NOKIA'S Strategic Mistakes

Is loss accidental or inevitable?

Since 1998, it has surpassed Motorola in the global market to become the largest mobile phone brand. In 2003, it took the position of Motorola's largest brand in the Chinese market, and became the largest manufacturer in the mobile phone industry.

However, just released the third quarter 2009 earnings report, NOKIA reported the first quarterly loss in 13 years, the loss amount is as high as 559 million euros, and in the same period last year, NOKIA realized a profit of 1 billion 60 million euros.

Even NOKIA began to lose money.

NOKIA global CEO Kang Po Kai blamed the loss on NOKIA SIEMENS.

Because NOKIA's losses mainly come from the impairment of assets of 1 billion 170 million euros, of which three are related to NOKIA SIEMENS.

"Our mobile phone business is still developing very well, and the two can not be confused."

Kang Po Kai told CBN reporters.

But it is undeniable that NOKIA's mobile phone business is facing unprecedented challenges.

In particular, the market share of smart phone business has dropped from 41% to 35%.

The impact of competitors from Apple iPhone, RIM blackberry and Plam company is self-evident, but NOKIA's own strategic problems are also unshirkable.

"The news of NOKIA's loss really surprised me, but after careful analysis of its strategy, we can see that there is" reason "behind the loss.

Gong Bin, managing director of Beijing consulting, told CBN reporters.

Two big

Compared to other mobile phone companies in the three major 3G standard line of attack strategy, NOKIA's current advantages are still concentrated in the traditional 2G GSM and 3G WCDMA.

NOKIA has always been an "off the hook" attitude in the field of CDMA, and has not made great efforts to promote it. It has also adjusted strategies several times, and is about to withdraw from the CDMA market by market rumors. No matter the type of CDMA product or the proportion of CDMA sales, it only accounts for a very small share. This is in sharp contrast to the Samsung based on CDMA, and Samsung is now struggling to catch up with NOKIA.

Samsung, Motorola and LG have launched TD phones for the first time, while NOKIA will not launch the first product until the end of this year. Although the 3G market has not yet been fully launched, China Mobile is pursuing that if TD is not supported, the customization of 2G phones will also be affected.

"It's like racing.

There are three horses running, and only one NOKIA.

The 2G era is not obvious, and this short board is displayed in 3G.

Gong Bin believes that when the living environment has changed, the key to NOKIA's success is whether its original concept can adapt to the new market.

According to the statistics and monitoring of both consulting, NOKIA is currently only the top ten in the domestic CDMA market, not only Samsung's competitors, but also domestic mobile phone companies such as Hisense and Tianyu Long Tong, and HUAWEI, ZTE's traditional equipment vendors' low impact on CDMA.

"Take the Chinese market as an example, even if NOKIA has taken over the WCDMA market, it will only have a 30% share, not to mention this situation."

Gong Bin said.

Low price and low profit are also one of the problems NOKIA faces.

According to the data, 60% to 70% of the 160 products sold in NOKIA are low-end or even low end products. At present, the top 5 of the sales volume are all low-end products. The price of the first 4 is only three hundred or four hundred yuan. In the top ten products of the sales volume, only 2 products are priced at more than 1000 yuan.

Gong Bin analysis, although E71, N97 and other high-end models are also very popular, but the proportion is still very small. Compared with Samsung's high-end mobile phones of five thousand or six thousand or seven thousand or eight thousand yuan, NOKIA's most popular high-end models are generally two thousand or three thousand yuan, and the profit is naturally thinner.

Despite the launch of a large number of low-end machines, NOKIA's market share has not been consolidated. The market share of NOKIA in China has dropped from 36.5% in the fourth quarter of last year to 30.2% now, according to the statistics of boss.

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Bow or not?

After the market share has reached the limit of 40%, where is NOKIA's future? After careful consideration, NOKIA has proposed the strategy of pforming the mobile Internet since 2006, and launched the mobile Internet portal OVI.

But the road to pformation is not as smooth as expected.

Until the third quarter, NOKIA's revenue from the service sector was only 150 million euros.

"Now, OVI is still far from making money."

Gong Bin said.

Before OVI could really lift NOKIA's sky, NOKIA's traditional mobile phone business had a crisis ahead of schedule.

NOKIA has been pursuing its own brand strategy. Although other mobile phone companies have begun offering mobile phones to operators by OEM, they have begun to embark on customized roads, but NOKIA has been unmoved and firmly committed.

The disadvantage is that NOKIA's strategy of pforming the mobile Internet gradually makes operators feel uncomfortable.

In the era of 3G, operators want to fully control the 3G industry chain, and deeply involve in 3G content and so on.

What should we do to push our business or to bow to operators? This is a question that always lies between NOKIA and operators.

At present, in the global telecom market, 100% of the mobile phone market in Japan and South Korea is the carrier market, which accounts for more than 80% of the market in North America, Canada, and 60% in five Western European countries.

The increasing proportion of operators becomes an inevitable trend.

This year, the proportion of China's mobile phone market operators has increased from about 35% to about 65%.

Therefore, in recent years, Samsung, HUAWEI, ZTE, HTC and other "cooperation" operators' mobile phone companies have been greatly promoted, and the share of the market has also climbed steadily.

NOKIA's success in the Chinese market is the provincial direct supply distributor mode, but since its establishment in 2004, it has been implemented for 5 years. "Although there is nothing wrong with this model, it will be too conservative if we continue to follow the traditional mode when the market shuffle."

Gong Bin thinks.

"The market pays attention to the survival of the fittest. It will be very difficult for a mobile phone company to maintain its unique position in the future. The challenges and pressures of NOKIA will also grow more and more. The key is to see how it does it."

He said.