Nokia: ‘We will win back market share’


14 Jun 2004

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HELSINKI – Nokia CEO Jorma Ollila vowed that the mobile giant would arrest its declining market share and drive future growth across a range of product segments.

Speaking this morning at the annual Nokia Connections conference, Ollila said that despite the slippage to a 28pc share globally, he stood by his previous market share forecasts. “40pc continues to be our goal. It’s a good target and will continue to be so.” He would not, however, commit to a date for achieving this objective.

Ollila said that the company was taking a number of measures to reverse the decline, among them a more aggressive culling of unpromising handset prototypes and price cuts on selected models. “We will compromise on margin somewhat to gain better traction in some key segments of the marketplace,” he explained, “but there will be no price war.”

With mobile handset sales set to hit 600m units this year, Ollila said that Nokia had the strategy to capture a significant chunk of this new business. This strategy would involve: continuing to expand its voice business in fast-growing markets such as India where it is market leader with its handset sales doubling in the past 12 months; growing its MMS/camera phone business; and driving demand for smartphones in the corporate sector.

Nokia has been criticised for being slow to respond to the growing popularity of clamshell flip-phones – a hesitation that archrival Motorola has been taking full advantage of. Ollila said the company was putting this right and would have five clamshells on the market by the end of the year. Three of them were launched this morning: the 6710 MMS phone aimed at the mid-price market; the 2650, Nokia’s first entry-level phone to feature a colour screen; and the 6260, a high-end business handset that includes ‘push-to-talk’ instant communication as well as email and bluetooth connectivity.

The taciturn CEO also unveiled two other new phones – among 35 new handsets the company will bring to market in 2004. One was another entry-level phone – the 2600. But far more significant was the arrival of Nokia’s newest 3G phone, the 6630, a tri-band camera phone designed to work on 3G (Wideband CDMA), EDGE and 2G platforms. The 6630 is also a smartphone that allows users to connect to their work mail and synchronise with data on their PC. With its camera and mobile office capabilities, the 6630 is designed to appeal to both business users and early adopter consumers.

Juha Putrikanta, senior vice president, Imaging, Nokia Multimedia, added that the growth in demand for smartphones would continue as more and more services were launched by operators. “For operators, the smarter the device, the greater the ARPU [average revenue per user],” he pointed out.

While product innovation continues to be important, Ollila emphasised that the company was also heeding market trends such as the desire on the part of networks to build their own brands customised services, such as Vodafone Live! “This spring we have put more resources behind technology customisation to support the service differentiation strategies of our competitors.” He added, however, that there would be no scaling back on Nokia’s aggressive brand-building efforts worldwide.

By Brian Skelly