Wednesday, February 16, 2011

Is it too late for Nokia

The Finnish giants recent move to appoint a Canadian to head their business has been hailed by many as timely. My concern is that it may be too late. You see the first handset I ever owned was a Nokia 3210 and what appealed to me then was the modern styling. Ok, I couldn't afford the Ericsson T18s, but who could question the 3210's innovative antenna free design. Apart from a brief flirtation with a tiny clam-shell Motorola, my love affair with Nokia continued for the next 6 years or so. A little like what happens in marriage I started to notice that Nokia models kept getting chunkier and chunkier while their rivals got slimmer and lighter. Understandably Nokia's popularity started to wane as people like me strayed from their warm embrace.

What went wrong?


I have a taken a very simplistic approach and compared Nokia’s global market share with Samsung’s in 2003, 2007 and 2009. Nokia went from 34% to 40% and then back to 34%. Samsung’s share on the other hand went consistently upwards from 10% to 15% to 20% during the same period. Clearly something was going horribly wrong with Nokia’s business strategy. How could an unknown upstart gain so much ground in an industry as competitive and capital intensive as mobile telephony? The answer is quite simply by focussing on the customer. I know it sounds like a cliché, but the customer is and always should be the focal point of every business. All Samsung did was listen very closely to what users wanted and developed phones that had more features than Nokia at lower prices. In business, it doesn’t matter how good you think your product is, if you want to succeed just give customers a little more than what they want at the slightly less than they were willing to pay. That way you win their hearts as well as their minds and that is the stuff that builds loyalty.

Closer to home

The handset I have in my pocket now is an aging dual-sim Samsung with a creaky touch screen. Old it may be but it still has all the things I need in one small(ish) package. Now that the time has come (reluctantly) for me to upgrade to a 3G smart phone, one thing I can assure you is that I am not about to hold my breath waiting for Nokia’s android phone to come out before I go shopping.

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