Why Is Nokia Losing Market Share in Europe

1) Why is Nokia losing Market share in Europe, the USA, and Japan? Why has Nokia been so successful in emerging markets?

1.1) Lose of market share

Nokia had lost ground in the developed market: the company sold one in 10 handsets in the U.S (compared to one in three in 2002), and it had recently pulled out of Japan after 20 years of operations. Nokia’s revenues in Europe were declined by 15% in the fourth quarter of 2009. The following reasons can be accounted for its loss of market share:

1) Market share loss was caused by insufficient focus on customer needs, Nokia has struggled to match the evolving needs of U.S. and European consumers, as its mobile phones have often fallen short of customers' customization preferences.

2) Fierce competition in the US is also a prime reason

a. In the http://www.google.com/search?hl=en&source=hp&biw=768&bih=623&q=smart%20phone%20in%202001%20and%20held%2041%%20of%20world%20wide%20smart%20phone%20market%20in%202009,%20they%20had%20difficulty%20competing%20with%20Apple%20and%20RIM,%20who%20were&aq=o&aqi=&aql=&oqspring of 2007, Apple rocked the mobile industry with the introduction of the iPhone, a device that was a first step towards convergence of data, audio, music, and internet in one device.

b. Although Nokia introduced first smart phone in 2001 and held 41% of world wide smart phone market in 2009, they had difficulty competing with Apple and RIM, who were increasing their share of the US market.

c. Between first quarter of 2008 and third quarter of 2009, Apple more than tripled its market share and RIM’s share nearly doubled.

3) New efforts by competitors, such as the introduction of the Motorola Droid in the smart phone segment and new products by Samsung and LG in the basic phone segment also lead to its lose in market share.

Below figures in euro millions

1.2) Success in emerging markets

An increasing percentage of Nokia’s revenue growth from 2000 to 2009 was fuelled by its strong grip on emerging markets and accounted for 60% of revenue, 27% of assets, and 43% of employees.

1) Nokia through its research very well understood the local markets and claimed success in these emerging markets. For example

a) The Nokia model 1616 became a successful example of a technology developed in emerging markets for emerging markets. Although its features would look basic to western consumers, they represented technology adapted to the need of rural markets like a dust resistant keypad, AM/FM radio capability because many homes lacked a separate video, extended life battery, flashlight, email and address book and so on

2)