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How to save a Sinking ship: Measures Nokia & BlackBerry have taken

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As the dust settles on a hectic first quarter in the world of mobiles, we see a clear winner emerge out of the highly competitive mobile market. Samsung has taken top honours in the last quarter with up to 28% increase in its sales figures in the same quarter last year moving from sale of 68.8 Mln handsets to sale of 86.5 Mln handsets.

The mobile world has a new leader and the old giants Nokia and RIM have been left in the shadow by a new order. What would happen to these two companies who, for a long time ruled over the world of mobile phones and smartphones only to be destroyed steadily by the emergence of the iPhone and then the Androids?

This post takes a look at measures taken by both Nokia and BlackBerry to stop their decline. Interestingly though, they seem similar.

Tale of Two Sinking Ships

Nokia have finally lost its throne as the mobile phone leader in the world, a title it held for close to 15 years. After ruling as the world’s largest mobile vendor in the first quarter of 2011 with sales of 107 Mln phones, Nokia has had a significant fall, selling just 83.2 Mln handsets in Q1 2012. Nokia has lost significant market share as well falling from 25% last year to 19% this year. The story of BlackBerry has been one even a great tragedian couldn’t envision, as it moves from one bad year to another. Research in Motion have managed to sell barely 9 Mln handsets in Q1 2012 falling from 13Mn in the same quarter last year. Clearly, the sun seems to be setting over the Canadian firm with a high profile take over in the horizon.

The Fins and the Canadians have found the going tough in the past few years with significant losses not just in Market Share, but even in shareholder faith. Nokia and RIM have been the biggest losers in recent years as far as Market Capitalization goes (see figure below).

As shareholders jump ship and invest in high return stocks of Apple, Google and even Microsoft, RIM and Nokia have the tough task of growing trust among not just shareholders, but even channel partners and customers. A task achieved once by a certain genius in a turtle neck, a decade back.

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The measures taken by both RIM and Nokia are not very different, when one takes a broad look at the changes.

Changing OS priorities

Nokia moved on from their Symbian platform to concentrate on the Windows platform, partly to help fund itself with Microsoft’s royalties and in part to help stem the onslaught of the Android. Nokia has moved from working on both hardware and software development to concentrating on its hardware business, while using Microsoft’s Windows 7.5 as its preferred OS and launched its Lumia range of smartphones.

Nokia has already launched the Nokia Lumia 800, Nokia Lumia 710 and recently the Nokia Lumia 610, said to be the cheapest Windows phone. Nokia Lumia range of smartphones, despite its early buzz hasn’t really helped the cause of Nokia revival so far. Perhaps the launch of Nokia Lumia 900 may change things for the Windows camp.

RIM is showing similar tendency in terms of focus on new Touch screen based OS rather than QWERTY phones. The BlackBerry 10 seems promising as an OS with some truly amazing features such as Time warp which lets you take high quality pictures, or the new seamless Flow UI as well as the highly intuitive virtual keypad. The question however remains whether BlackBerry will succeed in keeping loyalists happy, moving away from its traditional QWERTY keypad phones.

Wooing the Developers

Both Nokia and RIM are desperately trying to woo developers for their respective Operating Systems. While Nokia has the power of Microsoft’s large base of developers to leverage, BlackBerry is fighting the battle fairly single handed. Nokia has tied up with Microsoft to develop App Campus, an initiative at the Aalto University, Helsinki to train App developers to develop applications exclusively for the Windows OS.

The initiative costs both companies 9 Million Euros each. In addition Nokia has conducted several drives such as providing free Lumia 800 handsets, providing funding for app development as well as help in marketing the App. Nokia in short has tried everything possible to woo the developers already smitten with iOS and Android.

BlackBerry has already begun wooing developers in China by setting up developer programs in universities in China as well as promising development funding, free Blackberry devices and app support. RIM’s strategy seems to mimic the efforts of Nokia and Microsoft. Whether either company will manage to succeed in exciting the developers to create exclusive Apps is left to be seen.

Spreading across product segments

Nokia has always had a wide product range catering to just about every kind of customer. Be it the premium smartphone user or the rural customer who just needs the basic functionality at affordable prices. Nokia has further built on it with recent announcements for low cost mobile phones such as the Nokia 103, the cheapest mobile phone ever made by Nokia for African markets. Nokia will launch mobiles on both ends of the spectrum, with the high profile Nokia Lumia 900 being launched sometime in the next quarter as well as the Nokia PureView 808.

BlackBerry on the other hand is steadily climbing down the price ladder with more affordable models making its entry in developing markets such as India. The BlackBerry Curve 9220 being launched at a price of Rs 10,149 as well as the BlackBerry Curve 8520 being available for Rs 7999, the phone has finally become affordable to a whole new stratum of society. BlackBerry will do well to woo these customers with cheaper BBM messaging plans and other initiatives.

RIM’s current data plans are actually exorbitant considering a user has to pay close to Rs 400 even for basic browsing and email where as other mobile users can get a Rs98 pack for 1GB of data.

Summary

The mobile phone market has always been volatile with new players often entering and exiting, and a new leader emerging in some segment or the other. While Nokia’s reign over the mobile phone market has come to an end, things may not be set in stone yet.

Nokia can still pull itself out mainly due to its huge brand value and large market presence. The association with Microsoft will greatly add to Nokia’s efforts. Meanwhile BlackBerry will do what it does best, create enterprise friendly phones with great messaging and mailing features and carve itself a niche.

The ships may be sinking, but there is still plenty of firepower left in them.

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