Nokia Microsoft's path to a sustainable position in the United States mobile market.

Steve Bayley Strategic Planner@TheLincolnKing

Celebrity Endorsements reek of DESPERATION

As do OVER-THE-TOP public displays that are UNCLEAR how they are RELATED TO THE BRAND

This all seems EERILY FAMILIAR...

Nokia has about

6 Billion reasons why it won’t go out like

Blackberry

The biggest reason for that is valuable

proprietary technologypatents

And the backing of Microsoft

Windows has to be comfortable with who they are and what they can be in

the US mobile market.

They will not be a market leader

They can be a viable competitor

Windows phone has to pursue a differentiation strategy

Where is the window of opportunity?

If iPhone has the mass aspirational angle

and Android has a strong male base

Where does that leave Nokia?

The path to smartphone success is littered with the remains of failed

competitors

The Corporate

PhoneThe Adventure Phone

The Rebellious Phone

The Creative

Phone

Its not NOKIA

Its the Windows Phone

What is Windows?

A Pioneer

Not the cool hipster iPhone, Brooklyn gentrification pioneer

But a real

Honest to goodness

EXPLORER

One thing about Explorer’s...

They tend to travel light

And value functionality in the real world

so as a result

have little tolerance for

extraneous bells and whistles

Whether those bells and whistles are are about social status or tech one-

upsmanship

In 2013, the “base models” still have a ton of desirable features

When many American consumers hear NOKIA they see this

That doesn’t have to be a bad thing

But remember its NOT NOKIA

its Windows

Pre-Paid & Unlocked

High Quality

In the rest of the world these are not mutually exclusive propositions

Microsoft will also need to ship more low-cost smartphones to high-growth emerging markets if it is to continue building on its recent nominal share increases. - Brad Reed BGR.com 9/5/13

Traditionally, mobile technology has spread

from mature markets like South Korea, Japan, and

the United States to emerging markets

For the first time, we are seeing the trend

reverse

The saturated US market is taking mobile cues

from the Middle East & Africa

Markets demanding hi-technology for low ARPU’s are the global

drivers of affordable innovation

The

Smartphone

At this price point

is an emerging market

NOKIA Asha: The $100 smartphone for Middle East & African markets

And thanks to the Windows Phone, they no longer have to be in the

United States

520

This is why the 520 sold outon HSN and in Wal-Mart

on its introduction

This is why Apple is scrambling to compete in

this space...

iPhone 5c launch9/10/13

But Windows has already secured the first mover

advantage

and the word is getting out

Although there are multiple Windows

phones, each owning a sliver of a sliver of the

market

http://blog.adduplex.com/2013/08/adduplex-windows-phone-statistics.html

The fastest growth is coming in the value segment

http://blog.adduplex.com/2013/07/adduplex-windows-phone-statistics.html

Its NOT 1999

Conspicuous Consumption is NOT cool

Pres

tige

Value HighLow

High Brand Positions of U.S. Handset Manufacturers - 9/13

Rivalry BuyersSuppliers

New Entrants

•Rivalry is weak•Cost of switching is high(early termination fees), but falling (annual upgrade options)•Android brands are weakly differentiated among themselves•Overall buyer demand is growing slow, but value options are outpacing the general market•Apple and Samsung dominatethe market

•Buyer bargaining power is strong•There is a shortage of optionsmeeting customer performanceexpectations at the desired price point•Customers feel they have to make compromises on quality•Available products are notadequately differentiated•Buyers can easily stick with whatthey have and postpone purchase

•Suppliers bargaining power is moderate•Apple has deep backwardintegration and hand-picks suppliers•Androids are considered a commodity•Samsung has made strides in“un- commoditizing” the Android market•Developers have relatively freereign for Android & Windows

•Threat of New Entrants is weak•Barriers to entry are high - Only well capitalized multinationals compete in the handset game•Apple is willing to contest newentry with the iPhone 5c vs, the520•Apple is looking to expand byentering the value segment, where traditionally, small Android players have splintered the the market share

Substitutes•Threat of Substitutes is moderate•The 520 is a superior product vs. existing similar priced Androids•iPhone 5c is a potentiallybrand compromising move from Apple•First movers to differentiate will have significant advantage. Once the segment takes off the market will again commoditize

Competitive Analysis

Apple made it cool to be smart...

Yet convinced people it was “smart” to buy a $600 phone

That old Apple magic has disappeared though

Explorer’s know that if you’re

In a line waiting with a bunch of sheep

to accelerate your road to poverty

There is no way that could be cool!

http://www.wpcentral.com/nokia-lumia-521-coming-metropcs-tomorrow-only-99

We already know the Windows junkies love it

You can’t get double digit market share

catering to a tiny niche

Explorers are not a tiny niche.

They are basically any one who doesn’t really care about Apple or Samsung or bleeding edge tech

They are too busy living life

And just want a smartphone that

works.

Where are these Explorers now?

They are in the market, and shopping for a new

home

Non Samsung Android is 37% of the U.S. Market

HTC, Motorola, LG, these identity-less droids

are competing on features and price and

they can’t win

Windows Phone is up to 4% of the U.S.

Market in Q2 2013

That’s up from 1% at the same time last year

In France over the same period Windows

Phone moved from 2.3% to 9%

What are the driving forces in the U.S.

Market?

Democratization of the Smartphone

Changing Societal Concerns, Attitudes, and Lifestyles, away

from conspicuous consumption and toward value

The United States as A PART of the global

community, not APART from it.

The winds of change are at the back of the

Windows Phone

Just keep both hands on the ball and your legs moving and 15% market share should be a given

END