from the ceo to the office boy, from the business tycoon to the paan waala, from urban to rural; mobile handsets have travelled a great distance in india, and so has nokia. but thanks to the latest twists in the tale, nokia may need to adapt quite a bit very soon
The ‘Black & White’ era went into decline mode in India way back in 1982, when the first colour TV sets were introduced on the occasion of the Asiad Games (movies were already in colour, though; interestingly, India’s first indigenously produced colour film was Kishan Kanya; way back in 1937). But the ‘grey’ era continues to be strong till date. Not on your screens, my friend, but in markets. Ask the MNCs and they will recount, in horror, countless stories on how the grey market has, time and again, wreaked havoc with their plans.
And that was just the beginning of Nokia’s quagmires when it entered the Indian market in 1995. It was a market where mobile phones and services were a luxury item. With the prices that these models commanded, you could get a decent second hand Fiat car in those days!
There were a few key planks on which Nokia played its cards, and played them well. Firstly, they developed phones specifically for the Indian market, with durability to withstand Indian conditions and features like torch, vernacular SMS, news feeds, et al. Also, with other players like LG, Sony and Samsung being perceived as diversified consumer electronic companies, Nokia scored heavily on the fact that it had a core focus on mobile phones & developed strong brand equity.
Also, it developed phones for all price points. They backed this up with an intensive distribution strategy and were greatly helped by the tie up with HCL Technologies. “We realised that one of the main challenges was the geographical spread of the consumer and hence we invested extensively towards overcoming this challenge,” reveals Vineet Taneja, Director, Marketing Nokia India. Little wonder that Nokia phones are available across almost 2 lakh outlets in India, and span from telecom outlets to watch stores, even local kirana outlets. This Finnish mobile giant realised that focusing only on urban Indian consumers would not help it realise the vision that it had set for itself. Hence it made a conscious effort to reach out to the rural consumer through micro financing options. Nokia vans visit tier 3 & 4 cities and villages to demystify the use of mobile technology and also gain business. As a result of these endeavours, Nokia today has a retail point within every 5 km, or for every 20 sq. km. And with over 400 million subscribers already in the market, Nokia commands a formidable 64% share.
However, it would not be wrong to say that Nokia’s best times are now behind it in India. Mobile phone penetration is reaching its zenith, and growth rates are expected to head downwards in a few years. Also, players like Samsung, ZTE and other branded and unbranded players have developed strong entry level portfolios and have already started to snatch some share from it. It is visible when you see that Nokia used to have a market share of over 75% till a few years back. Another concern could be the smartphone segment. With 3G making inroads in the country, a sudden surge is anticipated in smart phones. Globally too, Nokia is not very strong in this category with players like Apple iPhone, research in Motion’s BlackBerry and Palm ruling the roost, but the company believes that its latest offering N 97, could spring a surprise. Unfortunately, global markets haven’t agreed so far. It is the first device that comes in with Nokia’s application software Ovi (meaning door in Finnish) pre-loaded, so its progress will be interesting to watch. That brings us to the next big challenge. As mobile phone growth slows down, Nokia will have to now rely on the power of its software more and more in order to drive revenue growth in the future. So Ovi could play a major role. But here too, it will have to compete with Apple’s App Store (which has a much wider portfolio of offerings), as applications could increasingly become a major factor of consideration for people buying cell phones. ‘Connecting people’ sure isn’t like it used to be!
The ‘Black & White’ era went into decline mode in India way back in 1982, when the first colour TV sets were introduced on the occasion of the Asiad Games (movies were already in colour, though; interestingly, India’s first indigenously produced colour film was Kishan Kanya; way back in 1937). But the ‘grey’ era continues to be strong till date. Not on your screens, my friend, but in markets. Ask the MNCs and they will recount, in horror, countless stories on how the grey market has, time and again, wreaked havoc with their plans.
And that was just the beginning of Nokia’s quagmires when it entered the Indian market in 1995. It was a market where mobile phones and services were a luxury item. With the prices that these models commanded, you could get a decent second hand Fiat car in those days!
There were a few key planks on which Nokia played its cards, and played them well. Firstly, they developed phones specifically for the Indian market, with durability to withstand Indian conditions and features like torch, vernacular SMS, news feeds, et al. Also, with other players like LG, Sony and Samsung being perceived as diversified consumer electronic companies, Nokia scored heavily on the fact that it had a core focus on mobile phones & developed strong brand equity.
Also, it developed phones for all price points. They backed this up with an intensive distribution strategy and were greatly helped by the tie up with HCL Technologies. “We realised that one of the main challenges was the geographical spread of the consumer and hence we invested extensively towards overcoming this challenge,” reveals Vineet Taneja, Director, Marketing Nokia India. Little wonder that Nokia phones are available across almost 2 lakh outlets in India, and span from telecom outlets to watch stores, even local kirana outlets. This Finnish mobile giant realised that focusing only on urban Indian consumers would not help it realise the vision that it had set for itself. Hence it made a conscious effort to reach out to the rural consumer through micro financing options. Nokia vans visit tier 3 & 4 cities and villages to demystify the use of mobile technology and also gain business. As a result of these endeavours, Nokia today has a retail point within every 5 km, or for every 20 sq. km. And with over 400 million subscribers already in the market, Nokia commands a formidable 64% share.
However, it would not be wrong to say that Nokia’s best times are now behind it in India. Mobile phone penetration is reaching its zenith, and growth rates are expected to head downwards in a few years. Also, players like Samsung, ZTE and other branded and unbranded players have developed strong entry level portfolios and have already started to snatch some share from it. It is visible when you see that Nokia used to have a market share of over 75% till a few years back. Another concern could be the smartphone segment. With 3G making inroads in the country, a sudden surge is anticipated in smart phones. Globally too, Nokia is not very strong in this category with players like Apple iPhone, research in Motion’s BlackBerry and Palm ruling the roost, but the company believes that its latest offering N 97, could spring a surprise. Unfortunately, global markets haven’t agreed so far. It is the first device that comes in with Nokia’s application software Ovi (meaning door in Finnish) pre-loaded, so its progress will be interesting to watch. That brings us to the next big challenge. As mobile phone growth slows down, Nokia will have to now rely on the power of its software more and more in order to drive revenue growth in the future. So Ovi could play a major role. But here too, it will have to compete with Apple’s App Store (which has a much wider portfolio of offerings), as applications could increasingly become a major factor of consideration for people buying cell phones. ‘Connecting people’ sure isn’t like it used to be!
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