Is Nokia losing its ground in India? Or for that matter globally? From the past year’s data it is evident that although Nokia still is a majority seller in the mobile phone segment in India with over 50% market share but this number is plummeting fast. If you look at the figures, this number has been falling constantly over a few years now. This market is being captured by other players like Samsung and LG and local players like Micromax. From zero market share last year this year Micromax’s market share was around 4%. Whats more striking is that the combined share of the indigenous players has increased from around zero percent to  17%.

Is Nokia doing something in this regard? Nokia has had a very strong hold in the Indian market. With over 2 lakh retail outlets it has been catering to the Indian consumer’s need since a long time now. It may be worth noting here that out of these 2 lakh retail outlets, approximately 45% cater to the rural market. It has launched mobile phones in every segment starting from around a thousand rupees to going over 30000 rupees. Its E series phones have been accepted well in the market. Its lower range phones still champion the markets. However it has somehow missed the smartphone league.

Micromax is a new brand. It has been giving a hard time to its competitors. Not only the prices of its cell phones are way cheaper than of its competitors’s but also it has used the right promotion strategy to build its brand’s awareness. Micromax’s Qwerty keyboard phones are available at almost half the price of a Nokia phone having similar features. Apart from this they also provide the same warranty as a Nokia phone does. The warranty factor gives Micromax an edge over its Chinese counterparts as they are without any warranty. Another factor on which they have an advantage is that they provide dual sim phones, a feature Nokia has missed altogether.  Anyway, combining all these factors it is clear that Nokia is going to have a tough time as Micromax’s presence in the market increases.  Micromax is giving a direct challenge it to its medium and higher end phones.

On the lower end side, Nokia is and will remain the market leader for a long time. With such a strong penetration in the market, its hard to even think of challenging Nokia. It would be difficult for Micromax or any other company to challenge Nokia in this segment in terms of price and quality. This is because Nokia is already pricing its lower end products at such a low price that it may not be easy for any company to go further down than this. And beating an already established player in terms of quality is not easy. But the point is that will Nokia be happy catering to this market and being a market leader of this market? By happy I obviously mean in terms of profitability.

Lets wait and watch how Nokia reacts to this change, or if it even does or not.

Mirk

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