We’ve written about Nokia’s smartphone woes in at least one previous article. Note that we haven’t simply been happy to dish the dirt on Nokia — we’ve always been mindful of the fact that regardless of their troubles in the smartphone arena, the boys from Espoo are still doing rather well with their less expensive phones.
According to Reuters, however, this lead is becoming tenuous as well, (no) thanks to the efforts of many up-and-coming companies to carve out their own niches in the low-end market. Less known than Nokia, brands like China’s ZTE and India’s Micromax are aggressive and nimble – and are beginning to be successful at Nokia’s expense.
But this can’t simply be written off as a battle of many Davids versus a Goliath. These companies may indeed be less famous, but not all are small fry, and many have already become successes in their own right. Chinese firms ZTE and Huawei, for instance, both aim to ship a little less than 100 million handsets each in 2011. Even less-known manufacturers, such as the so-called “no-name” firms, have sewn up a whopping 45% of the market in China, and have begun to set up shop in other countries as well.
The ever-decreasing cost of key components such as chipsets has allowed these companies to price their products exceedingly competitively, undercutting Nokia and other companies. What’s more, many of these firms are beginning to take their game to the next level; analysts say they’re setting their sights on selling Android handsets next.
None of this is good news for Nokia. The numbers don’t lie: the company’s market share in China was 33% in 2009, but this year it’s dipped considerably, to just 19%. The slowdown is even more pronounced in India; in 2009 Nokia controlled nearly 60% of the Indian market for phones, but now it can only lay claim to a comparatively dismal 26%. Overall, despite the fact that the world economy began to improve in 2009, Nokia’s sales of its more basic cellphones have declined for three quarters straight; from January to March this year, Nokia managed to sell 84.3 million featurephones – 2% less than in 2010.
Got any ideas as to how Nokia can pull out of its tailspin? We think these guys might be grateful for all the help they can get at this point.
