In 2007, Nokia was the undisputed champion and the biggest brand in the mobile phone industry but it is no longer a heavy weight. Nokia which was valued at $150 Billion in 2008 but has now slipped to an overall valuation of only $6 Billion. The company is currently in a bad state and they are losing money every quarter. During the earnings call last week, Nokia posted an operating loss of $1 Billion for the last Q2, 2012.
Nokia’s downfall can be linked to the entry of Apple and Google in the smartphone industry with their iOS and Android operating systems. When Apple released the first model of iPhone in 2007, it lacked many important features but on the other hand it also came up with some revolutionary solutions such as capacitive touchscreen, pinch-to-zoom function and the use of accelerometer for the screen orientation.
Just 2 years later, Google came up with their own so called ‘open source’ operating system; Android which, is now the biggest smartphone platform within just 3 years of its entry. Both Apple and Google combined have captured almost complete global smartphone market share.
Things may seem to be going from bad to worse for the fins, but there is a slight silver lining in the cloud. Nokia dominates the multi sim market in key markets such as India and its sales of Nokia Lumia range of smartphones have been promising. As the price of Nokia mobiles start falling and Nokia attempts to appeal to broader spectrum of consumers across different countries, one can’t help but wonder Can Nokia bounce back to compete with Apple and Google?
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Dual Sim domination and the hope of Windows 8
On a brighter note, Nokia is selling a lot of entry level phones in South-Asian and African countries. These sales are largely contributed by Dual-SIM phones, Asha series phones and other phones based on Series 40 OS.
But the problem with these phones is, there is very less average profit per device. On the other hand, Apple earns $575 of profit per iPhone sold and acquires almost 2/3rd of the whole smartphone industry profits.
Nokia currently holds a market share of 30% in India; the case is similar in most other developing markets. Nokia is currently holding the onslaught of Samsung in these markets largely with the help of their Dual Sim Asha series phones.
After joining hands with Microsoft, Nokia released some good smartphones based on the Windows Phone platform. These devices are good, but they are not better than the competition in any way. That is solely because; there were many limitations in the OS itself which ties the device to get any better than devices on competition platforms.
Microsoft displayed their much awaited Windows Phone 8 platform codenamed ‘Apollo’ and from the looks of it, it seems to be a pretty solid update. They have taken a 2-step jump in the hardware with A15 architecture based multi-core processors, HD Retina Displays and a completely new kernel.
It is being reported that Nokia is bullish on the success of upcoming Windows Phone 8 and it is trying to get some exclusive carrier partners in Europe.
The Android Fall Back
Before joining hands with Microsoft as their exclusive high-end smartphone platform, Nokia considered Android and had some discussions with Google.
Nokia had to scrap the plan because they did not want to compete in a platform that ‘already has too many players’. But if nothing works out as planned with Microsoft, Android can still be a viable option. This was voiced aloud in a Finnish television interview by a member of the Board of directors.
If Nokia goes ahead with Android, they will have to try and beat Samsung and HTC which are the only brands doing some innovation for that platform. Samsung and HTC already dominate the Android market but it is not impossible to beat the titans.
Nokia maybe better equipped to take on the challenge of competing with Samsung on the Android platform, but with waning market shares and falling brand loyalty, Nokia may find itself hard pressed to put up a good fight.
Android for now remains just a fall back plan, one that Nokia may not need should Windows8 prove successful. If Nokia does however join the Android brigade, it maybe curtains to all the other mobile operating systems including Windows and Bada and the Meego revival.
Mozilla’s Open Source Firefox OS Can Be a Viable Option Too!
Mozilla, the company behind one of the best and popular Firefox web browser, is prepping up an open source smartphone platform completely based on web technologies such as HTML5 and JavaScript.
Mozilla displayed the Firefox OS codenamed ‘Boot2Gecko‘ on a Samsung Galaxy S2 sample. Nokia might consider it as an alternative choice to Windows Phone as it is built upon open web standards and the platform is ‘too crowded’ as Nokia desires. For Nokia however, this decision would prove their earlier decision to abandon Meego futile. It would probably be a last resort attempt to avoid Android and maintain exclusivity.
For now however, Mozilla’s Operating System may be nothing more than a minor alternative in the long list of mobile OSes.
Can Nokia Bounce Back?
For Nokia the journey from the top of the smartphone market to being just another player has been rather sudden and unexpected. But there was one surprising line of silver light, they sold more than 6 million Lumia devices and their popularity in the US has increased dramatically during the last quarter.
The Nokia Lumia 900 has been one of the best seller smartphone due to good design and LTE connectivity, all at cheap price of $99 which was further slashed to $49. Windows 8 as well as the rise in dual sim mobile sales can help Nokia fight their way back to the top of the smartphone heap, if not beat Samsung, they can surely work their way to become the second leading smartphone vendor in the world. Should Windows fail however, Nokia can still consider other smartphone platforms like Android, Tizen and Mozilla Firefox OS.
It may take a while to see how things pan out, however one thing is certain, the world has seen great comebacks, it may not be impossible to see another one in the offing.
[About the Author: Ashwin Sreekumar heads Marketing at MySmartprice and is an MS graduate from State University of New York, University at Buffalo. He has avid interest in eCommerce, marketing , technology and smartphones.]