Nokia on the Global Market: How to Compete with Other Companies? Cissy Aixi Xu.
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Transcript of Nokia on the Global Market: How to Compete with Other Companies? Cissy Aixi Xu.
Nokia on the Global Market:
How to Compete with Other Companies?
Cissy Aixi Xu
Agenda
• IntroductionBackground InformationProblem of Nokia
• BenchmarksApple Inc.Samsung
• Recommendation
• Shareholder Concerns
• Conclusion
Introduction
Lost mobile sales since April 2010
Background Information
a. Current situation of global smartphone market
b. Current situation of Nokia
c. Current situation of other main companies
d. Profit margins for smartphones
a. Current situation of global smartphone market 25% of worldwide mobile sales
Table 1 “Worldwide Smartphone Sales to End Users by Operating System in 2Q11”
(Thousands of Units)
http://www.gartner.com/it/page.jsp?id=1764714
Operating System 2Q11 Units 2Q11 Market Share (%)
2Q10 Units 2Q10 Market Share (%)
Android (Google) 46,775.9 43.4 10,652.7 17.2
Symbian 23,853.2 22.1 25,386.8 40.9
iOS (Apple) 19,628.8 18.2 8,743.0 14.1
Research In Motion 12,652.3 11.7 11,628.8 18.7
Bada 2,055.8 1.9 577.0 0.9
Microsoft 1,723.8 1.6 3,058.8 4.9
Others 1,050.6 1.0 2,010.9 3.2
Total 107,740.4 100.0 62,058.1 100.0
Table 2“Worldwide Mobile Device Sales to End Users by Vendor in 2Q11” (Thousands of Units)
http://www.gartner.com/it/page.jsp?id=1764714
Vendor 2Q11 Units 2Q11 Market Share (%)
2Q10 Units 2Q10 Market Share (%)
Nokia 97,869.3 22.8 111,473.7 30.3
Samsung 69,827.6 16.3 65,328.2 17.8
LG 24,420.8 5.7 29,366.7 8.0
Apple 19,628.8 4.6 8,743.0 2.4
ZTE 13,070.2 3.0 6,730.6 1.8
Research In Motion 12,652.3 3.0 11,628.8 3.2
HTC 11,016.1 2.6 5,908.8 1.6
Motorola 10,221.4 2.4 9,109.4 2.5
Huawei Device 9,026.1 2.1 5,276.4 1.4
Sony Ericsson 7,266.5 1.7 11,008.5 3.0
Others 153,662.1 35.8 103,412.6 28.1
Total 428,661.2 100.0 367,986.7 100.0
Calculation:
• Plays an important role
b. Current situation of Nokia
• 7.5% decrease in worldwide mobile sales
• Huge decline of smartphone market share:
27.5% Dec. 2010 to 15.5% Sep. 2011
http://www. gartner.com/it/page.jsp?id=1764714
“Worldwide Mobile Device Sales to End Users byNokiain 2Q11” (Thousands of Units)
27.5%Dec. 2010
15.5%Sep. 2011
http://www.allaboutsymbian.com/news/item/13121_Nokia_Q2_2011_results-smartpho.php
c. Current situation of other main companies• Six main manufacturers of smartphones:
Nokia, Apple, RIM, Samsung, HTC, and Motorola
• Increase rapidly: Apple, Samsung, HTC
http://www.allaboutsymbian.com/news/item/13121_Nokia_Q2_2011_results-smartpho.php
d. Profit margins for smartphones
• Top-end smartphone: 36%
e.g. Apple’s iPhone
• Mid-end smartphone: 1% -15%
e.g. Nokia: 1. Mid-end & low-end smartphone
2. Big volumes & lower revenue
Problem of Nokia
a. Worldwide mobile sales declined quickly
b. Not improve technology of Symbian system
c. No powerful top-end smartphone
d. Weaker than its competitors
Benchmarks
Apple Inc.
• Fastest selling top-end smartphones of all time
• Touch screen, advanced features, and minimal hardware
• 2Q11: 19,628 thousands of units
2Q10: 8,743 thousands of units
• Development of iSO technology
• Release new phone on every year:
iPhone to iPhone 4S (since 2007)
iPhone 4S
BenchmarksSamsung
• Second highest percentage of global mobile sale
• Refresh system
• Select with latest innovations and most popular features
• Become first main manufacturer
• Galaxy phones with Android system (2010) Samsung Galaxy S II
http://news.cnet.com/8301-13579_3-57318644-37/samsung-outshines-apple-in-smartphone-shipments-market-share/
Recommendation
1. Changing focus on top-end smartphone
2. New Windows phone with new technology
3. Keeping basic phone market
1. Changing focus on top-end smartphone
• Large sales on basic phone & low-end smartphone
• Need top-end smartphone
• Attract more top-end smartphone customers
2. New Windows phone with new technology
• New Windows phone
a) On Feb. 11, 2011
b) began its partnership with Microsoft
c) Nokia: hardware
Microsoft: Microsoft Windows Phone software
d) Aim at top-end & mid-end users: Lumia 800 & Lumia 710
e) Powerful combination
2. New Windows phone with new technology
First Advantage:
• Having a top-end smartphone to compete
• Can succeed at top-end & mid-end market, Then reclaim the leadership position
2. New Windows phone with new technology
Second Advantage:
• Open doors to four largest U.S. operators
a) U.S. operators: control > 90% of phone sales
b) Acquirers of smartphone increase quickly (U.S.)
c) U.S. smartphone market: world’s largest
http://blog.nielsen.com/nielsenwire/online_mobile/in-u-s-smartphone-market-android-is-top-operating-system-apple-is-top-manufacturer/
2. New Windows phone with new technology
Second Advantage: to U.S. smartphone market
d) Nokia: only 2% smartphone market share
e) Windows Mobile/WP7 Phones: only 8% shares
• Good opportunity to entry U.S. market
http://blog.nielsen.com/nielsenwire/online_mobile/in-u-s-smartphone-market-android-is-top-operating-system-apple-is-top-manufacturer/
3. Keeping basic phone market
a) 75% basic mobile sales
b) Large number of Customers: basic & low-end market
c) New Phone: need time to be accepted
d) Keep Symbian system & not lose existing customers
Shareholder Concerns
Q: Why not stick with the Symbian system and improve upon it?
A: The system
1. cannot be improved based on technology
2. cannot refresh with the latest innovations
3. cannot make more profit
4. cannot compete with other top-end smartphone
Conclusion
• Earn more Smartphone market shares
• More competitive
• Play an important and consolidated role
• Need long time
too late to enter top-end smartphone market
Questions?