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Nokia vs North American Market

March 29, 2009

North America … considered the untapped market for smartphone growth.

However, due to the struggling economy, growth dropped to its slowest pace during the fourth quarter in 2008. Gartner’s study shows that worldwide sales, although increased vs 4th QTR 2007, its still down from previous estimates; with Nokia loosing marketshare.

Egham, UK, March 11, 2009 — In the fourth quarter of 2008, worldwide sales of smartphones to end users reached 38.1 million units, an increase of 3.7 per cent on the fourth quarter of 2007, according to Gartner, Inc. Global sales of smartphones for 2008 reached 139.3 million devices, up 13.9 per cent compared with 2007.

“After a strong third quarter with new product introductions, sequential growth slowed down again in the fourth quarter as fewer compelling new products and the worsened economic climate continued to make data plans associated with smartphones out of reach for most consumers,“ said Roberta Cozza, research director at Gartner. “In general in 2008, the focus from vendors and operators on increasing their smartphone portfolios remained very strong. Samsung, RIM, HTC and Apple saw their volumes and share increase during 2008 (see Table 2), thanks to their ability to offer compelling device experiences and touch interfaces.”

Nokia, still king in the worldwide smartphone share & sales race … an ongoing race, is loosing due to a significant market they’ve traditionally ignored or never really cared about in depth. North America – Canada their fairing better with deals on products/services – has different targets (actually almost non to speak of save); either consumer’s which include new starters & high end professional users, and Enterprise which includes all forms for professional collaboration support.

Nokia, all their executives are very intelligent, educated, and professional people. However, I think its time that a few of them fully test a device (not just for quality control) but fully use the device. Allow S60 Ambassadors, to test devices and finally have a small focus group of 30-50 users whom have never used an S60/Symbian based device before test an early buid of upcoming products. WE NEED their feedback on how they use the device – better or for worse! We need to have more touchscreen devices that suit the giddy masses – but do NOT get rid of Ovi Services & expand a new paradigm on Comes with Music.

Table 1
Worldwide: Smartphone Sales to End Users by Vendor, 4Q08 (Thousands of Units)


4Q08    Sales

Market    Share  4Q08 (%)

4Q07   Sales

Market    Share  4Q07    (%)

4Q07-4Q08 Growth   (%)







Research In Motion




































Note: Under the name HTC, Gartner counts only the company’s own-branded devices. The devices that HTC designs for mobile operators are shown separately under the operators’ names in these statistics.
Source: Gartner (March 2009)

For any product or service to reach its intended audience, you need to make them aware of it! All too often advertisement from Nokia is focused on all of Europe, Asia and South America, leaving North America unattended. This is the sole reason for why 1-3 S60 products are ever available on contract direct from any 1 of providers in North America. Currently 6650, N95-4, and E71-2/x, is offered on Rogers Wireless, AT&T Wireless, West or other providers. The same thing occured when S60 2nd Ed FP2/3 devices launched: 6600, NGage QD, 6620, then the 6682.

Nokia has made great headway with Rogers Wireless since the launch of the Nokia N95-4 back in March 2008, getting a heavy push of that products features and Rogers allowing it be used on their $7/mth unlimited data pkg – intended for on device browsing. Since then Nokia & Rogers announced support for N-Gage, Ovi Services to work through their various data packages, launched the E71-2 (which I choosen again), Nokia Maps, and soon Nokia Messaging soon.

I’d like to highlight a specific quote from the same source. I wish to do this to show just how important making contractual agreements, working together to serve a target market, and joint advertisement is to the North American marketplace.

“The Canadian telecom market is going through tremendous change and consumers are increasingly demanding advanced multimedia devices and services,” said Richard White, general manager and head of country operations for Nokia Canada. “Through this agreement with Rogers we are excited to deliver on that need, offering consumers compelling experiences on Nokia’s devices delivered over Rogers’ wireless high-speed network.”

In Canada we have just over 37million residents/citizens in our total population. The United States, easily multiplies this by 10 times. So how is it possible that such an agreement with Rogers Wireless is possible, yet seemingly close to impossible to attain with AT&T. I think its time for Nokia USA design devision to consider making a high & mid range S60 device for T-Mobile USA supporting their AWS 3G Network; before they get too close & married to HTC.

However, Nokia is seemingly making headway with Marketing in Europe … a SIGNIFICANT win really. Orange & Nokia signed a content partnership deal. This deal ALONE will help Nokia sales figures and show the world just how their users & future users will enjoy Ovi Services.

The three-year partnership includes the addition of 10 new Nokia handsets to the Orange Signature range and the addition of music to a combined offer of games, advertising, maps and location-based services.

Orange and Nokia have agreed to launch a suite of integrated multimedia services on the new Nokia handsets, launching in H208 across nine major markets, in an initiative designed to boost the adoption of mobile digital entertainment.

Olaf Swantee, EVP of Orange’s personal communications services, said: ‘This collaboration underlines Orange’s drive to create strategic partnerships that will give customers the best possible mobile multimedia experience in the simplest way.’

Kai Öistämö, EVP of devices at Nokia, said: ‘We are pleased to create this strategic partnership with Orange and believe that the combination of Signature and Ovi services will extend and enrich consumer choice.

‘We also expect our close collaboration to extend beyond the initial focus areas of music, games, maps and advertising to include other services over time.’

Under the agreement, the two companies will work jointly on marketing to support the launch of new devices and the development of multimedia applications. The two companies plan to create 10 million active Mobile Maps users on Nokia devices within the Orange footprint by 2010.

Also announced on Friday, Nokia made an announcement that immediately goes into affect, sending shockwaves to subcontractors of manufacturing their products.

HELSINKI (Reuters) – Nokia’s (NOK1V.HE) pull-back from using subcontractors in phone-making will shed more than $5 billion in revenue from electronics contract manufacturers, research firm iSuppli said on Friday.

The world’s top cellphone maker Nokia said on Thursday it has fully stopped using subcontractors in manufacturing of its mobile phone engines, which include the phone and software that enable its basic operations.

“This announcement clearly illustrates just how severe the situation in the mobile handset market really is,” iSuppli analyst Adam Pick said in a statement.

Due to Nokia’s decision, iSuppli said it would cut its view for the electronics subcontracting market, which it has earlier forecast to shrink 10 percent in 2009 to $270.8 billion.

In 2008, Nokia outsourced about 17 percent of the manufacturing volume of its mobile phone engines, which include the phone and software that enable its basic operations.

Nokia’s key subcontractors have been Foxconn (2038.HK), China’s BYD (1211.HK), Jabil Circuit (JBL.N) and Elcoteq (ELQAV.HE).

This announcement will hopefully have a 2 fold impact on their products. Better quality controls of products carrying the Nokia brand-name. Reduction of production costs in the long run; not immediately of course. A side affect is that its possible that Finnish employees of Nokia may be able to keep their jobs – since S60 fans all know that Made In Finland has a quality above all others.

Personally I don’t think this is just solely a cost & expense numbers consideration. Taking the success of the E71, and putting its key design queues & features into the likes of upcoming products: E55, N86, N97, E75, its quite possible that these subcontractors cannot duplicate the build quality & maintain it through quality controls for all these models over a large production run.

Nokia must be aware that marketing tactics that work in Europe do not work the same in North America. It must know without a doubt that its Brand is just as powerful as Apple’s is in the computer space. Previous web marketing campaigns are forward thinking and simply amazing! I’d like to see this transfered into how its products can be used everyday by various people, whether they be a lawyer, doctor, student, professional sports player, actor, or a professional musician/singer/writer/producer. North Americans love to be shown something with appealing beauty, great functionality – that suits THEM – and then show the brand at the end.

Nokia has a unique opportunity to capture the North American market by showing how their products & Ovi Services work in harmony and how 3rd party developers wares can help Nokia in … Connecting People. The competition is scrambling to do just this … and if Nokia waits till they launch & advertise this before they begin to do the same – in partnership with providers – then Nokia’s top executives will have more to think about. No more can they rely on previous sales figures and entrench user base – because those users are considering other options, and new users into the marketplace – sub 20 year olds are the new trend setters and with new corporate jobs they have the cash to spend. Nokia should consider those in high class or famous people to market their products (start with the N97, N86, and E75).

On a regional level, the North American smartphone market continued to grow, despite the larger economic problems. Smartphones account for roughly 20 per cent of sales in this region, a dramatic increase over the past year. Smartphone sales in North America grew 69 per cent in 2008. While sales will grow at a slower pace, the market will be driven by support from operators in the region aggressively pushing data plans. Smartphones will also see increased competition from full-featured enhanced phones that may offer a full qwerty keyboard. These devices offer much of the functionality of a smartphone, but at a lower price.

Smartphone sales in Asia/Pacific recorded a 2.3 per cent sequential growth, reaching 7.5 million unit sales, even though overall mobile device sales dropped by 9.2 per cent. The drop in overall sales was attributable to weak consumer confidence, but sales of high-end devices remained good, leading to positive sequential growth for smartphones. Market leader Nokia lost market share marginally by 2 per cent to Apple. Others that gained in the region were RIM and Samsung. Touch-based devices continued to attract consumers in this segment.

Smartphone sales in Europe, the Middle East and Africa (EMEA) were up by only 2 per cent in 4Q08 compared with the same period last year. Despite replacement purchases slowing down in Western Europe, smartphone sales still recorded a 9.6 per cent increase in the region. Samsung was the main contributor to the growth in Europe thanks to the success of its Omnia touchscreen smartphone. Samsung’s share nearly tripled during the fourth quarter of 2008 and the strong push of its touchscreen offerings in EMEA put pressure on HTC.

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