Nokia

In: Novels

Submitted By 97714618
Words 1813
Pages 8
Struggling Nokia aims high with low-end phone
Bargain-basement handset touted as cash spinner in battle to catch upmarket rivals
Tuesday, 30 April, 2013, 5:32am

*
The Nokia 105 has been released in some Asian markets.
As Nokia battles to catch Apple and Samsung Electronics in the market for smartphones costing US$500 or more, it's counting on a bare-bones handset that sells for just US$20 to give it an edge.
Priced 97 per cent below the latest iPhone, the Nokia 105 features preloaded games, a colour screen, a radio, a speaking clock and a torch.
The phone, Nokia's cheapest, has been available for a few weeks in India and Indonesia and will soon start selling in Europe.
Even with its bargain-basement price, the 105 is critical to Nokia's entire handset business. Nokia reported on April 18 that it sold about 11 million fewer mobile phones in the first quarter than analysts had projected, with sales of basic phones plunging 21 per cent to 55.8 million units.
A failure to revive the low-end business would leave Nokia without an important source of cash as it seeks to develop challengers to the iPhone and Samsung handsets that run Android.
Falling sales of simpler phones were "definitely worrisome", said Mika Heikkinen, a fund manager at FIM Asset Management in Helsinki."They have to get this under control."
Nokia chief executive Stephen Elop points to the 105 as a signal that the low-end business can recover after a difficult quarter.
While demand for the iPhone and Android devices have made smartphones the fastest-growing part of the market, basic handsets still make up more than half of units sold. That means hundreds of millions of phones each quarter - a market Nokia dominated until Asian manufacturers such as ZTE, Huawei Technologies and Samsung started challenging it morie aggressively.
The Finnish manufacturer says the 105 will be profitable,…...

Similar Documents

Nokia

...In 2002 Nokia Mobile Phones was the world’s largest mobile phone producer and had over twice the market share of Motorola, its closest competitor (Financial Times 3-4-2003). In 2002, Nokia’s market share rose for the fifth year to an estimated 38%. Handsets were the main production of the organization, generating almost 80% of sales and 90% of the company’s earnings. In the first quarter of 2003, the mobile phone division of Nokia reported sales of US$5.95billion despite the average selling price of a mobile phone dropping since 2001 (Burgelman & Meza 2003). Not bad for a company that started in 1865 as a paper manufacturer in Finland. However, as of the first quarter 2012, Nokia’s overall revenue has dropped by 29% (Gassee 2012). Recently they have announced that they will cut 10,000 workers (Troianovski et al 2012). There have been several reasons why this event has occurred over the last nine years. The first reason for Nokia’s current crisis is the decision to focus on mid and low priced traditional mobile phones, only entering the smart phone market with a different operating system after the 2007 release of the Apple iPhone and the increasing dominance of the Android operating system from Google. Nokia stayed focused on the Symbian operating system which was aging and has not adapted well for smartphone usage (Cheng 2012). As a consequence, Apple, Samsung, HTC and Motorola now all outsell Nokia smartphone devices. The focus on mid and low priced traditional mobile...

Words: 461 - Pages: 2

Nokia

...Strengths, Weaknesses, Opportunities, and Threats Analysis Strengths The strengths that Nokia could be gaining from the acquisition would be total control of the company, acquiring stock for a minimal price and reducing the overall cost. There are also other factors to include with regards to the acquisition. Nokia could block their major competitors with this acquisition and bring in a higher net project through the acquisition. Whether the acquired firm is left independent or dissolved within Nokia operation, the takeover can be a win-win situation. End-to-end solutions. Acquisition of a parallel unit will greatly augment Nokia's Consumer Electronic and Cable manufacturing portfolio and allows it to offer end-to-end manufacturing and warehousing solutions. Dominance over market share. Acquisition can bring in a positive cash flow, untapped lines of credit, and the customer base of the acquired firm. Acquisition also provides added support to N仗Nokia's operations and enhances market share in different aspect. Assets control. Nokia can control more assets for less money through the merger than if it was to acquire those assets any other way. Weaknesses The weaknesses in business acquisitions mostly comes from risk's taken within the merged company or through external factors. As lucrative the deal may be, facing problems are much of reality that Nokia has to encounter. A serious opposition to the merger can be the management, labor unions, the...

Words: 563 - Pages: 3

Nokia

... Executive Summary Nokia’s reign as the world’s biggest seller of mobile telephones is under serious threat from its competitors such Apple and the introduction of new Android based mobile phones. The company fell short in the smartphone era and its position as the number-one phone seller in the global market is under threat. The case study provides a brief analysis of what transpired at Nokia and how the strategy implemented by the management team from the period of the 1990s up to the 2010 led to the company losing its market shares at both ends of the mobile phone industry. During the period of 1991 and 1992 the company lost FM482million ($120 million) on its major business activities. In 1992 a new group chief executive, Jorma Ollila was appointed. Jorma Ollila’s mission was to formulate a strategy that was going to rescue the company from its losses, into a profitable organisation. The report focus on Nokia’s reason to select one area of development out of four, the significance of the introduction of new Android software for Nokia’s chosen strategy and the importance of management teams to strategic choice. In dealing with the first section on the study case , the author analysed the three elements of the strategy context used by the management team and then discussed strategic risks associated with focusing on the single development area out of four. Lynch (2012:421) defines strategy context as being concerned with the circumstances surrounding and influencing...

Words: 4755 - Pages: 20

Nokia

...Nokia: Nokia Corporation is a multinational communications and information technology corporation (originally a paper production plant) that is headquartered in Espoo, Finland. Its principal products are mobile telephones and portable IT devices. It also offers Internet services including applications, games, music, media and messaging, and free-of-charge digital map information and navigation services through its wholly owned subsidiary Navteq. Nokia owns a company named Nokia Solutions and Networks, which provides telecommunications network equipment and services. As of 2012, Nokia employs 101,982 people across 120 countries, conducts sales in more than 150 countries, and reports annual revenues of around €30 billion. By 2012, it was the world's second-largest mobile phone maker in terms of unit sales (after Samsung), with a global market share of 18.0% in the fourth quarter of that year. Now, Nokia only have 3 per cent market share in smart phones. They lost 40 per cent of their revenue in mobile phones in Q2 2013. Nokia is a public limited-liability company listed on the Helsinki Stock Exchange and New York Stock Exchange. It is the world's 274th-largest company measured by 2013 revenues according to the Fortune Global 500. Nokia was the world's largest vendor of mobile phones from 1998 to 2012. However, over the past five years its market share declined as a result of the growing use of touch screen smart phones from other vendors—principally the iPhone, by Apple...

Words: 6740 - Pages: 27

Nokia

...ab UBS Investment Research Nokia Here we go again… Following negative pre-announcement we downgrade from Buy to Neutral We believe the main issue behind Nokia’s profit warning has been increased pricing pressure in the high-end due to lack of competitive product. We believe investors will be unwilling to put faith in the execution on new devices. We downgrade to Neutral and will revisit when visibility emerges on new products. Do risks still remain on lowered expectations? To reach low-end of FY margin guidance, Nokia requires >34% GM or c.460bps seq improvement in Q4 which appears challenging. To achieve our 2010E revenue we estimate new high-end devices will need to contribute c.€1.3bn in H2 or >4m units. Given the magnitude of improvement required, lack of reassurance on new products, and increased competition, we believe downside risks still exist. Has value now emerged? On a one-year reverse DCF, current price implies 0% rev growth in perpetuity at 4m of incremental volumes. Alternatively, overall volumes will have to be significantly better than expected. UBS 4 Nokia 17 June 2010 Table 2: Nokia Devices – volumes (m) by category Volumes (m) N series E series X series C series 5000 series Other smartphones Converged Devices FY '09 18.9 18.5 0.0 0.0 17.2 13.2 67.8 Q1 '10 2.9 6.3 1.0 0.0 7.9 3.4 21.5 Q2 '10E 1.5 6.9 1.7 3.2 9.2 3.2 25.7 Q3 '10E 1.4 6.9 2 6.0 8.6 2.8 27.7 Q4 '10E 2.1 7.8 2.2 6.8 6.8 3.0 28.7 FY '10E 7.9 27.9 6.9 16.0 32.5 12.4 103.6 Mid...

Words: 5216 - Pages: 21

Nokia

...1. 1G network generation: They were solely operated by state-owned monopolies, competitions are limited and tariffs high. 2G network generation: A common standard (GSM) was adopted by many countries and later become 2G standard. The mobile phones become mass-market products as its price dropped. Due to the efforts that telecom companies made in technology, SMS and data service appeared.All of these created great value in this industry. 3G network generation: It opened new business opportunities such as virtual private network and WIMAX as shown in the right side graph. As a result, more subscribers were attracted and more revenue generated. 2. Nowadays the business is changing form good dominant business to service dominant. Business has evolved to a stage where the product as a good is not enough. Companies strive to change their way of thinking and try to develop new products as a service. Nokia is one of those companies, turning their business from a headset making company to an internet service company. However, In 2007 Apple introduced the iPhone. It is an internet based smartphone and with its unique features and friendly design the iPhone gave Nokia a serious rival. In conclusion Nokia is taking a positive but risky path. Entering a market where they are not that well developed can be tricky. If they can start from lumber mill and finish as the biggest mobile phone seller, then there isn’t going to be something that can stop them realizing their ideas...

Words: 406 - Pages: 2

Nokia

...International Management Managing Across Borders and Cultures Case study Nokia: Business Interests VS German Pressures Class 2 Group leader: Roger 12901227 Group members: Froggen 12901204 Henry 12902158 Himi 12901225 Eudora 12901203 Word count: 1953 words Menu Background (Roger) 1 Question 1 (Froggen) 2 Question 2 (Henry) 3 Question 3 (Himi) 4 Conclusion (Eudora) 5 The case study of Nokia Background As a well-known mobile handset maker in the globe, Nokia occupied a 40 percent market share once. However, with mobile industry progressing at an unprecedented rate, the competition was becoming increasingly fierce with encroaching on the market share of Nokia. Due to such situation, the whole mobile handset industry was marked by declining prices and depressed margins making companies look at low-cost production options. Nokia, was also making their efforts to reduce the cost, so they made decision to close the company in Bochum and built a new one in Romania although they were a little worried about the...

Words: 1997 - Pages: 8

Nokia

...Smartphones: New challenges for the industry. Nokia and the Operating System of the future. Term-paper: Strategy II Deadline: 07/12/2010 | Bachelor in Business Administration Student Numbers: 0874165 | 0878950 | 0830480 A bstract Nokia is the biggest mobile phone manufacturer in the world. It produces and sells more mobile telephones than any other company in the globe. This gives them a competitive advantage, especially in terms of scale of its operations. However, the fact that it has been slow to adapt its technology and production line to current trends, has given space for other companies to challenge its global dominance, especially in medium-long term. Smartphones are the next step in an extremely turbulent industry where innovation is the key for survival. It is for this reason that Nokia must adapt to continue its expansion for benefit of its different stakeholders. We present an analysis based on three strategic alternatives regarding the Operating System Nokia should use to implement its new line of smartphones, in order to compete with already established player in this segment and ensure long-term profits at the same time as bringing the highest levels of satisfaction to every of its stakeholders.   Contents    1. Introduction ......................................................................................................................................... 1  2. What is a smartphone and how smart are Nokia’s phones...

Words: 9542 - Pages: 39

Nokia

...CASE A – NOKIA CASE Question 1 From the 80’s until its peach in the early 2000’s, Nokia made various strategic decisions which led the Finnish company to a first rank world competitor on the mobile-phone market. Two main CEOs were implied, Kairamo, who had a strong vision for his company and Vuorilehto who acted with pragmatism to keep the Nokia dynamism. ACTIVITIES | SUB-ACTIVITIES | EXAMPLES | IMPACT ON VALUE (cost or differentiation advantage) | PRIMARY ACTIVITIES | Inbound logistics | - The manufacturing happened inside company and then outsourced when cheaper producers arose. | Cost advantage: The company could focus on specialties and improve its production | | Operations | - Relation with Government (Page 2) - Focused on fewer acquisitions (Page 3) | Cost advantage: Easier to get bank loans, stable cash flows and well protected patents for research. More resources in core business | | Outbound logistics | - Standard system with SIM card working on every network. - Negotiated GSM infrastructure, made handsets consumer item(P6) - Focus on Finland, then in close countries to end up with a global internationalization (Page 2) | Differentiation: Competitors didn’t offer that standardization at the time Cost advantage: Standard products and bigger markets guarantee a strong demand which implies a bigger production | | Marketing | - Kairamo (Page 2) decided Nokia should expand into world market for survival. - Focused on selling cheaper...

Words: 1168 - Pages: 5

Nokia

...1. Provide a brief background of the company and the industry Background of company: History of company Nokia Company was founded in Finland in year 1865 and was a pioneer manufacturer of pulp and paper. Nokia set up a division to develop design and manufacturing capabilities in data processing, industrial automation, and communications systems in 1967 (Nokia, n.d.). By 1987, Nokia introduced their first handheld phone for GSM, the European standard for digital mobile technology (Fundinguniverse, n.d.). Nokia started to focus on mobile phones and network infrastructure. The world’s most popular phone was launched in year 2003 which is Nokia 1100 (Refer to Image 1.1). The total sales are over 250 million units, even more than iPhone and Samsung Galaxy (Allsopp, 2014). Image 1.1 Nokia 1100 Current Company Previously, Nokia smartphone was used the Symbian operating system and performing well in the global market. Since 2010, Android system and Apple’s iOS were getting into the phone market actively. Nokia made an announcement which switched to the Microsoft Window OS in February 2011 (Nokia, n.d.). After switching to Microsoft operating system, Nokia and Microsoft launched the first Windows Phone 7 which called Lumia in 26 October 2011 (Weber, 2011). The company wish to lead the smartphone market, but when compared to the previous 2 years, the sales was another declines. Nokia net income has shown a negative sign in second-quarter of 2011 to fourth-quarter of 2013...

Words: 4058 - Pages: 17

Nokia

...What are the key factors that Nokia lost its market share in mobile network? Nowadays , technology had become more stronger and popular among the people all walks from life. There are several factors that Nokia lost its market share in mobile network? Ignored the market - consumers started going mobile with music, apps and payments going mobile smartphones became the next billion $ business. Through app stores new and more innovative platforms created a whole new eco-system: open (Android) and closed (iOS) that allowed their owners to develop and market hardware (Apple) or work with OEMs to make Threat from iPhone was overlooked - this is failure on a grand scale - as iPhone became the OS of choice for innovation in smartphones. Choosing to stick with a platform for the greater part of the decade whose user experience and closed environment did not attract Developers/OEMs i.e. Symbian After Symbian failed, and neither could Java applets built to run apps on Nokia phones keep up with the appeal of the simplicity of Android and the aesthetics of iOS, Nokia chose Windows. Which for the most part has been an epic fail as it is buggy, closed up and always a step behind in innovation and creativity. Even with better cameras and imaging, Nokia phones have been slow to adapt, leaving Microsoft (previously Nokia) with a huge gap to catch up with lesser powered cameras on Samsung, iPhone, HTC or newer OEMs like Xiaomi, One+ One,......

Words: 275 - Pages: 2

Nokia

...1. What have been the keys to Nokia’s global strength? The key to Nokia’s global strength is its ability to know and understand its market. Nokia has a practical understanding of what consumers need, value, and can afford depending on their geographical location and demographics. By providing the right products, features, and price, the firm has successfully built long-term brand value all over the world. In emerging markets, Nokia offers durable, attractive, and affordable cell phones. For example, in Indian market, people have an average income therefore; they did not want to spend $600 for a cellphone. Instead of introducing a smartphone with thousands of applications, Nokia focused on the basic functions of cellphone and sold with cheaper price from $30. Furthermore, Nokia also makes it a point to involve the local consumers with offerings that appeal specifically to them. Nokia has done this by adding a music store (Nokia Music Store) on the cell phones. Nokia adds music to this store from around the world, as well as and most importantly artists from that local area. 2. What can Nokia do to gain market share in the United States and Europe where its presence is not as strong? Facing to two strongest and biggest competitors as Apple and Samsung, Nokia has been losing their market share and loyal customers. There was an outstanding event that happened in just one month ago, Microsoft bought the cellphone department of Nokia. It meant people would never see Nokia as...

Words: 520 - Pages: 3

Nokia

...CERTIFICATION OF AUTHORSHIP: I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledge and disclosed in the paper. I have also cited any sources from which I used data, ideas of words, whether quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course. Student Signature: ___________________________ ******************************************* Instructor’s Grade on Assignment: Instructor’s Comments: Executive Summary Within two decades, Nokia, a company that started as a wood pulp mill in 1967, became a leader in electronics manufacturing. Nokia has a complex supply chain making over 900,000 devices daily with 100 billion components from 60 different suppliers. (Nokia India: Battery Recall Logistics, 2011) During the company’s peak they experienced a defect with one of their batteries that challenged the company is ways they didn’t expect. What they initially thought would be a simple minimal recall of the affected batteries turned into a reverse logistic nightmare that put a strain on their resources. Once the media released the recall and headlined the potential of an exploding battery, Nokia was overwhelmed with requests for replacement batteries. As the company tried to devise a plan for the consumer to check if their battery was affected they ran into many logistic issues on access to internet, inability to deliver replacements...

Words: 1796 - Pages: 8

Nokia

...On June 12, 2009, Finland-based telecom giant, Nokia Corporation (Nokia) launched its Nokia Life Tools (NLT) service in the state of Maharashtra in India. This was a bid to expand its rural base in the country. The service was commercially rolled out after the successful implementation of the pilot program in Maharashtra, in November 2008. The launch of the NLT service marked the increasing accessibility of value-added services (VAS) to rural consumers in India. Targeted at the rural consumers, the NLT service offered a range of services in the areas of agriculture, education, and entertainment to address the information gaps in the rural community. Nokia began focusing on the Indian rural market in 2003 when it launched a mobile handset with features such as longer battery life, one-touch flashlight, etc., that catered to the needs of the rural consumers. Over the years, it extended its support to the rural markets by launching several low-end phones that rural consumers found affordable. However, the company felt the need to serve the rural market by offering a value proposition along with its handsets. It noted that the rural consumers, especially farmers and students, had little or no access to the information they needed due to lack of resources and erratic Internet connections. This prompted Nokia to launch a service that would be embedded in its handsets and would serve the needs of the rural community. In November 2008, the company launched a pilot program for...

Words: 1235 - Pages: 5

Nokia

...Log In Sign Up Search Explore distribution channels Source:-http://www.scribd.com/doc/50638214/Nokia-PPT There are three main distribution channels used by Nokia are as follows 1.Using the medium of distributor to superstockist toretailer who sells it to the final consumer 2. Via Nokia’s own stores called the Nokia priority stores. 3. Via organized retail channels like Mobilestore to name a few. Source:- http://www.scribd.com/doc/36106585/Sales-and-Distribution (Data of oct,2009) MARKET RESEARCH& DISTRIBUTION PLAN(Data Dec,2010) • India has some 95,000 outlets that sell mobile phones. "In 50,000 of themthat's a conservative estimate only one brand available is Nokia ´ • Nokia started distributing its phones through a partnership with HCL and decided to supplement that with its own distribution efforts. Both companiesrealized that there was a tremendous growth opportunity and it was best that we utilized the resources of both organizations in an optimum manner. • Nokia decided that they would address some markets jointly, and would individually address some of the other markets. • The metros and Tier I towns where mobility has been around for a few years,customer expectations are more evolved, and are continuously evolving. • Nokia has begun to set up concept stores in Indian cities. Source:-http://www.scribd.com/doc/35792759/Nokia-Hcl-Distribution-Strategy-Visweswaran...

Words: 413 - Pages: 2