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Nokia on the Global Market: How to Compete with Other Companies?

Nokia on the Global Market: How to Compete with Other Companies?. Cissy Aixi Xu. Agenda Introduction Background Information Problem of Nokia Benchmarks Apple Inc. Samsung Recommendation Shareholder Concerns Conclusion. Introduction Lost mobile sales since April 2010

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Nokia on the Global Market: How to Compete with Other Companies?

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  1. Nokia on the Global Market:How to Compete with Other Companies? Cissy Aixi Xu

  2. Agenda • Introduction • Background Information • Problem of Nokia • Benchmarks • Apple Inc. • Samsung • Recommendation • Shareholder Concerns • Conclusion

  3. Introduction • Lost mobile sales since April 2010 • Background Information • Current situation of global smartphone market • Current situation of Nokia • Current situation of other main companies • Profit margins for smartphones

  4. Current situation of global smartphone market • 25% of worldwide mobile sales • Table 1 • “Worldwide Smartphone Sales to End Users by Operating System in 2Q11” • (Thousands of Units) http://www.gartner.com/it/page.jsp?id=1764714

  5. Table 2 “Worldwide Mobile Device Sales to End Users by Vendor in 2Q11” (Thousands of Units) http://www.gartner.com/it/page.jsp?id=1764714

  6. Calculation: • Plays an important role

  7. b. Current situation of Nokia “Worldwide Mobile Device Sales to End Users byNokiain 2Q11” (Thousands of Units) http://www. gartner.com/it/page.jsp?id=1764714 • 7.5% decrease in worldwide mobile sales • Huge decline of smartphone market share: • 27.5% Dec. 2010 to 15.5% Sep. 2011

  8. 27.5% Dec. 2010 15.5% Sep. 2011 http://www.allaboutsymbian.com/news/item/13121_Nokia_Q2_2011_results-smartpho.php

  9. c. Current situation of other main companies • Six main manufacturers of smartphones: • Nokia, Apple, RIM, Samsung, HTC, and Motorola • Increase rapidly: Apple, Samsung, HTC http://www.allaboutsymbian.com/news/item/13121_Nokia_Q2_2011_results-smartpho.php

  10. d. Profit margins for smartphones • Top-end smartphone: 36% • e.g. Apple’s iPhone • Mid-end smartphone: 1% -15% • e.g. Nokia: 1. Mid-end & low-end smartphone • 2. Big volumes & lower revenue

  11. Problem of Nokia • Worldwide mobile sales declined quickly • Not improve technology of Symbian system • No powerful top-end smartphone • Weaker than its competitors

  12. Benchmarks • Apple Inc. • Fastest selling top-end smartphones of all time • Touch screen, advanced features, and minimal hardware • 2Q11: 19,628 thousands of units • 2Q10: 8,743 thousands of units • Development of iSO technology • Release new phone on every year: • iPhone to iPhone 4S (since 2007) iPhone 4S

  13. Benchmarks • Samsung • Second highest percentage of global mobile sale • Refresh system • Select with latest innovations and most popular features • Become first main manufacturer • Galaxy phones with Android system (2010) Samsung Galaxy S II http://news.cnet.com/8301-13579_3-57318644-37/samsung-outshines-apple-in-smartphone-shipments-market-share/

  14. Recommendation Changing focus on top-end smartphone New Windows phone with new technology Keeping basic phone market

  15. 1. Changing focus on top-end smartphone • Large sales on basic phone & low-end smartphone • Need top-end smartphone • Attract more top-end smartphone customers

  16. 2. New Windows phone with new technology • New Windows phone • On Feb. 11, 2011 • began its partnership with Microsoft • Nokia: hardware • Microsoft: Microsoft Windows Phone software • Aim at top-end & mid-end users: Lumia 800 & Lumia 710 • Powerful combination

  17. 2. New Windows phone with new technology • First Advantage: • Having a top-end smartphone to compete • Can succeed at top-end & mid-end market, • Then reclaim the leadership position

  18. 2. New Windows phone with new technology • Second Advantage: • Open doors to four largest U.S. operators • U.S. operators: control > 90% of phone sales • Acquirers of smartphone increase quickly (U.S.) • U.S. smartphone market: world’s largest http://blog.nielsen.com/nielsenwire/online_mobile/in-u-s-smartphone-market-android-is-top-operating-system-apple-is-top-manufacturer/

  19. 2. New Windows phone with new technology Second Advantage: to U.S. smartphone market d) Nokia: only 2% smartphone market share e) Windows Mobile/WP7 Phones: only 8% shares • Good opportunity to entry U.S. market http://blog.nielsen.com/nielsenwire/online_mobile/in-u-s-smartphone-market-android-is-top-operating-system-apple-is-top-manufacturer/

  20. 3. Keeping basic phone market • 75% basic mobile sales • Large number of Customers: basic & low-end market • New Phone: need time to be accepted • Keep Symbian system & not lose existing customers

  21. Shareholder Concerns Q: Why not stick with the Symbian system and improve upon it? A: The system 1. cannot be improved based on technology 2. cannot refresh with the latest innovations 3. cannot make more profit 4. cannot compete with other top-end smartphone

  22. Conclusion • Earn more Smartphone market shares • More competitive • Play an important and consolidated role • Need long time • too late to enter top-end smartphone market

  23. Questions?

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