improve their Symbian OS but was not creating something unique.

• In 2008, brands like Samsung, HTC, and Sony found roots to extend their market.

• Samsung's Android phones are user friendly and budget friendly too.

• When every manufacturer was busy in making touchscreen mobiles, Nokia felt that touch wouldn't have a scope in the near future but customers overwrote their expectations.

THE AFTER-EFFECTS

• Stiff competition from Samsung and Apple.

• Nokia seemed to be lagging in the race.

• Where Samsung from nowhere entered the race and focused on innovation as its core competence to gain market share, Nokia was very late to realize this fact.

• Nokia not only failed to realize competition from Apple, Samsung, Sony, Blackberry in high end smart phones, but they also failed to notice the stiff competition in the lower segments of phones.

• The company which used to have epic models like Nokia 1100 suddenly started losing at lower ends too.

Strategies used by nokia to overcome this situation

• A strategy change became necessary in the face of declining market share, caused by intense competition from its rivals in the smartphone space.

• The cost of porting Symbian to new hardware and developing the next generation of the platform limited the effective life of Symbian. Nokia had already realised this and was positioning MeeGo as a successor.

• MeeGo is not yet ready yet. The risks involved in Nokia waiting for MeeGo to be ready are perceived to be greater than switching to another platform.

• It is becoming difficult for one company to do everything (hardware design, manufacturing, operating system, applications, developers, location, content services, advertising, etc.)

• Windows Phone offers a modern UX/UI with good underlying technology. However it has significant holes in its feature set that will need to be addressed.

• The agreement with Microsoft and the use of Windows Phone allows Nokia to differentiate its devices from its main Android and iOS powered rivals.

• Nokia and Microsoft are well positioned to jointly build a viable and competitive mobile ecosystem in which both companies have a near-equal equity stake. 

• Nokia's decision to switch to Windows Phone was primarily driven by the need for a competitive, viable and sustainable ecosystem, rather than any concerns with the underlying technology (operating system). 

What was wrong in the company’s reaction?

• Very lately did the company woke up and launched their Asha series but by that time they had already lost the game.

• Moreover, Nokia was strictly against adapting to the android platform.

• Thus, in an effort to survive the competition, the company came up with the N series.

• But no matter what, the N series failed to create the buzz among the customers which Apple could do.

• The company made the biggest mistake to take a leap of faith in Windows in 2011.

• At that point of time, the company already was in declining condition and trusting Windows which was new in the field to regain its status was the biggest mistake the company made.

• All these phones which the company launched were comparable to other competitor devices but OS was the problem which lead to ultimate collapse of company.

• Lack on focus on innovation was the second big reason of collapse.

NOKIA N Series

Market positions

REASONS WHY NOKIA FAILED

• Nokia’s development process was long dominated by hardware engineers; software experts were marginalized.

• Whereas, executives at Apple, in stark contrast, saw hardware and software as equally important parts of a whole; they encouraged employees to work in multidisciplinary teams to design products.

• It also underestimated how important the transition to smartphones would be. It took the competition too lightly.

• Nokia overestimated the strength of its brand, and believed that even if it was late to the smartphone game it would be able to catch up quickly.

• Nokia failed to respond to the iPhone and the shifting consumer demand that came with it. As the years passed, the Symbian platform aged, and that age really showed when compared to iOS and also Android.

• Samsung chose Android at the right time, and it benefited from the maturation of that platform. Nokia, on the other hand, spent its time focusing on Symbian until the company’s recent partnership with Microsoft.

• But Nokia’s flagship Lumia Windows Phones haven’t paid off yet.

• It was a good partnership on paper, but it was too late — over two years after the introduction of the iPhone and Android picked up market steam.

• Nokia didn’t market itself as an innovator, and frankly, it hasn’t been doing much innovating anyway. At least not until it entered the Windows Phone space.

SUGGESTIONS/WHAT ELSE COULD HAVE BEEN DONE• Long after the iPhone’s release, in fact, Nokia continued to insist that its superior hardware designs would win

over users, which was a very wrong assumption. Instead, Nokia should have focused on the software side too.

• Instead of marginalizing the software experts and giving all attention the hardware domain, it would have been better if Nokia considered both as of equal importance.

• Even today, there are people who claim that if Nokia had stuck with its own operating systems, instead of embracing the Windows Phone in 2011, it could have succeeded.

• But even though the Windows Phone has been a flop, the truth is that, by 2010, Nokia had already introduced too many disappointing phones, and its operating system had already proven too buggy and unworthy to win consumers over.

• Thus, the best possible alternative Nokia could have gone for is that it should have adapted to the android platform.

THANK YOU!!!