Failure of nokia

Failure of Nokia By: Karan Kamboj

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' peopleApple 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 lateFinally 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

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 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 StrategyApple 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 Smartphone's

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...

Journey towards failure

Year 2006:

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

Year 2007:

June 29 Apple launches iPhone 3s. Redefines smart phone and challenges category

leaders like BlackBerry and Nokia. 

Year 2008

MarchMicromax sets up handset business in India.

SeptemberSamsung launches Omnia. Becomes dominant in touch

screen phones globally.

Year 2009

JuneAndroid enters Indian market with HTC Magic at Rs

29,990.

Year 2010

JuneSamsung 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 30Nokia launches C1 & C2—dual SIM phones. Nokia market share in India for 2010 (Jan-Sept),

according to IDC, crashes to 32.9%

Year 2011

FebruaryNokia announces Microsoft patnership, but it takes 8-9

months to unveil products.

Meanwhile, Samsung consolidates position while Micromax, Karbonn, Lava, Spice launch cheaper smartphones.

March

iPhone 4. The iPhone changed the industry in more ways than one: apps, superlative design and accessories.

But Nokia is still struggling to find traction with Windows.

JuneNokia launches dual-SIM phones, becomes no.1 player in this

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

NovemberSamsung's Galaxy Note, iPhone 4S launched. 

DecemberNokia's Lumia 800 (Rs 29,000)Lumia 710 (Rs 19,000) launched. Samsung's cheapest Galaxy at `7,830; strengthens position in

the low-end smartphone space.

Year 2012

JanuaryNokia fights back. Launches 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 claims 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 2013

Nokia's market share dwindles down to 7-9% as per IDC Asia Pacific Mobile Tracker in Q4 2012.

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

ahead.

Conclusion

Thank you