The South Korean player enjoys a clear lead over its Finnish rival in the smartphone sweepstakes currently but there are quite a few curveballs to come in the hyperactive mobile phone market before a clear winner can emerge.
Issue Date - 30/09/2012
Though Nokia is still the overall leader in the Indian mobile phone market and has a formidable presence with close to 200,000 service outlets, Samsung has ensured that the brand enjoys strong visibility albeit with lesser number of outlets. With 100,000 distribution centres that cover most parts of the country, Samsung is focused on better control on service quality and maintaining a ‘premium brand’ edge over Nokia. So even in smaller cities it runs better designed and illuminated outlets. This ensures that the Samsung brand isn’t just a metro phenomenon like an HTC, BlackBerry or Sony Ericsson. To cement its long-term trust and relationship with consumers, the company has invested heavily in setting up a strong after-sales service network with trained professionals and responsive call centres, which ensure customers have a good experience.
These measures have helped Samsung gain strong ‘word of mouth’ publicity and get repeat buys from older customers, who feel the brand cares for them. It has also ensured that Samsung, which started in India as a consumer electronics players at a distant No.2 to LG, has not only emerged as a strong and credible challenger to global tech giants like Apple and Nokia but also become capable enough to beat them at their own game. The success of its handset business has ensured that almost 55% of its India revenues of over Rs.200 billion comes from the mobile phone division.
In contrast to Samsung’s steady march in India, Nokia’s biggest problem has been its lack of a strong smartphone range in its portfolio. To make amends for its shortcoming, Nokia has, over the past year, started moving (rather late though) aggressively by teaming up with Microsoft to offer Windows OS-based ‘Lumia’ range of smartphones. It has announced slowly phasing out its Symbian phones and would focus on pushing its Lumia and Asha-series range of smartphones in the country. The response so far has been encouraging but not enthusiastic enough. On the other hand Samsung, though still on a strong wicket, has come up against legal troubles that have the potential to upset its smartphone business. The past month has been a particularly bad one for the company, which has been asked by a US district court to pay $1.05 billion as damages to Apple in a patent infringement and copyright related lawsuit.
The court held that many of Samsung’s Google Android-based phones infringed Apple’s patents. The indictment comes as a dampner as it can dent Samsung’s image as an innovator company. To ensure that its brand image remains intact, Samsung will have to focus on creating a strong future product line-up as well as ensure that it doesn’t get caught in more such high-profile legal contretemps. Says Amandeep Kalsi, Director, Protiviti India, “The market is fast evolving in the digital communication devices space and no player can afford to be content about its products and their positioning. Market positions are up for grabs every couple of years and so be it Apple, Samsung, BlackBerry or Nokia, none can afford to take it easy.”
While it’s true that nobody can predict how the tech scene will unfold in the future, a wrong move by Samsung at this stage or a right strategic push by Nokia now can yet again reconfigure their stakes in a rapidly changing market. Though there’s no strong alternative for Samsung at the moment, multiple scenarios have begun to emerge, especially in the aftermath of the US court verdict against Samsung. More and more smartphone makers may turn increasingly to Windows devices because of the legal uncertainty surrounding Android phones. Right now, Nokia is the primary manufacturer designing for Windows phone. But Samsung may actively now weigh in big time in favour of Windows. It has already surprised the market by unveiling a new Windows phone, called ATIV S. The move seems like pre-emptive action on the part of Samsung and designed to steal a march over Nokia whose own Lumia line of smartphones using Windows Phone 8 is slated for release in New York on September 5. Nokia expects its services bundled with the Lumia, such as Nokia City Lens, Transport, for public transport information, and Nokia Music with Mix Radio, a free mobile music streaming and offline listening apps, to be a big hit with consumers.
So even though Samsung enjoys the whip hand in the smartphone market currently, the future is not without upside possibilities for Nokia. The brand continues to retain a huge fund of goodwill and trust among Indian consumers and enjoys an enviable reputation. Millions of Indians who continue to use Nokia feature phones could be potential customers for its superior smartphones. But in a hyperactive market that demands constant innovation, the player that is more innovative and can play the pied piper to the consumer will win the game. With the smartphone market set to grow to 30% by 2015 from 11% currently, the fight for the smartphone market pie is still largely open and the player whose offerings best meet the market pulse and satisfy customer expectations will get to hit the home run.
Onkar Pandey
(My Story from From Business & Economy)
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