Nokia has a niche, it's the developing market

When talking about smartphones and the mobile market there’s always a joke about Nokia’s ability---or rather inability---to penetrate into the high-end segment that Apple dominates. But there's a potentially bigger market at stake in developing countries.

At Mobile World Congress 2010, Nokia executives clearly indicated how they plan to expand their market share in developing countries like India and in Africa. It seemed like Nokia isn’t really interested in the market that Apple, Microsoft and the other me-toos are targeting.

With not-so-fancy handsets, specific features and services like Nokia OVI Life, the focus is on the lower end of the economic strata. In a recent survey, Nokia was awarded India’s most trusted brand for the third straight year, which speaks a lot for a company in the country for 15 years. While the focus is on shiny new toys, everyone seems to be forgetting the market where phone manufacturers are gaining first time customers sans a lot of competition. For Samsung to sell the Galaxy S it has to invest a lot more resources compared to selling the Samsung Guru series; simply because they both target different ends of the market segment and the competition.

The mobile market in India is growing exponentially: An estimated 108 million handsets were sold in ‘09-‘10. Unfortunately for Nokia, the recent handset market share numbers for India show that they are losing customers to the local brands like MicroMax. Having said that, the lead Nokia has is massive and India is still Nokia’s backyard. For a brief period it seemed like Nokia wasn’t sure what market they wanted to target, working on several platforms – Symbian, MeeGo, Maemo and others. With a drop from Rs 16,567 crore to Rs 14,100 crore in revenues, Nokia needs to focus on their niche, profit margins might be less but customer base is massive.