One way of looking at Nokia’s falling market share in India (from 70% in the early 2000s to 64% in 2008-09 and further to 52.2% in 2009-10, as reported in Mint on Wednesday) is from an it-had-to-happen perspective. After all, few companies can boast of having held on to a little over two-thirds of a market for as long as Nokia did. And 52% (52.2% actually) isn’t an insignificant share. Few market leaders in any category, in India or elsewhere in the world, can claim to control half the market in a category as vibrant, diverse and fast-growing as mobile phones.
Still, while Nokia has made some of the most enduring mobile phone models—the 5110 or the original mini-brick with an antenna sticking out, for instance; or the 6680, which was the first camera phone to really make it big—it has also consistently missed several design and usage trends, and then scrambled to catch up, not always successfully.
For instance, the company ignored the clamshell phone segment, until it was too late (though this eventually turned out to be a passing phase of the market); and launched and pushed QWERTY and touch-screen phones well after others had.
The company’s problems in India—and this has to be borne out by data which isn’t readily available—would appear to be symptoms of the being-caught-in-the-middle trap. This is where a company operating in a market finds itself being squeezed from both sides—at the lower end, where profits are slim but volumes huge, and at the higher end where profits are big, and volumes low. It’s easy to see where Nokia fits into this. At the low end of the market, it faces severe competition from local players, some of which import phones or phone assemblies from China. Some of these local players have grown significantly over the past year, largely at the cost of Nokia. To be sure, Nokia can’t be blamed for this—no one in their right minds would have given the likes of Lemon and Lava and Micromax and Karbonn a chance a year or 18 months ago.
And at the high end, the iPhone and top BlackBerry handsets have stolen a march over the Finnish company in the smartphone segment (though we have heard talk of a coming iPhone killer from Nokia).
None of this is a problem that a best-selling phone (or two) won’t fix. The trouble is that Nokia really hasn’t been able to find one such in recent times.
How did Nokia get it wrong in the Indian market? Tell us at email@example.com