Nokia, which recently announced more job cuts, still holds its dominant position in SA.
This is according to Annette Zimmermann, an analyst at Gartner, who says that although Nokia holds a more than 40% share of the handset market, it comes in second to Research In Motion (RIM) in terms of the smartphone market.
She says Nokia's dominance is largely due to its local content. “The other platforms, like Android, iOS and RIM, mostly lack localised apps and content, and this will become more and more important as a selling point for users,” says Zimmermann.
However, Steven Ambrose, MD of Strategy Worx, says while Nokia is still the biggest local player, sales of its devices are declining. He says this is because the company lacks a new strategy in the smartphone market, and the iPhone and Android have given it stiff competition. Yet, Ambrose adds that he believes Nokia is well aware of this situation, and has a clear high- and low-end strategy to remedy the decline.
Both Zimmerman and Ambrose suggest that Nokia needs to remain relevant to the local market in order to succeed. Ambrose says the company needs a low-cost smart replacement for the aging feature phones based on Symbian.
“The actual operating system is of low relevance in this market, but the functionality and usability is key, along with the price,” argues Ambrose, who says Nokia needs to meet these three goals. He adds that the Nokia N9, based on Meego, “shows some serious innovation and indicates a way forward for Nokia in the smartphone market”. Nokia says the phone will arrive in SA in November.
“Nokia should continue to pursue initiatives such as the 'Create for Millions', where users are asked to submit ideas for applications for the S40 platform,” adds Zimmerman. She says initiatives such as these are a good source of user-generated ideas, and give insight into what users want and need on their phones.
Zimmermann also argues that Nokia is in a transitional phase, with new Windows-based smartphones coming out at the end of the year. Zimmermann says these will sell in 2012, and by the end of next year, Nokia will be in a position to turn its market share around by offering a good smartphone user experience at an attractive price point.
Confined job cuts
He notes, however, that the job cuts also signal the company's struggle to realise this strategy. He says that while Nokia has invested in Microsoft, its partner has not reciprocated. For example, Cartier notes, Microsoft made no mention of Nokia when it announced its launch partners for the Mango release of Windows Phone 7.
Cartier adds that even at the best of times, Nokia has struggled in the US market. He says if Nokia fails on its promise to bring Windows Phone devices to market in time for the holiday season, there may be more job cuts in store for the company.
Leo McKay, SA communications manager at Nokia, says the job cuts will have only a limited effect on Africa. He insists there is still significant opportunity for Nokia in Africa, and adds that Nokia experienced 6% year-on-year growth in the Middle East and Africa region during the second quarter of the current financial year.
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