Nokia Set for Rebound in India
The Finnish giant, which has been having a tough time of late, lost 11.8 percent market share in India in the 12 months to the end of March 2010, according to Voice&Data. (See Nokia N8 is Late , 'Nokia Is Back!', Nokia Dumps CEO, Hires Elop, and Nokia's 'Fightback' Man Quits .)
Nokia's market share fell to 52.2 percent in 2009-10, from 64 percent in 2008-09, so it is still the clear market leader, way ahead of second place Samsung Corp. , which commands a 17.4 percent share.
Despite its ongoing dominance, the trend is a worrying one for Nokia. Its year-on-year loss was largely due to the increasing availability of inexpensive devices from indigenous manufacturers, which are offering handsets at very low prices. (See Gartner Forecasts Handset Sales in India, Akai Joins India's Handset Market, and Indian Handset Firms Grab Market Share.)
The Indian handset market is extremely cluttered, with a number of domestic handset players having entered the fray in recent times. Until about two years ago the market was dominated by such multinational vendors as Nokia, Samsung, Sony Ericsson Mobile Communications , and LG Electronics Inc. (London: LGLD; Korea: 6657.KS) . However, in the past year or so a number of local vendors, including Karbonn Mobiles and Micromax Informatics Ltd. , have entered the market, targeting sales in the mid-sized and smaller cities and towns and quickly winning market share. (See Indian Handset Firms Grab Market Share and Akai Joins India's Handset Market.)
But Nokia seems to be fighting back. "Nokia has definitely stopped losing market share. We feel the company is growing in the metros and big cities, but is still to record growth in the small towns and cities," says Subhash Chandra, proprietor of Sangeetha Mobiles, which has around 70 outlets in three states in the southern part of the country.
This is corroborated by another distributor, who spoke on condition of anonymity. "They are on their way to recovery. However, a lot will depend on the response to the recently launched handsets in the dual-SIM category. Nokia is a little late in coming up with a product for this category," notes the distributor.
Nokia recently launched the Nokia C1 (C1-00) and Nokia C2 (C2-00) in the dual-SIM category in an attempt to woo customers looking for low-priced devices.
At the other end of the device spectrum, Nokia has a greater than 50 percent share of the smartphone market and is investing in the segment, especially since this market is likely to grow as more Indian mobile operators launch 3G services later this year and into 2011. (See More 3G Action in India, India's 3G Equipment Market a 'Bloodbath', India Gets Its 3G On, and India's 3G Players Ready for Swift Launch.)
The company is soon to launch Nokia E5 and Nokia C6 in this segment of the Indian market.
"Our global strategy is to drive smartphone capabilities into newer ranges of devices, at increasingly affordable price points," says a Nokia spokesperson. "We have been focused on democratizing access to smartphones, and have launched and announced a whole range of handsets across the mid- and high-end segments. We have also expanded smartphone capabilities and features into mid-range [devices], such as the Nokia 5230 and the newly launched Nokia C3, which aims to democratize social networking and chat."
Nokia may also benefit from the recent BlackBerry controversy, which has put a question mark against the near-term popularity of BlackBerry devices in India. (See BlackBerry Avoids Ban in India, Indian Ops Told to Sniff BlackBerrys, and RIM Reprieve .)
However, not everyone thinks Nokia has turned the corner in India. "We feel Nokia is not making any great comeback in the Indian market. We believe the other smaller players will continue to eat into Nokia's market share," says Anshul Gupta, a principal analyst at Gartner Inc.
— Gagandeep Kaur, India Editor, Light Reading