Nokia’s biggest problem is not Apple and the iPhone, but their ability to communicate with the outside world
|– the Finnish language is difficult, especially if you are trying to make yourself sound sexy …|
A lot has been said and written about the mobile market during the past three years and many in the business have had an opinion about Nokia’s results and how the mobile market has been developing. But a closer examination of how the press has treated Nokia shows that they have been extremely critical about Nokia and how Nokia has been doing business.
At the same time, these same people have had an opinion about Apple and the iPhone and there is no doubt that the attention the iPhone has received from the press has been much more positive, despite Apple still being a marginal market player in a global perspective. For some reason, a great deal of the global press corps have simply been totally uncritical about Apple and the iPhone market.
How many articles have you read that described how iPhone sales experienced a flat growth for four quarters in a row from Q3 2009 to Q2 2010? How many articles have you seen that have described how Apple’s distribution has grown over time and whether there is a relationship between the development of Apple’s sales and their distribution growth? We have not seen any such articles, but on the other hand this does not surprise us.
Nokia can be evaluated in many different ways. You could for example measure their success by the number of people that choose to purchase a Nokia mobile phone every year. In that area, Nokia is still by far the world’s largest market player, with a market share almost twice the size of their nearest competitor.
You could also evaluate Nokia based on their smartphone market share. Despite Nokia having decreasing smartphone market shares, it is still a fact that Nokia was almost alone on that market for a long period of time, and that Nokia still has a smartphone market share that is larger than their overall market share. Today, Nokia is still selling over twice as many smartphones as their closest competitor.
Some people are evaluating Nokia’s ability to offer an alternative to the iPhone. From both the media – and many end users point of view – there is no doubt that Nokia has not been capable of delivering a serious alternative to the iPhone, despite the fact that Nokia is the largest smartphone manufacturer.
During recent years, Nokia has achieved most success on the low and medium end mobile phone market. In this area Nokia has almost eliminated many of their competitors, who were unable to match the tough competition from Nokia and wisely retreated from these market segments, focusing instead on smartphones.
Nokia has similarly more or less eliminated some of their competitors in regions like South America, Africa, large parts of Asia including China and India, and also Russia. Somewhat simplified one could say that Apple has been very successful in the regions of the world that have experienced the current financial recession – the USA and parts of Europe, while Nokia has been focusing on the regions around the world that are experiencing financial growth.
From our point of view there is no doubt that Nokia has not been particularly successful in the smartphone area, but on the other hand they have done extremely well in many other product areas and achieved a unique market position on some of the most interesting markets in the world – most companies can only dream of dominating the BRIC countries.
Strand Consultant believes that Nokia is greatest problem lies in their communication. It is a paradox that a company whose core business is selling communications solutions is having such great difficulty in communicating with the outside world.
It will be interesting to see whether Nokia’s new CEO Stephen Elop will be better at communicating than Olli-Pekka Kallasvuo – whose degree in law most certainly did not contribute to his communication skills.
There is no doubt that Stephen Elop’s background from Macromedia has given him a great deal of experience in communicating with the American press, although the American press does seem to constantly paint a very one-sided picture of the mobile market. Many American journalists hardly realise that there is a mobile market outside the USA, regardless of the fact that the American mobile market is only 7 % of a global mobile market that is still totally dominated by Nokia in all areas.
So the billion dollar question is whether Stephen Elop will be capable of improving Nokia’s communication to the extent that the global press corps – and especially the stock market – will gain a better understanding of Nokia and the staggering number of customers that are actually purchasing Nokia mobile phones every day?
One thing we are sure of, and that is that Finnish is by no means the world’s most sexy language. While it may be possible to seduce a beautiful woman in Finnish, it will require a very different approach to seduce the mobile industry’s opinion formers and their current opinion of Nokia.
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