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Some Comments on Nokia U.S. Market Share Numbers

OPKThere was an article in the New York Times today about my employer’s desire to increase their market share numbers here in the United States. Olli-Pekka Kallasvuo, pictured left, or OPK as we refer to him internally, was interviewed for this piece and is quoted a number of times.

This news did not go unnoticed by the blogosphere, which weighed in as expected. Heck, there was even a thread on Jaiku about it. Generally, people want to see Nokia have better numbers. I don’t disagree with that and I think Nokia’s on the right track to improve the U.S. market share numbers. Here’s my take on this, which may not the same take as the official corporate line.

Yes, in 2002, Nokia had great market share in the U.S.–28%. Those numbers declined over the years until they got into the single digits. I can trace it to one specific behavior: something I like to call “being stubborn.”

“Being stubborn” can be partially summed up by OPK himself: “We felt we could teach the U.S. market how we do business elsewhere.” In other words, play by our rules, or we won’t play. As OPK points out, “frankly, that failed.”

“Being stubborn” as a policy of working with the U.S. carriers obviously failed. But “being stubborn” also extends to CDMA, which unfortunately is more than half the U.S. mobile market. Because Nokia wanted to build it’s own chips and not rely on Qualcomm’s chips, CDMA development was expensive. What phones Nokia did make for CDMA carriers were low-end phones at best. No high-speed, EVDO connectivity.

Nokia tried to beef up their CDMA business by spinning it out to a joint partnership with Sanyo. This ultimately did not happen, further setting back any progress on the CDMA front.

With few devices in the GSM carriers (AT&T, T-Mobile) and almost NO devices on the CDMA carriers (Verizon, Sprint), it’s no wonder Nokia’s market share dipped into the single digits.

However, things are turning around. The 10% market share Nokia has in the US right now is *without *a significant presence in CDMA carriers. This will change as Nokia has subcontracted with an undisclosed Asian manufacturer to make CDMA handsets for the U.S. market. Also, Nokia is working much closer with all four major US carriers to make handsets more to their specifications.

Maenwhile, Nokia has beefed up it’s distribution network to sell unlocked, non carrier specific handsets through a variety of resellers as well as the Nokia Flagship stores in Chicago and New York. Interest in these handsets as picked up. The Nokia N95 sold quite well in the months leading up to the sale of the Apple iPhone, which changed the possible handset manufacturer/network operator relationship. There have also been a number of lawsuits that have made the news which has raised people’s awareness about “locked” versus “unlocked” handsets.

Based on what little I’ve heard surrounding our plans in the U.S. market, I feel very confident that Nokia’s U.S. market share numbers will be higher at the end of 2008 than they are at the end of 2007. Where will they be? 155? 20%? Higher? What do you think?

#Cybersecurity Evangelist, Podcaster, #noagenda Producer, Frequenter of shiny metal tubes, Expressor of personal opinions, and of course, a coffee achiever.