Nokia doesn't see a turnaround in the US till 08

[Fire14]

Nokia Says U.S. Turnaround Unlikely Until 2008


It may be a small consolation to struggling Motorola, but European rival Nokia is rapidly losing market share on the US company's home turf.

Nokia on Thursday said that while its global market share rose to 36% in the first quarter from 35% a year earlier, it suffered a "significant" market share decline in North America.

In the region, handset volume collapsed 43% to 4.8 million units. Nokia attributed the decline to delays to the launch of its N75 smart phone as well as to "the excess inventory of certain competitor's products."

Morotola, which posted a loss in its latest quarter, recently slashed the price of some of its older handsets such as the Razr in order to get rid of an inventory buildup.

Nokia Chief Executive Olli Pekka Kallasvuo told analysts on a conference call on Thursday that he's confident the N75 will hit the U.S. market soon and that delays were mostly due to operator testing.

But observers said the arrival of the N75, with a suggested retail price of $399, may only make a small difference.

"The price of the N75 is fairly high for the U.S. market, where consumers spend less on phones than in Europe. Unless it's heavily subsidized by operators, I wouldn't expect that model to turn things around for them in the U.S.," said Carolina Milanesi, a director in the mobile device practice of tech research group Gartner in London.

She emphasized that Nokia's efforts to establish a better relationship with tier-one operators such as Verizon Wireless; Sprint Nextel, AT&T and Deutsche Telekom's T-Mobile is much more likely to bear fruit.

"They're doing the right thing now, which is to work with these guys" she said.

Still, Kallasvuo warned not to expect immediate results.

In particular, he said that a new business model at Verizon Wireless and increased cooperation with Sprint Nextel on a long-range wireless technology called WiMax are unlikely to bear fruit until 2008.

"50% of the U.S. market won't see a real impact until 2008," he said.

At AT&T, however, the story is a bit different. Kallasvuo believes the benefits of having a research-and-development center dedicated to the design of U.S.-specific products in San Diego is going to bring about higher sales this year.

"Here, AT&T is the most important target," he said.

In the enterprise-solutions segment, which provides handsets to business users and where BlackBerry maker Research in Motion (RIMM) reigns in the U.S., Nokia reported sales up 75% to 326 million euros this quarter.

But Milanesi said the segment is too much in flux at the moment, with the likes of Microsoft Corp. (MSFT) making inroads, to say for sure that Nokia is gaining share from RIM.

www.cellular-news.com/story/23269.php

[dmapr]

Originally Posted by Fire14

At AT&T, however, the story is a bit different. Kallasvuo believes the benefits of having a research-and-development center dedicated to the design of U.S.-specific products in San Diego is going to bring about higher sales this year.

Uh-oh... that's exactly what I don't want to see — I'd much prefer Nokia to continue pushing the global models. If they concentrate on the US-only camp, I'm afraid they'll have less incentives to produce quad-band GSM and will never even get to global WCDMA (however many bands that'll be).

[hf1khal]

Originally Posted by dmapr

Uh-oh... that's exactly what I don't want to see — I'd much prefer Nokia to continue pushing the global models. If they concentrate on the US-only camp, I'm afraid they'll have less incentives to produce quad-band GSM and will never even get to global WCDMA (however many bands that'll be).

I am with you on this. Specific devices are not the norm any more. I have in my last trip bought the Nokia E50 and I am shocked that Nokia has not brought that one to the US market, they do have some good ones and they are lacking in marketing in the US. Did any one notice that of over 60 kiosks that they had all over the country they are now down to 12 and if one visits the Kiosk, ne would find out that the retail price was so high that one would just walk away and that for sure does not put them on a same level to be more competetive.

[dmapr]

Originally Posted by hf1khal

I am with you on this. Specific devices are not the norm any more. I have in my last trip bought the Nokia E50 and I am shocked that Nokia has not brought that one to the US market, they do have some good ones and they are lacking in marketing in the US. Did any one notice that of over 60 kiosks that they had all over the country they are now down to 12 and if one visits the Kiosk, ne would find out that the retail price was so high that one would just walk away and that for sure does not put them on a same level to be more competetive.

When I was in Las Vegas last fall I stopped by their kiosk in a fairly busy mall — I was the only one there and the guy in the kiosk was bored stiff — said not many people stop by. But I also think it was very stupid of them to not sell anything at those kiosks — after all, the kiosk was in a mall, not at CES

[Jay2TheRescue]

Originally Posted by dmapr

When I was in Las Vegas last fall I stopped by their kiosk in a fairly busy mall — I was the only one there and the guy in the kiosk was bored stiff — said not many people stop by. But I also think it was very stupid of them to not sell anything at those kiosks — after all, the kiosk was in a mall, not at CES

Yeah, having a kiosk in the mall that doesn't sell anything is kinda stupid.

-Jay

[Fire14]

Originally Posted by hf1khal

I am shocked that Nokia has not brought that one to the US market, they do have some good ones and they are lacking in marketing in the US.

I think Nokia has fallen from grace from most of the carriers, with T-Mobile being their biggest seller.

It could be pressure Samsung has been doing, I mean look at how many Samsungs are at Cingular now vs Nokia's & Motorola's. I think they are selling these phones so cheap to the carriers, and giving them a change to make some money off the substisies, that the other manufactures are stuck and Motorola has been stuck in the "Razr" mindset isn't helping them either.

[Jay2TheRescue]

Originally Posted by Fire14

I think Nokia has fallen from grace from most of the carriers, with T-Mobile being their biggest seller.

It could be pressure Samsung has been doing, I mean look at how many Samsungs are at Cingular now vs Nokia's & Motorola's. I think they are selling these phones so cheap to the carriers, and giving them a change to make some money off the substisies, that the other manufactures are stuck and Motorola has been stuck in the "Razr" mindset isn't helping them either.

Well Samsung learned from the best. Isn't that exactly what Nokia was doing 5 years ago?

-Jay

[hf1khal]

One thing for sure is that Nokia wil also be hurting in other markets (outside Europe) and that is because their products got so expensive. In areas where I used to see 8 out of 10 using Nokia's now it is like 2 out 10 and the main reason for them not aving a new Nokia is the price factor. Why wold one want to buy a Nokia for $400 to $600 when the SE or Smasung gives more for the money and is performing as good and if not better at a price that is any where $100 to $200 cheaper. In my recent trip I saw more of those than ever. I would say that one reason for the high price is the Euro vs. the Dollar while the main other one is the profit they are looking for as a result of them thinking they got all stuck on Nokia and they will pay any thing to buy it. Another example is the fame of the V3 where many paid the high price for it and they thought they also could do the same. Yes one can price a model or 2 and make them high end but not 90% of their products. Smasung and SE played the game right.

[Telekom]

Originally Posted by hf1khal

One thing for sure is that Nokia wil also be hurting in other markets (outside Europe) and that is because their products got so expensive. In areas where I used to see 8 out of 10 using Nokia's now it is like 2 out 10 and the main reason for them not aving a new Nokia is the price factor. Why wold one want to buy a Nokia for $400 to $600 when the SE or Smasung gives more for the money and is performing as good and if not better at a price that is any where $100 to $200 cheaper. In my recent trip I saw more of those than ever. I would say that one reason for the high price is the Euro vs. the Dollar while the main other one is the profit they are looking for as a result of them thinking they got all stuck on Nokia and they will pay any thing to buy it. Another example is the fame of the V3 where many paid the high price for it and they thought they also could do the same. Yes one can price a model or 2 and make them high end but not 90% of their products. Smasung and SE played the game right.

I don't know how that can be completely true. I just got back from Europe and had a chance to go to phonehouse which is one of the bigger mobile retailers and there were many many models from Nokia and most could be had for free with a two year commitment.

[hf1khal]

Originally Posted by Telekom

I don't know how that can be completely true. I just got back from Europe and had a chance to go to phonehouse which is one of the bigger mobile retailers and there were many many models from Nokia and most could be had for free with a two year commitment.

Remember, I also said (outside Europe).

[dmapr]

Originally Posted by hf1khal

One thing for sure is that Nokia wil also be hurting in other markets (outside Europe) and that is because their products got so expensive. In areas where I used to see 8 out of 10 using Nokia's now it is like 2 out 10 and the main reason for them not aving a new Nokia is the price factor. Why wold one want to buy a Nokia for $400 to $600 when the SE or Smasung gives more for the money and is performing as good and if not better at a price that is any where $100 to $200 cheaper. In my recent trip I saw more of those than ever. I would say that one reason for the high price is the Euro vs. the Dollar while the main other one is the profit they are looking for as a result of them thinking they got all stuck on Nokia and they will pay any thing to buy it. Another example is the fame of the V3 where many paid the high price for it and they thought they also could do the same. Yes one can price a model or 2 and make them high end but not 90% of their products. Smasung and SE played the game right.

That number seems to be off, so I decided to take a look at one of the Russian stores. Of the 51 models currently available, the price breakdown was as follows:

• <$100 — 5
• $100 to $150 — 6
• $150 to $200 — 7
• $200 to $250 — 4
• $250 to $300 — 3
• $300 to $350 — 8
• $350 to $400 — 4
• $400 to $450 — 6
• > $500 — 8

The same exercise for SE:
27 total

• <$100 — 3
• $100 to $150 — 1
• $150 to $200 — 4
• $200 to $250 — 4
• $250 to $300 — 3
• $300 to $350 — 4
• $350 to $400 — 2
• $400 to $450 — 2
• > $500 — 4

Only 3 Nokia phones were priced higher than top-of the line SE. Most of these Nokia models are available in Asia as well, so maybe you just ran into a smaller demographic?

[hf1khal]

Originally Posted by dmapr

That number seems to be off, so I decided to take a look at one of the Russian stores. Of the 51 models currently available, the price breakdown was as follows:

• <$100 — 5
• $100 to $150 — 6
• $150 to $200 — 7
• $200 to $250 — 4
• $250 to $300 — 3
• $300 to $350 — 8
• $350 to $400 — 4
• $400 to $450 — 6
• > $500 — 8

The same exercise for SE:
27 total

• <$100 — 3
• $100 to $150 — 1
• $150 to $200 — 4
• $200 to $250 — 4
• $250 to $300 — 3
• $300 to $350 — 4
• $350 to $400 — 2
• $400 to $450 — 2
• > $500 — 4

Only 3 Nokia phones were priced higher than top-of the line SE. Most of these Nokia models are available in Asia as well, so maybe you just ran into a smaller demographic?

Yes the demographic is a bit diferent and most of those countries that i am talking about all go for on sitre purchase. Those are ones that users that buy from a store and not from the web. I was on a 5 nation trip and I ddi my rounds when I could and that was my findings. Discount out the web purchase and you will see whole new story.

[scotsboyuk]

It might interest you to know that for a short period in Q4 last year SE overtook Nokia in the UK. Also, as far as I am aware, SE is the top seller in Sweden. Nokia's dominance is at the global level and not necessarily always at the regional level.

What I find interesting is that Nokia seem to be focusing quite significantly on their high-end products i.e. the N series whilst SE are giving more attention to their low and mid-range handsets than they used to.

As for the American market it probably doesn't do Nokia's market share or sales much good for them not to be selling CDMA handsets. Not that the CDMA market is huge, but it still represents several tens of millions of customers in the U.S.

I disagree with the opinion presented above that Nokia shouldn't release country specific handsets. I think Nokia would actually do better in the U.S. if they released handsets that were better tailored to the U.S. market rather than simply releasing quad-band European handsets. That's not to say they shouldn't release quad-band handsets, but rather that they should look to tailor their handsets more to the market they are being sold in.

[Telekom]

Originally Posted by scotsboyuk

As for the American market it probably doesn't do Nokia's market share or sales much good for them not to be selling CDMA handsets. Not that the CDMA market is huge, but it still represents several tens of millions of customers in the U.S.

It should also be noted that until a few years ago Nokia did not have much at all in the way of clamshell styled handsets and mostly had bar form phones with a few sliders. Americans tend to prefer the clamshell designs where the Europeans generally prefer the bar form phones as well.

[scotsboyuk]

Originally Posted by Telekom

It should also be noted that until a few years ago Nokia did not have much at all in the way of clamshell styled handsets and mostly had bar form phones with a few sliders. Americans tend to prefer the clamshell designs where the Europeans generally prefer the bar form phones as well.

That's what I was thinking about when I mentioned US-centric handsets.

[dmapr]

Originally Posted by hf1khal

Yes the demographic is a bit diferent and most of those countries that i am talking about all go for on sitre purchase. Those are ones that users that buy from a store and not from the web. I was on a 5 nation trip and I ddi my rounds when I could and that was my findings. Discount out the web purchase and you will see whole new story.

That's the reason I picked that particular store — it's not a web outfit, it's like the way Best Buy is here — and their in-store prices are pretty much the same as in their B&M stores. They're also a bit more expensive than a run-of-the-mill kiosk out on the street. But the main point was that it's a lot less than 90% of the phones that are high-end

[hme83]

Originally Posted by dmapr

That's the reason I picked that particular store — it's not a web outfit, it's like the way Best Buy is here — and their in-store prices are pretty much the same as in their B&M stores. They're also a bit more expensive than a run-of-the-mill kiosk out on the street. But the main point was that it's a lot less than 90% of the phones that are high-end

Median price point for both Nokia and SE from this source would be just under $300, which doesn't really surprise me.

Nokia is a little more skewed toward the extremes - both on the low and high sides of the equation; where SE is slightly more mid-range focused and evenly spread across the mid-range price points.

I am curious - what was the top of the line price for a Nokia compared to the top of the line SE? And are they comparable phones in terms of features/functionality? Or if not, for the top of the line SE what was the price of the Nokia that would be most comparable to it? Please.

[dmapr]

Originally Posted by hme83

Median price point for both Nokia and SE from this source would be just under $300, which doesn't really surprise me.

Nokia is a little more skewed toward the extremes - both on the low and high sides of the equation; where SE is slightly more mid-range focused and evenly spread across the mid-range price points.

I am curious - what was the top of the line price for a Nokia compared to the top of the line SE? And are they comparable phones in terms of features/functionality? Or if not, for the top of the line SE what was the price of the Nokia that would be most comparable to it? Please.

The most expensive Nokia was a lowly 8800 Sirocco (lowly in terms of features), coming in at about $1150. The most expensive SE was P990i, at close to $700. BTW, all prices quoted include 18% sales tax.

[scotsboyuk]

@dmapr

Has the P990 always been $700 in America?