Friday, March 17, 2006

Nokia Connects in China and India

BusinessWeek looks at how Nokia has been "making all the right moves in the key markets of China and India." According to the article, Nokia is the top brand in both countries. "In China last year, it had nearly 31% of a crowded market, well ahead of the 10% controlled by No. 2 Motorola. Nokia's sales in Greater China (the mainland, Hong Kong, and Taiwan) jumped by 28%, to $4.5 billion. The region today is the company's biggest market, accounting for 11% of global revenues, compared with 8% in the U.S. In India, Nokia has a 60% share, with sales last year of about $1 billion. By 2010 the company expects India to be its No. 2 market."

Nokia is also making major investments in both countries to ensure it stays on top. Neil Mawston at Strategy Analytics said, "China and India are critical to Nokia's overall strategy and they can only get more important."

The article notes that only "a few years ago, Nokia faced big troubles in both countries. In India, growth was sluggish. Nokia was an early mover -- the country's first cell-phone call was made on one of its handsets -- but regulation hindered expansion. In China, Nokia not only trailed Motorola but was threatened by ascendant domestic players such as TCL and Ningbo Bird."

Ted Dean at BDA China said, they "were caught off guard by the rise of the domestic vendors. Suddenly, Nokia was struggling."

Nokia turned around their efforts in both countries and also benefitted from "rivals' missteps. Motorola was slower in reacting to the threat from the Chinese locals and has had a tougher time bouncing back." Chris Han at Norson Telecom Consulting said, "Motorola didn't change its strategy for a long time." In addition, the "Chinese upstarts, meanwhile, have suffered sharp reversals due to disappointing quality. In India, Motorola didn't focus on the market early enough. Today its share there is just 5% or so."