Nokia and it's downfall

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1. - Mr.B.Prem kumar

2. ESTABLISHMENT OF
NOKIA
•FOUNDER WAS FREDRIK IDESTEM.
•PREVIOUSLY STARTED AS PAPER, RUBBER
AND CABLE INDUSTRY.
•IN YEAR 1967, ELECTRONIC SECTION WAS
FOUNDED.
•IN LATE 1970’S, NOKIA INVOLVED INTO
TELECOMMUNICATION INDUSTRY.

3. THE FIRST DIGITAL
SWITCH USED BY NOKIA

4. ONE OF THEIR PHONES IN
LATE 1970-1980’S.

5. GROWTH
•EARLY INVESTMENT IN GSM TECHNOLOGIES
MADE THE COMPANY THE LARGEST MOBILE
PHONE MANUFACTURERS.
•BETWEEN 1996 TO 2001, NOKIA’S TURNOVER
INCREASED FROM £6.5 BILLION TO £31
BILLION.
•THE GROWTH CONTINUED AT ITS PEAK UNTIL
2011.

6. NOKIA’S BEST SELLING
PHONE WORLDWIDE

7. OPERATING SYSTEM
•SYMBIAN WAS NOKIA’S SMART PHONE
OPERATING SYSTEM UNTIL 2011.
•NOKIA USED LINUX IN SOME INTERNET
TABLETS AND IN THE NOKIA N900.
•BY THE END OF 2011, NOKIA GOT INTO AN
ALLIANCE WITH WINDOWS AND ANDROID.

8. LOSS OF MARKET SHARE
•IN 2007, OFFICIAL LAUNCH OF iPHONE
CONTINUED TO BE OUTSOLD.
•IN 2010, DRASTICALLY THE SHARE OF MARKET
DROPPED WHEN ANDROID AND iOS CONTINUED
TO GAIN THE MARKET SHARE.
•SYMBIANS SHARE IN THE MARKET DRIPPED TO
32% BY 2010.

9. CORPORATE AFFAIRSNokia Leadership Team (as of May 2014)
Rajeev Suri (Chairman), b. 1967
President and CEO since 1 May 2014
Joined Nokia on 1995
Samih Elhage
Executive Vice President and Chief Financial and
Operating Officer of Nokia Networks
Joined Nokia Networks 2012
Michael Halbherr, b. 1964
CEO of HERE
Joined Nokia 2006, Nokia Leadership Team member
since 1 July 2011
Timo Ihamuotila, b. 1966
Executive Vice President and Group Chief Financial
Officer
With Nokia 1993–1996, rejoined 1999, Nokia
Leadership Team member since 2007
Henry Tirri, b. 1956
Executive Vice President and Acting Head of Nokia
Technologies
Joined Nokia 2004, Nokia Leadership Team member
since 22 September 2011

10. ALLIANCE WITH ANDROID
AND WINDOWS
•LAUNCH OF LUMIA CAME INTO EXISTENCE IN
2011.
•SOME PHONES IN NOKIA CAME WITH ANDROID
OPERATING SYSTEM.
•ALLIANCE HELPED IN INCREASE IN SALES.

11. FINANCIAL DIFFICULTIES
•In 2012, Nokia shut down its production and
research sites in Finland, Germany and Canada.
•By the end of 2013, 24,500 employees were laid
off.
•Company’s inability to foresee the rapid changes in
mobile industry were on of their problems.

12. SALE OF BUSINESS TO
MICROSOFT
•ON 2
ND
SEPTEMBER 2013, MICROSOFT
ANNOUNCED A DEAL WORTH €3.79BN, ALONG
WITH ANOTHER €1.65BN TO LICENSE NOKIA'S
PORTFOLIO OF PATENTS FOR 10 YEARS, A DEAL
TOTALLING AROUND €5.4BN. ($.7.1 billion)
•MICROSOFT ACQUIRED ASHA AND LUMIA
BRANDS.
•THE FUTURE LUMIA DEVICES ARE BRANDED
WITH MICROSOFT’S NAME AND LOGO.

13. SOME OF THE MICROSOFT
PHONES
LUMIA 535
LUMIA 830
LUMIA 1520

14. Downfall of
Nokia
A glance look!

15. Why Nokia failed?
•One of the giants in mobile manufacturers
sold itself to Microsoft. Is it a sign of failure
or its inability to maintain a firm. No doubt its
a failure to properly manage.
•So, why do you think Nokia failed?
•Be attentive to know the reasons behind
failure of Nokia's marketing strategy and what
can be learnt from it.

16. How Nokia failed in connecting 'to'
people?
•Apple redefined smart phones with touch screen and
Blackberry with email. Android proved that software matters
more than hardware.
•Nokia was slow to respond to these trends.
•In India, local brands stole the lead on dual SIMs, low-end
Qwerty and long-battery-life phones.
•In a nutshell, that's how Nokia, which enjoyed a 60% market
share in India, ended 7-9% as per IDC Asia Pacific Mobile
Tracker in Q4 2012.

17. Android weakened roots of Nokia?
•In 2008, brands like Samsung, HTC, and Sony
found roots to extend their market.
•Samsung's Android phones are user friendly and
budget friendly too.
•When every manufacturer is busy in making
touchscreen mobiles, Nokia felt that touch
wouldn't have a scope in the near future but
customers overwrote their expectations.
•Nokia's entrance into Windows platform is quite
late
•Finally Nokia gave up for a $.7.1 billion to
Microsoft.

18. Mistakes that lead to Nokia
Failure
1.Failure of Symbian OS:
•Nokia launched its Symbian 60 series in year 2002 which initially
had a good market response.
•The introduction of Apple iOS in 2007 and Android in 2008, the OS
race was completely taken over by the two giants.
•The reasons for collapse of Symbian OS is lack of applications and
UI (User Interface).
•After facing competition from iOS and Android, Nokia continuously
tried to improve their Symbian OS but was not creating something
unique.

19. 2. Wrong Deal with Windows
•Customers were waiting for Android phones from
Nokia. But the company made the biggest
mistake to take a leap of faith in Windows in
2011. At that point of time, the company already
was in declining condition and trusting Windows
which was new in the field to regain its status was
the biggest mistake the company made.
•All these phones which the company launched
were comparable to other competitor devices but
OS was the problem which lead to ultimate
collapse of company.

21. 3. NOKIA Became Laggard in
Smartphone Market
•Stiff competition from Samsung and Apple.
•Lack on focus on innovation was the second
big reason of collapse.
•Nokia seemed to be lagging in the race.
Where Samsung from nowhere entered the
race and focused on innovation as its core
competence to gain the market share, Nokia
was very late to realize this fact.

22. Below is the diagram showing how sales dipped Below is the diagram showing how sales dipped
from Q4 in 2010 to Q4 in 2012.from Q4 in 2010 to Q4 in 2012.

23. 4. Losing Market Share on Both
Ends
•Nokia not only failed to realize competition from
Apple, Samsung, Sony, Blackberry in high end
smart phones, they also failed to notice the stiff
competition in the lower segments of phones.
•The company which used to have epic models
like Nokia 1100 suddenly started losing at lower
ends too.

•Very lately company realized this thing and
launched their Asha series but by that time they
had already lost the game.

24. 5. Failure to Implement the Right
Umbrella Branding Strategy
•Apple was the first phone to use the strategy of umbrella branding
using iPhone as an umbrella brand and then building subsequent
models each year.
•Samsung was quick in identifying this concept and they started
building their high end phones with Galaxy S series.
•Nokia on the other hand used to have used an umbrella brand in the
N series and recently the Lumia series, but they failed to create buzz
among customers which Apple created.
•The company which is missing the constant innovation has the high
probability of getting punished from the customer.

25. SWOT
Strength
Experience
Largest network of selling &
distribution
Strong customer relation
Wide range of products for
all class
Weakness
Low voice quality
Less stylish in low priced
products
Heavy sets
Unlike iPhone Apple, Nokia
N-series is complex, tough and
not user friendly

26. Opportunities
New growth markets
Concentrate on Smartphones
Well designed and styled set
Mini notebooks
Threats
China mobiles – It has made exact
copy of Nokia
Competitors like Samsung & Apple
Sales may decline due to global
economic downturn
Standard & Poor downgraded Nokia
with low grade
SWOT Cont...SWOT Cont...

27. Journey towards failure
Year 2006:
Nokia is on a high. It was enjoying 60% share of
India's mobile market and was the undisputed
lead.
Year 2007:
June 29
•Apple launched iPhone 3s.
•Redefined smart phone and challenged
category leaders like BlackBerry and Nokia.

28. Year 2008
March
Micromax came up with handset business in
India.
September
Samsung launched Omnia. Became dominant in
touch screen phones globally.

29. Year 2009
June
Google’s Android entered Indian market with the
help of HTC Magic and Vodafone at Rs.29,990.

30. Year 2010
June
•Samsung launched Galaxy S in India at
Rs.31,500, its first smart phone.
•Later, Galaxy-3 (Rs.12,300) & Galaxy-5
(Rs.10,200).
•Samsung's smart phone sales surge.

31. August 30
•Nokia launched C1 & C2 phones
•Nokia market share in India for 2010 (Jan-
Sept), according to IDC, crashes to 32.9%

32. Year 2011
February
•Nokia announced Microsoft patnership, but it took 8-9 months
to unveil products.
•Meanwhile, Samsung consolidated position while Micromax,
Karbonn, Lava, Spice and launched cheaper smartphones.

33. March
•iPhone 4. The iPhone changed the industry in more ways than
one: apps, superlative design and accessories.
•But Nokia was still struggling to find traction with Windows.
June
•Nokia launched dual-SIM phones, became no.1 player in this
space, but it was 18 months late. This delay cost Nokia.

34. November
Samsung's Galaxy Note, iPhone 4S launched.
December
•Nokia's Lumia 800 (Rs.29,000)
•Lumia 710 (Rs.19,000) launched.
•Samsung's cheapest Galaxy at Rs.7,830; strengthend position
in the low-end smartphone space.

35. Year 2012
January
Nokia fought back. Launched first Asha, 200 for Rs.4,400. It is
its first QWERTY dual-SIM device. Strong product, but dual-
sim market is past its peak.
June
Full-Touch Asha 305 launched. Nokia claimed it's largest-selling
smartphone; but rivals and some tracking agencies don't
consider Asha a smartphone.

36. September
Nokia Market share is 22.2 % and 19.2% in smartphones.
November
iPhone 5 launched.
December
Samsung's India Galaxy sales count crosses 1 crore.

37. Year 2013Year 2013
Nokia's market share dwindled down to 7-9% as per IDC Asia
Pacific Mobile Tracker in Q4 2012.
March
Lumia 520 (Rs.10,000) launched but Samsung, Micromax
moved ahead.

38. Thank
you
- King Prem
Kumar