Nokia announced their most recent quarterly results yesterday, and of course they dominate the world and are failing embarrassingly and miserably in the US.
This is not news, nor is this a surprise. The question is how low they can go here. Nokia seems to be pretty happy turning into a sort of elite, boutique brand that doesn't actually have to sell any phones. I've often gotten the feeling that if they could back out of the US market entirely, they would; they're shackled to some sort of US presence because they're on Wall Street, and Wall Street likes to see companies that sell products somewhere near Wall Street.
Nokia used to do somewhat better here. Their fall in the US has been marked by two things: the rise of their N-series and E-series phones worldwide, and their abandonment of the CDMA market that makes up 60% of US sales.
More ranting below ...
When Nokia made CDMA phones, they were considered excellent devices. Then, because Nokia hates Qualcomm who own many of the patents on CDMA, they decided to replace their own CDMA devices by taking a trip to some Korean trade fair with a Brother P-Touch label-making machine, slapping the Nokia brand onto whatever cheap crap they could pick up. Needless to say, that pretty much ruined a brand that once stood for reliability and quality on Verizon and Sprint.
The N-series multimedia phones and E-series business phones have driven Nokia's market share and profits throughout the developed world. Nokia is cataclysmically unable to get any of them into US carrier channels. The few they've managed to get AT&T to squeeze out, such as the N75 and E62, have appeared both late and crippled compared to the rest of Nokia's product line. Nokia's relationships with carriers, meanwhile, seem to be very poor; AT&T retired the E62 early and didn't bother to market it much. And before you blame AT&T entirely, explain to me why Samsung, Motorola, RIM, HTC and Apple can all get plenty of smart phones out on US carriers while Nokia can't.
Nokia sells their full line of unlocked phones through their own Web site and stores, and I bless them for that; they're heroes in terms of pushing the Gospel of Unlocked in the United States. The phones are often great - I give them Editor's Choice awards regularly. But in the nation of Wal-Mart, subsidized phones in carrier channels are what sells. And before you get all high and mighty about Europe, Nokia has no such problem there - one of the reasons for the N95's rollicking success was extremely heavy operator subsidies in markets like the UK.
Nokia has told me they have a plan for succeeding in the US. I'm just not very sure what it is. Also, they told me they had a plan last year. Also the year before. Different plans, I think. Perhaps they should talk to someone at Samsung about successfully executing marketing plans.
But here's my guess: they've given up on our entire 3G market and are positioning themselves for 4G. The fourth-generation wireless technologies launching around 2010-11, LTE and WiMax, are both Nokia specialties. With Verizon, AT&T and T-Mobile all going to LTE and Sprint on WiMAX, Nokia will finally have a cutting-edge four-carrier portfolio. Nokia is a rich enough company to continue to bobble around for a while and then to come roaring back when the landscape favors them three years from now.
The good news for Nokia investors is, the 300 million wealthy consumers in the US seem to matter not at all to Nokia's global market share and profits. But it's still strange to see how, after two years of pretty much nonstop rolling failure, how Nokia continues to hit new lows in this market.
What do you think?
Stumble
Digg
del.icio.us
Slashdot
January 26, 2008 4:05 AM
Yes, it's incredible how US is abuzz with the relative success of the iPhone. According to Apple's own figures, they sold 4 million iPhones last year globally. Meanwhile, Nokia sold 133 million phones in Q4 alone!!!
Nothing against Apple, iPhone or US market, but the real story is happening elsewhere, in China, India, even in Africa. From Nokia's perspective, the US is a fringe market with imcompatible technologies and strange, operator-driven business models.
January 26, 2008 9:59 AM
It's strange that even though Nokia has done a great job worldwide and again come out on top, that people still have to be negative against then. Why not just say 'Great job, well done!". But no, because the US is using stone-age CDMA technology, a global company like Nokia should backtrack to support them?? I dont think so and 3G is being supported extremely well worldwide by Nokia. So should Nokia restructure?? or should the US??
January 26, 2008 12:05 PM
Alarm bells are going of in my head.
You're absolutely right Sascha, but I'm getting some serious deja vu here. Nokia has tried this exact strategy before, and it failed spectacularly. In fact, it's a big part of what put them in their current slump in the US.
What I'm talking about is EV-DV.
Four years ago, CDMA carriers were just starting to build their EV-DO networks, and already planning to upgrade to EV-DV right after that. EV-DV was the clear path to next-generation networks. There was no alternative at the time.
Nokia hated Qualcomm, (as always,) so they decided to try and beat Qualcomm at their own game. They teamed up with TI to build EV-DV chips and get them to market before Qualcomm could. They decided to SKIP EV-DO and bet big on the next technology after that, much as they are doing now with LTE and WiMAX.
But with EV-DV, they lost that bet. They underestimated Qualcomm as a competitor. What the big Q did was grab the entire CDMA roadmap by the horns and steer it away from Nokia and TI. They pulled the rug out from under them inventing this little thing called EV-DO Rev A, with an upgrade path to an all-IP network using VoIP-like technology. Then they used their good relationships with carriers to get them on board with this idea - which simply erased EV-DV from the roadmap - leaving Nokia and TI utterly screwed.
The situation today is a little different, but not that much. It makes me nervous for Nokia.
January 26, 2008 1:32 PM
D'oh! Rich, who is one of the people who knows the market better than I do, hit a major gap in my little narrative. I had forgotten about the whole EV-DV disaster. Thanks for filling that in!
Karen and Dazmonic, you totally miss the point. I'm writing for the 300 million consumers in the US - and for those readers, what's happening in Africa is completely irrelevant. Now, if Nokia went ahead and said, "the US is too much trouble; we're going to bow out," I could certainly respect that. I'd be sad, but I'd respect that. Other manufacturers have made that call too. But no - Nokia keeps, year after year, saying "we're going to lead in the US" and failing. You're right that they're a very successful company, which makes their inability to follow through on this stated goal much more interesting than it would be otherwise.
January 27, 2008 10:45 PM
The main reason Nokia doesn't do well in the US is their phones are crappy quality. I used to only buy Nokias and now I avoid them like the plague. The UI is good but that's it. Plus people are flocking to smartphones and theirs are a joke.
February 2, 2008 7:05 PM
Well, Nokia certainly isn't on good terms with the operators on the US market and the way the market works in the US causes Nokia's current situation in the US market. Only simple models or castrated versions like the E62 find their way to the operators' shelves. From an European or Asian point of view, the US cellphone market is a backward, hillibilly ( no offense aigainst them ), almost stoneage market, about as badly flunked as the Europeans at first did flunk the computing and Internet business in the mid 90s ( although Europe has bypassed the US in broadband access etc nowadays ).
I think the big winner on the introduction of the iPhone will be Nokia, because it seems to make US consumers ready to cough up a lot more of cash than before to aquire a "smart phone", thus creating a demand for such devices and Nokia do happen to have a lot of REAL smart phones in their product portfolio, and those models are excellent ones and what's important too, there's outside the US a thriving market with applications for Nokia's smart phones from 3rd party developers, both commercial and non-commercial. ( For example, I can ensure you that it is nice to be able to open a secure console connection with your cell phone to your server or workstation and do wathever you need if needed, not having to luga raound your laptop all the time ;) This and a lot of other things you can do with real smart phones like those made by Nokia... )
February 6, 2008 8:30 PM
I'm unhappy with Nokia product & Service.
Details can't be found in my post (gorizont) at
http://discussions.europe.nokia.com/discussions/board/message?board.id=phones&message.id=34109
May 19, 2008 1:15 AM
Nokia really don't need the US market when it those so well in the world, even though some people think if it's not big in the US it's not doing well. but when the i-phone was introduce in the US it was the biggest thing ever when at the same time it wasn't open to the rest of the world funny how it was no problem for them? I guess 4million is good numbers compared to the 300 million consumers in the USA which Nokia sold around 300 to 400 million devices around the same time?
October 4, 2008 7:31 AM
It is no suprise that Nokia is not so popular in the USA.
These facts and numbers, are not the real reason; Nokia selling unlocked phones on their websites is actually the greatest thing that can happen to mankind!
American people are lazy people, which is not a bad thing for them; they are not lazy at their jobs, they just do not want to learn what they do not need to learn.
If Verizon, ATT, etc... carries a device then people know about it and ask questions to a customer rep on ATT! Well, customer rep working on cell carriers have no idea about world market because they just work there for money, they have no interest of learning, researching(unfortunately this is true for nokia flagship stores! NOKIA hire people from Finland there or at least people who knows what HSDPA is!)
So in a society where people only learn what they are introduced to learn by cell phone carriers, it is no wonder why they do not know about Nokia.
This happened before with ipods, I had an mp3 player(RCA) 3-4 years before ipods and then ipods came along people thought it was a new invention!
Can you imagine Times magazine said Iphone is the invention of the year! Well Nokia 66XX series did multitasking! I could download music on the go with that phone! read rss, browse web, listen to music etc... etc... etc... Iphones today still cannot do(3rd party)multitasking! 66XX series surely did more than "invention" calling that device invention is pure ignorance!
Well Nokia save your time, and your energy!
DO NOT CHANGE TO BE ABLE TO HIT THE US MARKETS!
Nokia is a company for people who deserves to own a NOKIA!
It is a prerogative to own a Nokia device.