Saturday, December 3, 2011

Rotten Core: Nokia lose huge market share in their homeland

There's a state of unease within Nokia at the moment and unsurprisingly so. With the first Nokia-Microsoft lovechild now out in the market (the Lumia 800, you might have heard of it) and an aggressive marketing strategy in place to drum up interest in Windows Phone-laden Nokia's coming fresh out of the factory, the Finnish company have been waiting with bated breath to see how consumers will receive this new-era Nokia.
They've shown a resilience to the tough times they've faced already and since the partnership announcement in February, many wondered just how this shift would affect the company's image. By bringing Microsoft in, they've inherently changed the way they operate and the way fans of the brand expect them to operate. Sure they brought the Asha lineup to maintain support for their Symbian products and the N9 is taking point in markets where the Lumia 800 isn't, but now Windows Phone is Nokia and as Stephen Elop so boldly said at Nokia World, the Lumia 800 is "the first real Windows Phone device."
Not only could a statement like that upset the likes of HTC, LG and Samsung, all of whom license Windows Phone from Microsoft, but the hardcore fans of what we could call the 'old' Nokia also might not welcome the change, and that is a notion that has the potential to hold water in this case.
The Finns have been proud of the globally recognized giant that is Nokia and it's probably one of the key things those from outside of the country associate with it, but a recent report from Helsinki's Taloussanomat shows that pride only takes support so far. In the last 12 months, Nokia have lost 45% of the market share taking their dominance from 76% right down to 31%.
Of course they still have the top spot, but the gap has dramatically narrowed, with the majority of their sales now in the possession of Samsung who have risen sharply from a mere 3% to 25% in the same amount of time. Apple then take third place with 16% in Q3 2011, with Sony Ericsson and Huawei sharing 11% each, leaving the remaining 6% of the market currently to ZTE.
This doesn't automatically spell the end for Nokia of course, far from it, but it still must be unnerving for them. The financial quarter in question actually precedes the announcement of the Lumia and Asha handsets, but as such, it does indicate that the change was necessary. It makes more sense for Nokia to have changed tack altogether, than continue along the road they were currently on and let's not forget the Finnish market is important for Nokia, but relatively speaking, it's a small one, with Finland's entire population around the 5 million mark.
Once the holiday season and the final financial quarter conclude we should get at least an initial indication of the impact the Lumia 800 is making. Until then however it's a case of crossing fingers and seeing if Nokia are able to reassure the old fans, as well as attracting new ones.