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Nokia on the Global Market: How to Compete with Other Companies? Cissy Aixi Xu.

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Presentation on theme: "Nokia on the Global Market: How to Compete with Other Companies? Cissy Aixi Xu."— Presentation transcript:

1 Nokia on the Global Market: How to Compete with Other Companies? Cissy Aixi Xu

2 Agenda Introduction Background Information Problem of Nokia Benchmarks Apple Inc. Samsung Recommendation Shareholder Concerns Conclusion

3 Introduction Lost mobile sales since April 2010 Background Information a.Current situation of global smartphone market b.Current situation of Nokia c.Current situation of other main companies d.Profit margins for smartphones

4 a.Current situation of global smartphone market 25% of worldwide mobile sales Table 1 Worldwide Smartphone Sales to End Users by Operating System in 2Q11 (Thousands of Units) Operating System2Q11 Units2Q11 Market Share (%) 2Q10 Units2Q10 Market Share (%) Android (Google)46, , Symbian23, , iOS (Apple)19, , Research In Motion12, , Bada2, Microsoft1, , Others1, , Total107, ,

5 Table 2 Worldwide Mobile Device Sales to End Users by Vendor in 2Q11 (Thousands of Units) Vendor2Q11 Units2Q11 Market Share (%) 2Q10 Units2Q10 Market Share (%) Nokia97, , Samsung69, , LG24, , Apple19, , ZTE13, , Research In Motion12, , HTC11, , Motorola10, , Huawei Device9, , Sony Ericsson7, , Others153, , Total428, ,

6 Calculation: Plays an important role

7 b. Current situation of Nokia 7.5% decrease in worldwide mobile sales Huge decline of smartphone market share: 27.5% Dec to 15.5% Sep gartner.com/it/page.jsp?id= Worldwide Mobile Device Sales to End Users byNokiain 2Q11 (Thousands of Units)

8 27.5% Dec % Sep

9 c. Current situation of other main companies Six main manufacturers of smartphones: Nokia, Apple, RIM, Samsung, HTC, and Motorola Increase rapidly: Apple, Samsung, HTC

10 d. Profit margins for smartphones Top-end smartphone: 36% e.g. Apples iPhone Mid-end smartphone: 1% -15% e.g. Nokia: 1. Mid-end & low-end smartphone 2. Big volumes & lower revenue

11 Problem of Nokia a.Worldwide mobile sales declined quickly b.Not improve technology of Symbian system c.No powerful top-end smartphone d.Weaker than its competitors

12 Benchmarks Apple Inc. Fastest selling top-end smartphones of all time Touch screen, advanced features, and minimal hardware 2Q11: 19,628 thousands of units 2Q10: 8,743 thousands of units Development of iSO technology Release new phone on every year: iPhone to iPhone 4S (since 2007) iPhone 4S

13 Benchmarks Samsung Second highest percentage of global mobile sale Refresh system Select with latest innovations and most popular features Become first main manufacturer Galaxy phones with Android system (2010) Samsung Galaxy S II

14 Recommendation 1. Changing focus on top-end smartphone 2. New Windows phone with new technology 3. Keeping basic phone market

15 1. Changing focus on top-end smartphone Large sales on basic phone & low-end smartphone Need top-end smartphone Attract more top-end smartphone customers

16 2. New Windows phone with new technology New Windows phone a)On Feb. 11, 2011 b)began its partnership with Microsoft c)Nokia: hardware Microsoft: Microsoft Windows Phone software d)Aim at top-end & mid-end users: Lumia 800 & Lumia 710 e)Powerful combination

17 2. New Windows phone with new technology First Advantage: Having a top-end smartphone to compete Can succeed at top-end & mid-end market, Then reclaim the leadership position

18 2. New Windows phone with new technology Second Advantage: Open doors to four largest U.S. operators a)U.S. operators: control > 90% of phone sales b)Acquirers of smartphone increase quickly (U.S.) c)U.S. smartphone market: worlds largest

19 2. New Windows phone with new technology Second Advantage: to U.S. smartphone market d) Nokia: only 2% smartphone market share e) Windows Mobile/WP7 Phones: only 8% shares Good opportunity to entry U.S. market

20 3. Keeping basic phone market a)75% basic mobile sales b)Large number of Customers: basic & low-end market a)New Phone: need time to be accepted a)Keep Symbian system & not lose existing customers

21 Shareholder Concerns Q: Why not stick with the Symbian system and improve upon it? A: The system 1. cannot be improved based on technology 2. cannot refresh with the latest innovations 3. cannot make more profit 4. cannot compete with other top-end smartphone

22 Conclusion Earn more Smartphone market shares More competitive Play an important and consolidated role Need long time too late to enter top-end smartphone market

23 Questions?


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