Nokia Reigns Over The Indian Market – But For How Long?

In a recent quarterly report released by AdMob on mobile hand sets used across the world, Nokia has emerged as the clear winner in India. Nokia owns 59% of the Indian handset market while its operating system is used on 94% of the smartphones used in India. The top 10 devices and smart phones used in this quarter in India also belong to Nokia. WATBlog has previously blogged about the competition that exists in the smartphone space. Also you can read a round up of the Indian mobile market in 2009.

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These results are in conformance with the fact that globally India is the second largest market for Nokia. There are several reasons for why Nokia holds such a strong position here. The strategies that Nokia implemented for India have fared very well.

Firstly for its handsets Nokia has set as its priority to create very strong handsets that can withstand the rough usage in the Indian conditions. It has also focused on a long battery life. To fulfill these objectives the phones are tested in 100% humidity and a wide range of temperatures(-30 to 60C). The phones are dropped 100 times from a height of one meter and its keys are pressed 10000 times to ensure longevity. These phones were made cost effective keeping the rural Indian population in mind. Moreover its collaborations with microfinancing companies, providing payment options and developing low cost accessories have also achieved their aim. To cater to the huge demand in India, Nokia has even set up a production plant in Sriperumbudur which is one among only nine in the world.

The report reveals another interesting point. Several mobile startup companies are doing an impressive job of winning over Nokia’s market base. Chief among them is Micromax. In less than 3 years old, it already boasts of a 6% market share and sells one million mobile phones per month. This quick capture of the market has happened because Nokia has ignored very important trends of the Indian market.

While concentrating on the rural market, Nokia has neglected the urban market to its disadvantage. The competitive prices and offers of telecom companies have inspired many mobile users to subscribe to more than one telecom service simultaneously.  Nokia has not released sufficient phones in the dual sim category causing users to switch to other handsets having this feature. Moreover introducing features such as social networking capabilities etc have helped other manufacturers such as INQ also create their presence.

Symbian OS has an extremely strong presence in India but it will begin to face threats as Android enters into tie ups with more and more manufacturers.

What is the future for Nokia in India?

There are several analogies and similarities that have been often drawn between the trends of India (developing countries) and the developed countries. The report shows that Apple’s high end devices have a strong presence in developed countries (US and UK). Also Android is giving very strong competition to iPhone’s operating system.

As the level of disposable incomes rise in India, Nokia should be wary of the fact that in its focus to provide cost effectiveness, it should not forget that the demand for high end services in India will also be on the rise. To maintain its stronghold, it should evolve its focus with the ever changing Indian dynamics. The emergence of mobile hand set start ups in India has definitely proved that point.

One Response to “Nokia Reigns Over The Indian Market – But For How Long?”

  1. June 7, 2010 at 2:16 pm #

    I am an avid follower of your blogs and this article certainly does strike a familiar chord. Nokia’s market leadership is under an unprecedented threat with so many new entrants promising great value products at much cheaper prices. One of the various strategies for Nokia would be to enter into the dual-SIM handset market in India which is a growing and rather unexplored territory for the established brands (except Samsung). I have covered this aspect in my blog http://preetamdey.wordpress.com. I look forward to your thoughts & comments…

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