Nokia Is Fading In All Segments & Even In Emerging Markets

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Helsinki based Nokia handsets, which used to be darling of majority of handsets users, is not receiving any good news from any quarter. Nokia is in advanced talks to sell its UK subsidiary Vertu to private equity group Permira, the Financial Times reported. Vertu makes some of the most expensive cellphones in the world by hand, which can feature crystal displays and sapphire keys. Nokia is expected to raise about 200 million euros  from a potential sale, the FT said in a piece published on its website on Sunday.

Even, loyal users and sellers of Nokia handsets are switching their loyalties to other vendors like Samsung and Apple. Although Nokia has come out with Windows mobile operating software yet it cannot give competition to Android smartphones especially of Samsung, which are far ahead of Nokia, and Nokia is late entrant to smartphone segment. Nokia has already missed smartphone bus.

In India, the world’s second-biggest mobile phone market, with more than 900 million subscribers, Nokia’s market share has halved in the three years to 2011, when it sold 31 per cent of the total 183 million handsets sold, according to Indian researcher CyberMedia. Analysts say it has failed to keep up with the changing tastes of the growing middle class. Moreover, Nokia is not as aggressive in promoting its products as its Korean counterpart- Samsung.

In China, the world’s largest cellphone market, operators have started to play a bigger role in selling phones, and that trend is working against Nokia. Service providers in China have started giving preference to locally made handsets of ZTE and Huawei over international brands. In January-March its sales in China shrank 62 per cent from a year ago. Its share of the market had dwindled to 24 per cent last year from 39 per cent two years earlier, according to a research firm.

In Africa, too, its market share slipped to 51 per cent last year from 62 per cent two years before. It’s still ahead of rivals because of its superior distribution on the continent, says Neil Mawston at Strategy Analytics, but it has to act to arrest the decline.

As blogged by us earlier, Nokia is very slow to react to popular technology and trends. In emerging markets, for example, multi-SIM models have been a draw for people who want to take advantage of freebies doled out by competing carriers, but Nokia lacked such phones until mid-2011.

Another costly gap in its basic phones offering is a full touch-screen model. Around 105 million such phones were sold last year globally, according to Strategy Analytics. Nokia left the door wide open for Samsung and others by not delivering a full-touch feature phone. The Koreans figured it out three years ago, yet Nokia still does not have a product. Nokia is due to unveil a full-touch 306 feature phone model in the coming months. In the meantime, prices of Android smartphones have dropped, and Nokia’s Windows are quite expensive and on this front also, Nokia is a looser.

Despite all the negative happenings, there is still ray of hope for Nokia as it has still got its loyal customers who still like its feature handsets and smartphones on Windows platform. What Nokia is expected to do is to think out of box and start aggressive marketing campaign, drop prices considerably, reconnect with its retailers and provide them good pre-sales services so that they could change the buying decision of prospective customers.

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