Mumbai: A decade back, Nokia’s leadership position in India and globally was almost unassailable. But riding on the success of Android-based phones, South Korean handset maker Samsung Electronics Co. Ltd has severely dented the Finnish company’s fortunes.
Head-to-head: A mobile phone shop in Delhi. Samsung has already toppled Nokia in the Indian smartphone segment. Photo: Ramesh Pathania/Mint
This year, not only did Samsung break Nokia’s 14-year record of being the world’s largest handset maker by overtaking it in terms of unit shipments in the January-March quarter, according to a report in April by research firm Strategy Analytics, it is also threatening to upstage Nokia in the overall Indian mobile phone market.
It has already toppled Nokia in the Indian smartphone segment. Research firm Convergence Catalyst pegs Samsung’s share in India in the January-March quarter at 45%, way above Nokia’s 25-30%. It estimates 9-9.5 million smartphones to have been sold in India in 2011.
“The year was also significant in that smartphones breached the $100 (around Rs 5,300) price point with Android devices being launched in the market in Q4 2011,” said Jayanth Kolla, co-founder and partner, Convergence Catalyst. “Although Nokia had a strong lead in the smartphone segment in the first half of the year (started 2011 with close to 60% and ended Q4 with sub-40% share), Samsung has gained significant market share in the last two quarters (June-December) and is the player to watch in 2012.”
To compound matters, according to an April report by market tracker GfK-Nielsen, Samsung India also overtook Nokia in India in overall retail revenue in March. It had a 34.2% share of mobile phone retail revenue in March 2012 as against Nokia’s 33.8%.
Samsung, however, lags behind Nokia in unit shipments (volumes) in India. In the overall mobile phone space in India, Nokia retained leadership with a 30% marketshare in the October-December 2011 quarter, with Samsung following at 14.4%, according to shipment numbers by CyberMedia Research. But the research firm also reveals that Nokia has been steadily losing marketshare in India, dropping over the years: 2008 (55%), 2009 (54%), 2010 (30%), 2011 (30%).
With Samsung at its heels, the Nokia India management is leaving nothing to chance.
“Nokia is in transition, but on the dot as far as the markets are concerned,” said D. Shivakumar, senior vice-president, sales (India, Middle East and Africa), Nokia. “We are following the global Nokia strategy of strengthening three pillars. The first is our partnership with Microsoft Corp. for Lumia phones based on the company’s Windows operating system (OS). We have received good success here. The second pillar is about connecting the next billion to the Internet with mobile-Internet phones. And the third is about ‘future disruptions’.”
The company is attempting to get its act together by strengthening its portfolio with the introduction of the Lumia 900 and adding the Nokia 808 PureView to add to its smartphone arsenal. Both are expected to be launched by the end of this month, he said.
In the smartphone segment, the company has two models—the Lumia 710 and 800—which sold between 18,000 units and 22,000 units together per month in the January-March quarter, according to industry estimates. Nokia does not give India figures for the Lumia brands, which were introduced in December 2011.
With the PureView, which boasts a 41 megapixel (MP) camera, Nokia is expected to target users who want to benefit from augmented reality (AR) technology that will allow them to get additional data on hotels, monuments and other points of interest by simply aiming the camera at such locations. PureView, according to industry buzz, will be priced at around Rs 30,000.
On “connecting the next billion to the Internet”, Shivakumar said in the last four months, Nokia India had introduced eight products under the Asha brand, which comprises Internet-connected phones. Moreover, the company has dual-SIM phones as also around 80,000 applications or apps. “We are adding around 300 apps daily,” said Shivakumar.
Nokia this month announced partnerships with Vodafone India and Bharti Airtel to offer integrated billing solutions on the Nokia Store. Nokia Store India currently sees more than 60 million downloads a month.
It’s also strengthening its offering with features such as Nokia Maps, Nokia Drive and location-based services to increase stickability. “Today, the Internet is well organized around the ‘what’ and the ‘who’ via search engines and social networks, and Nokia is committed to provide the answer to the ‘where’,” said Vipul Mehrotra, director and head (smart devices), Nokia India.
The company rolled out the Nokia Drive traffic service in the country this March, that’s aimed at helping users avoid jams.
The service, available to users in Delhi and Mumbai, will potentially be able to deliver comprehensive, real-time traffic information to users, the company said. The traffic update is available on Symbian smartphones through Nokia Drive, and on Nokia Lumia 800 and Nokia Lumia 710 through Nokia Maps.
“Globally, our maps are used 100 million times a day, and 2.4 million changes are made daily to these maps, making them a ‘learning platform’,” said Mehrotra. “In India, our maps cover over 20 million points of interest.”
While Nokia is getting its act together, analysts maintain that Google’s Android OS has helped Samsung gain traction while Nokia is betting on Windows.
“Both Android and Bada (Samsung’s mobile OS) gained significant market share in Q4 2011, largely due to Samsung’s strong momentum in the smartphone segment,” said Kolla of Convergence Catalyst.
He reasoned that Samsung has more Android devices and only a few of those that run the Windows OS, which is helping the South Korean company. “By Q4 2011, the Android share in India grew close to that of Symbian and is expected to overtake it in 2012,” Kolla said.
While the decline of the Symbian OS, which Nokia plans to phase out by 2016, “is expected to be far more drastic globally, we expect it to still hold a respectable 23.3% share in 2012, based on the strong equity that Nokia has in India. However, we do not expect Windows Phone to be a major player in 2012 as it will not be available in the low- and mid-end price ranges, unlike Android,” he said.
Naveen Mishra, lead analyst, CyberMedia Research telecoms practice, said Nokia would have to widen its Lumia range in the country to fight competitors but added that the dual-SIM phones and the Asha series would help boost sales in India.
“Nokia’s efforts are in the right direction,” he said. “Nokia Drive, Nokia Music and Nokia Maps—all of which are offered free to Nokia users—are differentiating features. However, one will have to see how the Lumia series adoption picks up in this market.”
leslie.m@livemint.com
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