- Mr.B.Prem kumar

ESTABLISHMENT OF NOKIA

• FOUNDER WAS FREDRIK IDESTEM.

• PREVIOUSLY STARTED AS PAPER, RUBBER AND CABLE INDUSTRY.

• IN YEAR 1967, ELECTRONIC SECTION WAS FOUNDED.

• IN LATE 1970’S, NOKIA INVOLVED INTO TELECOMMUNICATION INDUSTRY.

THE FIRST DIGITAL SWITCH USED BY NOKIA

ONE OF THEIR PHONES IN LATE 1970-1980’S.

GROWTH

• EARLY INVESTMENT IN GSM TECHNOLOGIES MADE THE COMPANY THE LARGEST MOBILE PHONE MANUFACTURERS.

• BETWEEN 1996 TO 2001, NOKIA’S TURNOVER INCREASED FROM £6.5 BILLION TO £31 BILLION.

• THE GROWTH CONTINUED AT ITS PEAK UNTIL 2011.

NOKIA’S BEST SELLING PHONE WORLDWIDE

OPERATING SYSTEM• SYMBIAN WAS NOKIA’S SMART PHONE

OPERATING SYSTEM UNTIL 2011.

• NOKIA USED LINUX IN SOME INTERNET TABLETS AND IN THE NOKIA N900.

• BY THE END OF 2011, NOKIA GOT INTO AN ALLIANCE WITH WINDOWS AND ANDROID.

LOSS OF MARKET SHARE

• IN 2007, OFFICIAL LAUNCH OF iPHONE CONTINUED TO BE OUTSOLD.

• IN 2010, DRASTICALLY THE SHARE OF MARKET DROPPED WHEN ANDROID AND iOS CONTINUED TO GAIN THE MARKET SHARE.

• SYMBIANS SHARE IN THE MARKET DRIPPED TO 32% BY 2010.

CORPORATE AFFAIRSNokia Leadership Team (as of May 2014)Rajeev Suri (Chairman), b. 1967President and CEO since 1 May 2014Joined Nokia on 1995

Samih ElhageExecutive Vice President and Chief Financial and Operating Officer of Nokia NetworksJoined Nokia Networks 2012Michael Halbherr, b. 1964CEO of HEREJoined Nokia 2006, Nokia Leadership Team member since 1 July 2011Timo Ihamuotila, b. 1966Executive Vice President and Group Chief Financial OfficerWith Nokia 1993–1996, rejoined 1999, Nokia Leadership Team member since 2007Henry Tirri, b. 1956Executive Vice President and Acting Head of Nokia TechnologiesJoined Nokia 2004, Nokia Leadership Team member since 22 September 2011

ALLIANCE WITH ANDROID AND WINDOWS

• LAUNCH OF LUMIA CAME INTO EXISTENCE IN 2011.

• SOME PHONES IN NOKIA CAME WITH ANDROID OPERATING SYSTEM.

• ALLIANCE HELPED IN INCREASE IN SALES.

FINANCIAL DIFFICULTIES

• In 2012, Nokia shut down its production and research sites in Finland, Germany and Canada.

• By the end of 2013, 24,500 employees were laid off.

• Company’s inability to foresee the rapid changes in mobile industry were on of their problems.

SALE OF BUSINESS TO MICROSOFT

• ON 2ND SEPTEMBER 2013, MICROSOFT ANNOUNCED A DEAL WORTH €3.79BN, ALONG WITH ANOTHER €1.65BN TO LICENSE NOKIA'S PORTFOLIO OF PATENTS FOR 10 YEARS, A DEAL TOTALLING AROUND €5.4BN. ($.7.1 billion)

• MICROSOFT ACQUIRED ASHA AND LUMIA BRANDS.

• THE FUTURE LUMIA DEVICES ARE BRANDED WITH MICROSOFT’S NAME AND LOGO.

SOME OF THE MICROSOFT PHONES

LUMIA 535 LUMIA 830

LUMIA 1520

Downfall of Nokia

A glance look!

Why Nokia failed?• One of the giants in mobile manufacturers sold

itself to Microsoft. Is it a sign of failure or its inability to maintain a firm. No doubt its a failure to properly manage.

• So, why do you think Nokia failed? • Be attentive to know the reasons behind failure

of Nokia's marketing strategy and what can be learnt from it.

How Nokia failed in connecting 'to' people?

• Apple redefined smart phones with touch screen and Blackberry with email. Android proved that software matters more than hardware. 

• Nokia was slow to respond to these trends.

• In India, local brands stole the lead on dual SIMs, low-end Qwerty and long-battery-life phones.

• In a nutshell, that's how Nokia, which enjoyed a 60% market share in India, ended 7-9% as per IDC Asia Pacific Mobile Tracker in Q4 2012.

Android weakened roots of Nokia?• 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 is busy in making

touchscreen mobiles, Nokia felt that touch wouldn't have a scope in the near future but customers overwrote their expectations.

• Nokia's entrance into Windows platform is quite late

• Finally Nokia gave up for a $.7.1 billion to Microsoft. 

Mistakes that lead to Nokia Failure

1. Failure of Symbian OS:

• Nokia launched its Symbian 60 series in year 2002 which initially had a good market response.

• The introduction of Apple iOS in 2007 and Android in 2008, 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.

2. Wrong Deal with Windows• Customers were waiting for Android phones from

Nokia. But 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.

3. NOKIA Became Laggard in Smartphone Market

• Stiff competition from Samsung and Apple.

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

• 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 the market share, Nokia was very late to realize this fact.

Below is the diagram showing how sales dipped Below is the diagram showing how sales dipped from Q4 in 2010 to Q4 in 2012.from Q4 in 2010 to Q4 in 2012.

4. Losing Market Share on Both Ends

• Nokia not only failed to realize competition from Apple, Samsung, Sony, Blackberry in high end smart phones, 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.

• Very lately company realized this thing and

launched their Asha series but by that time they had already lost the game.

5. Failure to Implement the Right Umbrella Branding Strategy

• Apple was the first phone to use the strategy of umbrella branding using iPhone as an umbrella brand and then building subsequent models each year.

• Samsung was quick in identifying this concept and they started building their high end phones with Galaxy S series.

• Nokia on the other hand used to have used an umbrella brand in the N series and recently the Lumia series, but they failed to create buzz among customers which Apple created.

• The company which is missing the constant innovation has the high probability of getting punished from the customer.

SWOTStrength

Experience

Largest network of selling & distribution

Strong customer relation

Wide range of products for all class

Weakness

Low voice quality

Less stylish in low priced products

Heavy sets

Unlike iPhone Apple, Nokia N-series is complex, tough and not user friendly

Opportunities

New growth markets

Concentrate on Smartphones

Well designed and styled set

Mini notebooks

Threats

China mobiles – It has made exact copy of Nokia

Competitors like Samsung & Apple

Sales may decline due to global economic downturn

Standard & Poor downgraded Nokia with low grade

SWOT Cont...SWOT Cont...

Journey towards failureYear 2006:

Nokia is on a high. It was enjoying 60% share of India's mobile market and was the undisputed lead.

Year 2007:

June 29 • Apple launched iPhone 3s. • Redefined smart phone and challenged category

leaders like BlackBerry and Nokia. 

Year 2008

MarchMicromax came up with handset business in

India.SeptemberSamsung launched Omnia. Became dominant in

touch screen phones globally.

Year 2009

JuneGoogle’s Android entered Indian market with the

help of HTC Magic and Vodafone at Rs.29,990.

Year 2010

June• Samsung launched Galaxy S in India at

Rs.31,500, its first smart phone. • Later, Galaxy-3 (Rs.12,300) & Galaxy-5

(Rs.10,200). • Samsung's smart phone sales surge. 

August 30• Nokia launched C1 & C2 phones • Nokia market share in India for 2010 (Jan-

Sept), according to IDC, crashes to 32.9%

Year 2011

February• Nokia announced Microsoft patnership, but it took 8-9 months to unveil

products.

• Meanwhile, Samsung consolidated position while Micromax, Karbonn, Lava, Spice and launched cheaper smartphones.

March• iPhone 4. The iPhone changed the industry in more ways than

one: apps, superlative design and accessories. • But Nokia was still struggling to find traction with Windows.

June• Nokia launched dual-SIM phones, became no.1 player in this

space, but it was 18 months late. This delay cost Nokia.

NovemberSamsung's Galaxy Note, iPhone 4S launched. 

December• Nokia's Lumia 800 (Rs.29,000)• Lumia 710 (Rs.19,000) launched. • Samsung's cheapest Galaxy at Rs.7,830; strengthend position

in the low-end smartphone space.

Year 2012JanuaryNokia fought back. Launched first Asha, 200 for Rs.4,400. It is

its first QWERTY dual-SIM device. Strong product, but dual-sim market is past its peak.

JuneFull-Touch Asha 305 launched. Nokia claimed it's largest-selling

smartphone; but rivals and some tracking agencies don't consider Asha a smartphone. 

SeptemberNokia Market share is 22.2 % and 19.2% in smartphones.

NovemberiPhone 5 launched.

DecemberSamsung's India Galaxy sales count crosses 1 crore.

Year 2013Year 2013Nokia's market share dwindled down to 7-9% as per IDC Asia

Pacific Mobile Tracker in Q4 2012.

MarchLumia 520 (Rs.10,000) launched but Samsung, Micromax

moved ahead.

Thank you

- King Prem Kumar