Nokia: Losing Ground in India

This paper seeks to give reasons for Nokia’s failure in India in light of the case study by Kumar & Perepu (2014) titled “Nokia: Losing Ground in India. ” Nokia enjoyed an undisputed share of the global market as well as India’s market for nearly 14 years in part because of its efforts to produce customized phones that fit the Indian market. Kumar & Perepu (2014), asserts that the company had localized production in line with the Indian market creating both market entry and leader feature mobile phones that supported Indian ringtones, long battery life, multiple languages as well as compatibility with the Indian environment. In addition, government support and reforms in the telecommunication industry (which incorporates free incoming calls, inexpensive calling charges), as well as changing demographics, saw sales off phones increase to millions of units.However, in 2013, Samsung dethroned Nokia Corporation to have a market share of 31.5% against Nokia’s 27.2 %. Unfortunately, Nokia’s dramatic decrease in its market share was not only experienced in India but also across the globe.
To begin with, Kumar & Perepu (2014; 8), asserts that Nokia was complacent with its products failed to keep up with competitor’s trends. For instance, Nokia continued to launch cost-friendly available mobile phones while its competitors such as BlackBerry and Apple was busy producing the high-end phone.This is partly understandable in considering that India was Nokia’s second-largest market. Therefore, launching affordable phones seemed like the way forward to targeting lower-income groups. However, Nokia’s failure to segment its market would be its downfall.Notably, Nokia upgraded features of its phones to incorporate features such as FM radios, flashlights, colored screens, and speaking clocks. However, at this time, its competitors were busy unveiling dual SIM phones. From 2009 throughout 2010, dual SIMs accounted for nearly half of the cellphones in India, yet Nokia failed to capitalize on the growing trend to produce dual SIM carriers. Nokia decided to launch a double SIM carrier later on as the competitors shifted to other technologies.
Secondly, as the Android technology swept the market, Samsung and the likes of HTC came up with android enabled features that integrated multiple apps, yet Nokia chose to stay with its Symbian system. The android system becomes popular such that it held 80% of the total market share in the market. Newer and better versions of Android and Apple iOs were released as Nokia still stuck with its Symbian system. Nokia was dependent on its Symbian system until its partnership with Microsoft.Even after the partnership, it took Nokia a significantly long period (6 – 8 months) to launch its first Windows phone. However, the shift to windows came in too late as the likes of Apple and Samsung has already established its place in the market, leaving no room for Windows phone.
Apart from failing to change its platforms early enough, Nokia was alsounable to follow key market trends. To begin with, as the Android system had proliferated the market, competitors now geared their target to low income customers producing phones to target the market, yet Nokia chose to produce high-end phones priced as high as INR 29,000 while low range phones stood at just INR 7, 000 (Kumar & Perepu, 2014 pp. 10). Samsung did not only stop at producing low-end phones for customers with low incomes, but it also modified its handsets with slight modifications from its previous launch. Nokia windows phone was first launched in 2011 but lacked fundamental technology that could drive sales. In fact, Nokia Windows’s series was launched, but it did not resonate well with the customers in the level of attractiveness and apps that were in Samsung’s, Apples, and other competitor’s handsets.
Further, Nokia also failed to capitalize on the production of tablets. Even though Samsung was the leader, other local companies joined the race in producing tablets. It wasn’t until 2013 that Nokia launched its first tablet in its other markets but not the Indian one. Altogether, Nokia still somehow managed to dominate the Indian’s smartphone market up to 2012. However, in 2013, Samsung surpassed Nokia market share. In the same year, Nokia announced that the US-based Microsoft Company would be acquiring some of its shares.
Currently,competitors such as Apple and Samsung are enjoying a considerable share of the market. It may be difficult for Nokia to establish its former place as the global leader in cell phone, but this is not to mean that it is impossible. Therefore, we recommend the need to be conscious of time and flexible. The digital world is highly dynamic, as such leaders should not operate with an old mindset but should be agile, and vigilant to comprehend changing customers behaviors, and needs, changes in the market as well as competitors aggressiveness. Conceivably, companies need to distinguish itself against its competitors. However, at times following in the major trends may be crucial to the survival of a company, especially in the digital context.
Reference
Kumar, S. G. & Perepu, I. (2014). Nokia: Losing Ground in India. IBS Center for Management Research (ICMR). Andhra Pradesh, INDIA.