Nokia to customise smartphones for USA and South Korea

Relations with teleoperators better than for years

print this

The world’s largest mobile phone manufacturer Nokia has not been able to strengthen its position in the United States, in spite of several attempts.
      Executive Vice President Kai Öistämö, who is responsible for Nokia’s mobile phone unit, promised at the Nokia Capital Markets Day event that the situation is to improve in the near future.
     
”I can honestly say that our relations with the US teleoperators are now stronger than for many years. I am also enthusiastic about the new smartphones which we are to launch in the USA”, Öistämö reported.
      Good relations with telecoms operators are a precondition for success in the USA, as the majority of mobile handsets are sold through teleoperators. Because of their sales power, American operators also tend to mould the markets.
     
The US problems have not left the corporation unaffected. Next year Nokia also intends to try a breakthrough in another difficult market area, namely South Korea.
      ”The most important teleoperators in the country are to adopt the international mobile device standards. Nokia will return to South Korea, and the new mobile phones customised for the South Korean market will be launched during the first quarter of 2009”, reports Öistämö.
      The slump in mobile handset sales caused by the global financial crisis has come as a surprise to the Nokia executives. The credit crisis that started more than 18 months ago in the financial market began to hurt the real economy badly in the course of the autumn.
      ”A year ago it was impossible to envisage that the mobile phone markets would shrink for the first time since 2000. The present times are hard, but they are also good times for hard players”, noted Öistämö, referring to Nokia’s runaway leading position in the mobile phone handset market.
     
When it comes to smartphones, the Canadian firm Research In Motion (RIM) and American Apple have both won market share from Nokia.
      RIM is best known for its BlackBerry e-mail devices, while the main strengths of Apple’s internet-connected multimedia smartphone iPhone include a multi-touch screen and a minimal hardware interface.
      Market research companies estimate that in 2009 the sales of smartphones will grow most, even though the overall markets will continue to shrink.
      ”It is by no means possible to maintain worldwide success with only one product. This time next year we will be the largest manufacturer of mobile devices with touch screens”, Öistämö predicted.
      He believes that Nokia’s key strengths are economies of scale, in other words large sales volumes and the lowest costs in the industry.
     
Moreover, Nokia will have to offer the customers more value for their money than the competitors are able to do.
      Nokia believes that it can beat its rivals particularly when it comes to new services. A good mobile phone alone can no longer guarantee success.
      ”We will have to focus on three fields: user experience, technological innovations, and cost-effectiveness”, Öistämö reported.
     
As an example of Nokia’s cost-efficiency, Öistämö mentioned the Nokia 6300, which has so far shipped more than 40 million units.
      The sales of this model were launched in January 2007. The sales price has dropped by one-third over the course of 20 months, but the gross profit margin has remained more or less the same as it was at the launch-date.
      ”None of our competitors are capable of the same”, Öistämö concluded.
     
Nokia calculates that one-third of handsets to be introduced next year will have a touch screen, a qwerty keyboard or both.
      Around half of new mobile phones will also be equipped with inbuilt GPS navigation. The sales of the technically most advanced N-series devices is expected to exceed the landmark figure of 100 million units early next year.
      Sales of these phones started up in the autumn of 2005.


Previously in HS International Edition:
  Shrinking markets force Nokia to cut costs appreciably (5.12.2008)

Links:
  Nokia press release 4.12.2008: Nokia Capital Markets Day 2008
  Nokia N-series phones on sale in the U.S. market

Helsingin Sanomat