Contents: 1. Introduction..................................................................... 2 2. Mobile market in India.....................................................4 2.1 Smart phones in India 2.2 Why India matters in smart phones range 3. History of Nokia............................................................... 8 4. Beginning of the Mobile era............................................11 4.1 Vision and strategy of Nokia 5. Nokia India story..............................................................14 5.1 Nokia product line in India 5.2 Local brands competing with Nokia in India 5.3 Micromax and Karbonn 6. Competitive analysis of Nokia.............................................24 6.1 SWOT analysis 6.2 Five force porters model analysis 7. Introduction to marketing....................................................30 7.1 what is marketing? 7.2 Market segmentation 7.3 The segmentation process 7.4 Market segmentation for Nokia 8. Market Survey for Nokia.........................................................38
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1. Introduction Introduction to Project: This Project deals with the Marketing strategy of Nokia in India. Nokia is a world leader in mobile communications, driving the growth and sustainability of the broader mobility industry. Nokia connects people to each other and the information that matters to them with easy-to-use and innovative products like mobile phones, devices and solutions for imaging, games, media and businesses. Nokia provides equipment, solutions and services for network operators and corporations. Marketing is one of the most important functions in business. It is the discipline required to understand customers' needs and the benefits they seek. Academics do not have one commonly agreed upon definition. Even after a better part of a century the debate continues. In a nutshell it consists of the social and managerial processes by which products (goods or services) and value are exchanged in order to fulfil the needs and wants of individuals or groups. Market segmentation is the process of identifying key groups or segments within the general market that share specific characteristics and consumer habits. Once the market is broken into segments, companies can develop advertising programs for each segment, focus advertising on one or two segments or niches, or develop new products to appeal to one or more of the segments. Companies often favour this method of marketing to the one-sizefits-all, mass marketing approach, because it allows them to target specific groups that might not be reached by mass marketing programs. The market can be divided into segments by using four "segmentation basis": Psychographic, behaviourist, geographic, and demographic basis. The basic criteria for segmenting a market is are customer needs. To The basic criteria for segmenting a market is are customer needs. To find the needs of the customers in the market it is important to undergo a find the needs of the customers in the market it is important to undergo a market research. Psychographic and behaviorist bases are used to determine preferences and demand for a product and advertising content, while 2
geographic and demographic criteria are used to determine product design and regional focus. Objective of the Study: The objectives of the present study are:1) To know about Nokia Company. 2) To know about the strengths, weaknesses, opportunities and threats of Nokia. 3) To know about marketing. 4) To know about market segmentation. 5) To know the market segmentation used by Nokia.
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2. Mobile Market in India: •
India is one of the fastest growing markets for the mobile industry.
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Indian telecom industry underwent a high pace of market liberalisation and growth since 1990s and now has become the world's most competitive and one of the fastest growing telecom markets.
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The Industry has grown over twenty times in just ten years, from under 37 million subscribers in the year 2001 to over 846 million subscribers in the year 2011.
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India has the world's second-largest mobile phone user base with over 929.37 million users as of May 2012.
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Major players of mobile sector in India
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Samsung
Nokia
Apple
Micromax
Blackberry
Sony
Urban Objective :
Communication
Banking
Entertainment
Internet
Business transactions
Application market
Rural Objective: 4
Communication
A large market yet to be conquered
Social impact through government agencies
1.1Smart phones in India: • •
Samsung is the no.1 smart phone seller in India, followed by Nokia, Blackberry, Apple and others. Urban India has the highest no of users for smart phones; youth is the biggest consumer of smart phone market in India.
http://www.tech-thoughts.net/ •
The latest report by International Data Corporation’s (IDC)(Aug 30,2013) on the Indian mobile phone market for the second quarter indicates Samsung’s market share fell to 26 percent while home-grown manufacturer Micromax continues to strengthen its number two position with a 22 percent market share.
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Overall in India vendors shipped 9.3 million smartphones for Q2 of 2013 compared to 3.5 million units in the same period of 2012. The report also says that in the Indian market ‘phablets’ are the rage and smartphones with 5-inch and bigger screens grew 17 times when compared year-over-year. 5
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Samsung currently has a market share of 26 percent, which is a fall given that Samsung had a 32.7 percent market, share in Q1 of 2013. The report also notes that Samsung’s cash-back and zero percent EMI worked in its favour, specifically for the Galaxy Note II.
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Micromax remains steady at No 2 spot and crossed the 2 million unit mark in shipments. Phablets and the Canvas Series helped boost Micromax’s numbers. It now has a 22 percent market share which is much closer to Samsung.
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Karbonn is the second Indian-manufacturer which is on the top five list with a 13 percent market share. In Q1 of 2013, Karbonn had a 10.9 percent market share. The report notes that the newly launched Titanium range is doing well in the price-sensitive market.
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Nokia is at number four on the list with a 5 percent market share. Lumia 520 helped Nokia pick up volumes towards the lower end, notes the report. Lumia seems to be emerging as a new option for Indian consumers to choose from if they wish to avoid Android or Apple.
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Sony is at number five with a 5 percent market share. The report notes that Sony’s mid-tier range of phones is doing well. This includes Sony Xperia M (under Rs 15 k), Sony Xperia SP (under Rs 25 k) and Sony Xperia E (under Rs 10k) Sony needs to add more phones to its portfolio, across a wider price-range, if it hopes to beat Nokia.
1.2 Why India matters in Smart phone range: •
By 2017, India will replace the US to become the second largest smart phone market after India.
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The potential for smart phone growth in India is huge as its share of overall mobile phone shipments in India in 2013 Q2 was lowest in Asia pacific excluding Japan.
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Vendors shipped 9.3 million smartphones in Q2 of 2013 compared to 3.5 million units in the same period of 2012. 6
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The 5.0-6.99 inch screen size smartphones or phablets , grew 17times.The phablets share has risen steadily to 30% of the smart phone market Q2 in 2013.
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3. History of Nokia •
In 1865, mining engineer Fredrik Idestam sets up his first wood pulp mill at the Tammerkoski Rapids in south-western Finland. A few years later he opens a second mill on the banks of the Nokianvirta River, which inspires him to name his company Nokia Ab in 1871. In 1871, Idestam, with the help of his close friend statesman Leo Mechelin, renamed and transformed his firm into a share company, thereby founding the Nokia Company, the name it is still known by today.
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Toward the end of the 19th century, Mechelin's wishes to expand into the electricity business were at first thwarted by Idestam's opposition. However, Idestam's retirement from the management of the company in 1896 allowed Mechelin to become the company's chairman (from 1898 until 1914) and sell most shareholders on his plans, thus realizing his vision. In 1902, Nokia added electricity generation to its business activities.
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In 1898, Eduard Polón founded Finnish Rubber Works, manufacturer of galoshes and other rubber products, which later became Nokia's rubber business. At the beginning of the 20th century, Finnish Rubber Works established its factories near the town of Nokia and they began using Nokia as its product brand.
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In 1912, Arvid Wickström founded Finnish Cable Works, producer of telephone, telegraph and electrical cables and the foundation of Nokia's cable and electronics businesses. At the end of the 1910s, shortly after World War I, the Nokia Company was nearing bankruptcy. To ensure the continuation of electricity supply from Nokia's generators, Finnish Rubber Works acquired the business of the insolvent company. In 1922, Finnish Rubber Works acquired Finnish Cable Works.
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In 1937, Verner Weckman, a sport wrestler and Finland's first Olympic Gold medallist, became president of Finnish Cable Works, after 16 8
years as its technical director. After World War II, Finnish Cable Works supplied cables to the Soviet Union as part of Finland's war reparations. This gave the company a good foothold for later trade. •
By the 1960s, Finnish Cable Works – already working closely with Nokia Ab and Finnish Rubber Works – starts branching out into electronics. In 1962, it makes its first electronic device in-house: a pulse analyser for use in nuclear power plants. In 1963, it starts developing radio telephones for the army and emergency services – Nokia’s first foray into telecommunications.
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The three companies, which had been jointly owned since 1922, were merged to form a new industrial conglomerate, Nokia Corporation in 1967 and paved the way for Nokia's future as a global corporation. The new company was involved in many industries.
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Björn Westerlund became the first Nokia Corporation President and as the president of the Finnish Cable Works, he had been responsible for setting up the company's first electronics department in 1960, sowing the seeds of Nokia's future in telecommunications.
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Nokia Company Logo:
Founders of Nokia and first President of Nokia Corporation:
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4. Beginning of the Mobile era •
Nokia sets the ball rolling in 1979, creating radio telephone company Mobira Oy as a joint venture with leading Finnish TV maker Salora. 1981 then sees the launch of the Nordic Mobile Telephone (NMT) service, the world’s first international cellular network and the first to allow international roaming.
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The NMT standard catches on fast and the mobile phone industry begins to expand rapidly. In 1982, Nokia introduces the first car phone – the Mobira Senator – to the network. That same year, the Nokia DX200, the company’s first digital telephone switch, goes into operation.
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In 1984, Nokia launches the Mobira Talkman portable car phone. Resembling a military field telephone, it’s a fairly cumbersome piece of kit – but it’s a start.
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Then in 1987, Nokia introduces the Mobira Cityman, the first handheld mobile phone for NMT networks. Despite weighing in at 800 grams and a price tag of 24,000 Finnish Marks (around EUR 4,560), it goes on to become a classic. The Cityman even earns a nickname, the “Gorba”, after Soviet leader Mikhail Gorbachev is pictured using one to make a call from Helsinki to his communications minister in Moscow. Over the next decade, millions of consumers worldwide enjoy their very own Gorbachev moment as the mobile revolution takes hold.
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In 1987, GSM (Global System for Mobile communications) is adopted as the European standard for digital mobile technology. With its highquality voice calls, international roaming and support for text messages, GSM ignites a global mobile revolution. As a key player in developing this new technology, Nokia is able to take full advantage.
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On July 1, 1991, Finnish Prime Minister Harri Holkeri makes the world’s first GSM call, using Nokia equipment. And in 1992, Nokia launches its first digital handheld GSM phone, the Nokia 1011.
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In 1994, Nokia launches the 2100 series, the first phones to feature the Nokia Tune ringtone. Based on Gran Vals, a classical guitar piece composed by Francisco Tarrega in the 19th century, it is probably one of the most frequently played pieces of music in the world. The Nokia 2100 series goes on to sell 20 million phones worldwide. Nokia’s target had been 400,000. 1994 also sees the world’s first satellite call, made using a Nokia GSM handset.
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By 1998, Nokia is the world leader in mobile phones. The strategic decision to focus on telecommunications, plus early investment in GSM, has paid off. Between 1996 and 2001, Nokia’s turnover increases almost fivefold from EUR 6.5 billion to EUR 31 billion.
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In 1999, Nokia launches the Nokia 7110, a phone capable of rudimentary web-based functions, including email. Then in November 2001 Nokia launches its first phone with a built-in camera, the Nokia 7650, and in September 2002 its first video capture phone, the Nokia 3650.
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Nokia launches its first 3G phone (third generation), the Nokia 6650, in 2002 that things really take off. With 3G technology, phones can now be used to browse the web, download music, watch TV on the move, and more.
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In 2005, Nokia sells its billionth phone – a Nokia 1100 – in Nigeria, and global mobile phone subscriptions pass 2 billion. Two years later, Nokia is recognised as the 5th most valued brand in the world.
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By 2010, having dominated the mobile world for over a decade, Nokia no longer has things all its own way. In the all-important smart phone market, competitors such as the iPhone and Android-based devices now pose a serious challenge.
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In February 2011, Nokia announces it is joining forces with Microsoft to strengthen its position in the smart phone market. The strategic partnership sees Nokia smart phones adopting the new Windows Phone 7, operating system, with the Symbian platform gradually being
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sidelined. The goal is to establish a third ecosystem to rival iOS and Android. •
Nokia launches its first Nokia with Windows Phones, the Nokia Lumia 800 and the Nokia Lumia 710, in October 2011. Fast-forward to 2013 and Nokia has a full portfolio of great Windows Phone 8 smart phones, from the Lumia 520 through the flagship Lumia 920.
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4.1Vision and strategy of Nokia: Our vision and strategy •
Nokia’s mission is simple: Connecting People. Our goal is to build great mobile products that enable billions of people worldwide to enjoy more of what life has to offer. Our challenge is to achieve this in an increasingly dynamic and competitive environment.
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Ideas. Energy. Excitement. Opportunities. In today's mobile world, it feels like anything is possible - and that's what inspires us to get out of bed every day.
Our Approach:
• Consumer understanding drives us. • We observe first, then design. We act on our consumer insights. • We take a very human approach to technology: 1. Simple 2. Reliable 3. Intuitive 4. Experiences to fall in love with. • Internet is our quest. Internet innovation, creativity, media and services will be available anytime, anywhere. •Nokia wants to bring the best of internet to mobile Our Resolution - Grow, Transform, Build • Grow the number of people using nokia devices. •Transform the devices people use. • Build new businesses • Our business and people’s expectations for mobile devices and services are changing. Nokia’s promise is to help people feel close to what matters to them.
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5. Nokia India Story Nokia’s Entry in India: Nokia entered India in 1995. • Third Largest Telecommunication Market: India ranks third globally after China and U.S. in terms of the largest telecommunication market. • 500 million mobile subscribers in India: The Indian market is adding about 10 million users a month. Nokia sees the Indian market as a growth opportunity particularly in the country’s rural areas. Rural penetration in India is still very low at 13%. By 2010, Nokia estimates that there will be around 500 million mobile phone users in India as compared to 427 million. According to Standard Chartered Bank’s annual forecast, India will have signed up its 500 millionth mobile subscriber sometime in December 2009 or January 2010. So, it took India 12 years (from 1997 when the mobile revolution began) to grow from zero to 500 million subscribers. However, analysts estimate it will take only five years to add the next 500 million. • Nokia’s market share in India: Nokia has more than half the share of India’s mobile handset market. In 2009, an IDC report indicated that there were about 28 new handset vendors in India. Nokia led with a 54.1% market share in the fragmented Indian market, while the new vendors accounted for 17.5%. Samsung and LG followed with markets shares of 7.7 % and 5.4 %respectively. • Update (Mar, 2012) – Nokia had a market share of approx. 38% in 2011 compared to 49.3 per cent in 2010 in India. Its revenues were Rs 12,929 crore in 2010-11 and Rs 12,900 in the 2009-10. The Indian market accounts for 12 per cent of worldwide sales for Nokia. •
Nokia’s manufacturing facilities in India: Nokia’s manufacturing facility in Chennai, Tamil Nadu (South India) exports half its production to more than 59 countries. Nokia has invested $250 million since its launch in 2006. • Mobile Microfinance – In 2009, Nokia piloted a scheme in two Indian states where it sold handsets on a weekly instalment of 100 rupees ($2) over 25 weeks. Nokia planned to rollout the microfinance offer in 12 Indian states. • India not a low-end market segment – 81 percent of the India’s mobile users are in urban areas. Nokia anticipates such customers would drive demand for high-end phones. • Increasing Competition from new mobile handset manufacturers’ entry into India: In one quarter of 2009 alone, twenty-seven new mobile handset manufacturers entered the Indian market to introduce entry•
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level models (and other models with features such as dual SIM cards and full QWERTY keyboard) for the price sensitive Indian consumer. • Mobile handset sales in India: By year ended June 30, 2009, mobile handset sales in India was 100.9 million compared to 94.6 million, a year ago. • Nokia’s strong distribution in India: In India, Nokia has 2 lakh retail outlets and 700 support centres across 400 cities and towns. • Nokia’s competitors in India: Motorola, Sony Ericsson, Spice, Micro Maxx, Karbon, Lava, Lemon, Oscar. • Nokia’s ‘Made for India’ phones: In 2000, Nokia introduced the Nokia 3210 with a Hindi menu. In 2003, Nokia launched the Nokia 1100, a first Made for India phone. • India’s Most Trusted Brand: Nokia ranked as India’s topmost trusted brand in the Economic Times-Brand Equity’s annual ‘Most Trusted Brands’ survey for 2010. In 2004, Nokia ranked 71 and moved to 44 in 2006 as India’s most trusted brand. In 2007, it ranked in the top ten at number 4. Nokia has since held the number one slot for three years consecutively. • Nokia’s biggest advertising/marketing campaign in India: In December 2011, Nokia launched its biggest ever campaign in India called the ‘The Amazing Everyday’. The idea behind Nokia’s global campaign is to engage customers with the idea that “hidden away in the everyday landscape are billions of little adventures”. • In February 2011, Nokia entered into an alliance with Microsoft. Nokia began using the Windows operating system on its smart phone range called Lumia. In June 2012, Nokia announced that it plans to cut 10,000 jobs and close 2 research facilities in Germany and Canada and a factory in Finland after its sales decreased by 29 percent with losses at $1.2 billion in the first quarter. However, India operations are unlikely to be affected by the job cuts, a spokeswoman from Nokia India confirmed. •
Samsung is the biggest competitor of Nokia in India, followed by Sony, HTC, Apple and local brands such as Micromax, lava and Karbon. •
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According to NextBigWhat.com, Samsung Electronics has surpassed Nokia in overall mobile phone shipments in India during the first quarter of this calendar year, international technology research firm IDC has said. According to Gartner, and Samsung had become the number one player globally in March this year. •
While Nokia shipped just 15% of total phone shipments in the quarter in India, Samsung marched ahead and had a market share of 16% during the period.
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Local companies Micromax, Karbonn and Lava rounded up the top five.
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The main contributor to Samsung’s success was smartphones, and Nokia still leads in feature phones with 16% compared to Samsung’s 14% share. In the smartphones category, Micromax had the maximum share of market (18.8%) after Samsung (32.7 %). Karbonn was at number three at 10.9%, followed by Nokia and Sony at 5.9% each. Nokia’s share is mainly due to the Lumia brand which is slowly gaining popularity.
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Nokia’s Lumia brand has almost 6% of the smartphones market share, while Samsung continued to lead with a 33% share. The total mobile handset market stood at around 6.1 crore units for the first quarter against the total shipment of 5.9 crore units for the last quarter of 2012.The size of the feature phone market was 5.46 crore units in Q1 of 2013 as against 5.32 crore units in Q4 of 2012. Around 61 lakh smartphones units were shipped in Q1 of 2013 as against 53 lakh units for the last quarter of 2012. This showed a 14% quarter-on-quarter growth. Android continued to be the number one operating system with a 90% market share among smartphones OSes.
5.1Nokia product line in India: Nokia product line in India consists of: • QWERTY phones • Dual SIM phones • Nokia Asha series • Lumia series • Accessories
Nokia Asha series:
The Asha series is a range of feature phones produced by Nokia, ranging from low to mid-end phones. The word "Asha" is adopted from a Sanskrit word meaning "Hope". With the acquisition of Nokia's mobile phone business by Microsoft, expected to close in early 2014, Microsoft will gain rights to the Asha brand, and plans to use it as an "on-ramp" to the Windows Phone platform. There are currently 16 mobile phones in the Asha range. All devices except the Asha 501 run the Series 40, or simply S40, operating system. The Asha 501, released in May 2013, runs the Nokia Asha platform, which builds on S40 and Smarter phone. None of Asha models have GPS functionality.
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Nokia Asha series Model
Lumia series: The Lumia series is a line of smartphones first designed and marketed by Nokia. Introduced in November 2011, the line was the result of a longterm partnership between Nokia and Microsoft—as such, all Lumia devices run the Windows Phone operating system, aiming to compete against the iPhone and Android-based devices. The Lumia name is derived from the partitive plural form of the word 'lumi', which means 'snow' in the Finnish language. On 3 September 2013, Microsoft announced its intent to acquire Nokia's mobile device business, expected to close in early 2014. As part of the deal, Microsoft will acquire rights to the Lumia and Asha brands from Nokia, but will be unable to use the Nokia brand on future devices following the acquisition.
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Nokia Lumia Models Nokia Dual SIM models: Dual SIM phones help you save money by combining two different plans or service providers. Using it is a snap: just keep one SIM inside the phone and pop a second one into the slot on the side. Your phone remembers messaging and other settings for up to five SIMs, depending on the device. In a way these phones are an attempt by Nokia to undo its mistake of not taking dual SIM phones seriously enough. Nokia is trying to beat the Indian players in their own game of producing dirt-cheap dual SIM phones. Some of the models of Nokia Dual SIM are Nokia 110, Nokia 114, Nokia C 2, Nokia X1-01, Nokia 101 , Nokia C2-06 , Nokia Asha 202 , Nokia Asha 205 , Nokia Asha 206.
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5.2Local brands competing with Nokia in India: Nokia’s (NOK) fall has been particularly brutal in Asia. The mobile-phone maker that Microsoft (MSFT) bought for $7.17 billion once ruled China and India, but the Finnish company has suffered dizzying declines. Nokia no longer even ranks among China’s top 10 smart phone brands, In India, things are bad but not quite so grim. Nokia lost further share in the second quarter of this year, falling to just 5 percent of the smartphone market, from 5.9 percent in the previous quarter. That puts the company well behind Samsung and local brand Micromax, both with more than 20 percent. At least Nokia managed to hold on to its No. 4 ranking, enjoying some success with its Lumia handsets. Figures bear this out. While Nokia had a commanding 46% share in the smart phone segment in second quarter of 2011 in India, that slice has shrunk to a paltry 5% two years later. During the same period, Micromax jumped from just 1% to 22%. Even Karbonn, another Indian handset brand with a 13% 22
market share in the smart phone segment, has raced ahead of the Finnish handset maker.
The solace for Nokia has been the performance in the feature phone segment, which still makes up an overwhelming portion of the handset market in India. These low-cost phones account for almost 85% of the overall mobile phone market, according to IDC India. But here too, while Micromax and other local players have either maintained or increased their share, Nokia has been seeing a steady decline - from 23% in the second quarter of 2011 to 15% two years later. Nokia is still the leader in feature phones, but that may not matter as the action shifts towards smartphones.
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5.3 Micromax and Karbonn Micromax and Karbon mobiles are the biggest local brands of the Indian market and competition for Nokia. They offer products with lower cost than Nokia , which is leading to Nokia loosing the customers. Nokia used to have a monopoly in the low segment phones market before arrival of Karbonn and Micromax.
Micromax: Micromax, is the 12th largest handset manufacturer in the World (According to Global Handset Vendor Market share report from Strategy Analytics). The Indian brand is reaching out to the global frontiers with innovative products that challenge the status quo that Innovation comes with a price. With an indepth understanding of rapidly changing consumer preferences coupled with the use of advanced technologies, Micromax has been able to differentiate itself from the competitors through innovation and design.
Karbonn: KARBONN is one of the leading mobile phone brands in India today and has been at the forefront of ushering in the revolution of Indian mobile phone handset brands challenging the established players in the business.
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KARBONN is a joint venture between Delhi-based Jaina Group and Bangalore-based UTL Group. Jaina Group started out as a distributor of mobile handsets around 15 years ago. To ring in new changes designed to truly delight the consumer, these two Indian telecom majors joined forces in March 2009 to launch KARBONN in a bid to trigger a telecom revolution in the country. The mobile company today boasts of one of the fastest & highest rate of model launches in India. KARBONN is extremely focused to reach out to the maximum number of people. With more than 85,000 outlets KARBONN reaches out to people across the length and breadth of the country, enhancing its penetration and reach. The brand has achieved a distribution footprint of over 90% coverage of the districts for KARBONN with more than 20 million devices sold in a very short span. Additionally, KARBONN caters to international customers through its expansion in other countries viz. Bangladesh, Nepal, Sri Lanka and South East Asia, Africa & Middle East. The main reasons for the success of are its focus on being affordable, convenient and easily available. The brand already has over 870+ service centres across India and 12+ service centres outside India and aiming to cross 1,000 by 2013-14, ensuring great after sales support.
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6. Competitive analysis of Nokia: Although Nokia is one of the best selling mobile brand in India it faces cut throat competition from its competitors. Due to lack in innovation and shifting to Windows software rather Android had lead to Nokia losing its Market share, and ranking as one of the best mobile seller of the world , It is facing huge looses and is bankrupt. Following are the tools used for analyzing Nokia performance and competitive analysis in the market. 1)
SWOT Analysis
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Five force porter’s model.
6.1 SWOT Analysis: SWOT analysis (alternatively SWOT Matrix) is a structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. A SWOT analysis can be carried out for a product, place, industry or person. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favourable and unfavourable to achieving that objective. •
Strengths: characteristics of the business or project that give it an advantage over others
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Weaknesses: are characteristics that place the team at a disadvantage relative to others
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Opportunities: elements that the project could exploit to its advantage
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Threats: elements in the environment that could cause trouble for the business or project
Identification of SWOTs is important because they can inform later steps in planning to achieve the objective. 26
Strength: *
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Nokia is the world’s largest producer and distributor of cell phones. It has a well established distribution channels around the world.
Weakness: *
Nokia has declining profits since 2010.
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Stiff competition from Android and IOS devices.
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Competition from local brands in terms of pricing and software such as karbon and Miramax.
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Brand value.
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It has strong R&D facilities.
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Updating of software.
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It makes environmental friendly products.
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Marketing and advertising strategy.
There are fewer applications for Nokia devices compared to IOS and Android.
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Microsoft Nokia partnership.
Opportunity:
Threat: 27
Nokia has a huge market presence in emerging markets, than its competitors in Europe and Americas.
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Cut throat competition from competitors such as Samsung and Apple.
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Introducing of new product line and features.
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Updating software to Android (or) coming up with better features in windows
Declining brand loyalty and market presence due to lack in features and software
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Takeover of Nokia by Microsoft can lead to introducing of new and innovative products.
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6.2 Porter’s Five force analysis of Nokia : The Porter's Five Forces tool is a simple but powerful tool for understanding where power lies in a business situation. This is useful, because it helps you understand both the strength of your current competitive position, and the strength of a position you're considering moving into.
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Threat of new entrants: •
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The mobile phone industry is already a well established market and the threat of a new entrant is quite low, as the technology needed to rival the devices already available is quite advance if they want to differentiate from them. The barriers to entry in the mobile phone industry is high because any new entrants will need high investments in R&D, technology and marketing in order to compete with the established organisations. Nokia is a well established brand and has a strong market presence distribution channel and it would be difficult for the new entrants to compete with nokia in terms of brand presence and distribution access. It faces competition from local made mobile brands and china made phones, in terms of pricing for low end mobiles. Ex: Karbon, Maxx etc.
Power of Suppliers: •
Although Nokia rely on its suppliers to supply equipment for their advanced mobile phones there are actually a number of large equipment makers, which Nokia could switch to.
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The software suppliers for their smart phones are now Microsoft, who will have a very high bargaining power.
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As the leading mobile phone company in the industry they are in a very strong position when bargaining with their suppliers.
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Nokia are in the position where they can bargain and negotiate with any mobile phone hardware maker because there is a high number of equipment suppliers that are readily available to them should their current suppliers attempt to bargain for more money with them.
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Nokia’s main argument would be the fact that they are a global organisation that has the highest market share in the industry, so the suppliers would not want to lose such an illustrious organisation.
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On the other hand, Nokia have recently created an alliance with Microsoft for their software which would be considered a major coup for Nokia more than Microsoft. As a result, Microsoft will have a lot of power when negotiating a price and share because the deal is more beneficial to Nokia than Microsoft.
Power of Buyers: •
The power that customers have is rising because of the increasing number of choices in the mobile telecommunication industry.
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With a lot of the Nokia competitors all offering similar packages (e.g. unlimited texts and calls) the industry is very price sensitive with customers seeking out the best value for money.
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Many of the consumers will also be tied into long term contracts so switching from one handset to another will be difficult and expensive for the consumer, as a result they may not want to change until the contract is finished.
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The mobile phone industry is a competitive market where the number of choices is very wide, resulting in the consumer having a lot of power because they can choose to go to one of Nokia’s many rivals if they feel Nokia are not good enough.
Industry Rivalry: 30
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Nokia faces cut throat competition from its competitors, Samsung, Apple.
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Nokia is no longer the world’s no.1 mobile seller, it has declining sales and is losing its customer base and market as it is unable to compete with its competitors.
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Nokia’s competitors uses Android and IOS software where as nokia uses Windows software, Android and IOS devices have a huge customer base and users prefer them due to better features and application market.
Threat from substitute products: Mobile phones have become an everyday necessity in peoples’ lives because of the important functions that they can do and are all available in just one handset. No other product has the ability to make phone calls, send messages, surf the web and many more in one device. The idea of being in constant communication with someone at anytime and anywhere makes the mobile phone a very important device to people. On the other hand, a mobile phone can be dissected into the key function where there are substitutes for the functions, such as the camera function on a mobile phone can be substituted for a digital camera which can do a better job than the camera in a mobile phone. In conclusion, the threat of a substitute product is very low due to the fact a mobile phone is no longer just for making calls but for all the other function as well are expected on all mobile phones.
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7.Introduction to Marketing "Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services, organizations, and events to create and maintain relationships that will satisfy individual andorganizational objectives." The new definition of marketing, as released bythe American Marketing Association is:- Marketing is an organizational function and a set of processes for creating,communicating and delivering value to customers and for managingcustomer relationships in ways that benefit the organization and its stakeholders. "Marketing is a social and managerial process by which individuals andgroups obtain what they need and want through creating and exchanging products and value with others." (Kotler & Armstrong 1987) The Mission of marketing is satisfying customer needs. That takes place in a social context. In developed societies marketing is needed in order to satisfy the needs of society's members. Industry is the tool of society to produce products for the satisfaction of needs. Marketing is one of the most important functions in business. It is thediscipline required to understand customers' needs and the benefits they seek. Academics do not have one commonly agreed upon definition. Evenafter a better part of a century the debate continues. The Mission of marketing is satisfying customer needs. That takes place in a social context. In developed societies marketing is needed in order to satisfythe needs of society's members. Industry is the tool of society to produce products for the satisfaction of needs.Marketing is one of the most important functions in business. It is the discipline required to understand customers' needs and the benefits they seek. Academics do not have one commonly agreed upon definition. Evenafter a better part of a century the debate continues. In a nutshell it consistsof the social and managerial processes by which products (goods or services) and value are exchanged in order to fulfill the needs and wants of individualsor groups. Although many people seem to think that "Marketing" and"Advertising" are synonymous, they are not. Advertising is simply one of the many processes that together constitute Marketing. 32
7.1 What is marketing ? The term marketing has changed and evolved over a period of time, today marketing is based around providing continual benefits to the customer, these benefits will be provided and a transactional exchange will take place. The Chartered Institute of Marketing define marketing as ‘The management process responsible for identifying , anticipating and satisfying customer requirements profitability , If we look at this definition in more detail Marketing is a management responsibility and should not be solely left to junior members of staff. Marketing requires co-ordination, planning, implementation of campaigns and a competent manager(s) with the appropriate skills to ensure success. Marketing objectives, goals and targets have to be monitored and met, competitor strategies analysed, anticipated and exceeded. Through effective use of market and marketing research an organisation should be able toidentify the needs and wants of the customer and try to delivers benefits thatwill enhance or add to the customers lifestyle, while at the same timeensuring that the satisfaction of these needs results in a healthy turnover for the organisation. Philip Kotler defines marketing as ‘satisfying needs and wants through anexchange process’Within this exchange transaction customers will only exchange what theyvalue (money) if they feel that their needs are being fully satisfied, clearlythe greater the benefit provided the higher transactional value anorganisation can charge.P.Tailor of www.learnmarketing.net suggests that 'Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer’.
Advantages: •Identifies needs and wants of consumers •Determines demand for product •Aids in design of products that fulfill consumers needs •Outlines measures for generating the cash for daily operation, to repay debts and to turn a profit 33
•Identifies competitors and analyzes your product's or firm's competitive advantage •Identifies new product areas •Identifies new and/or potential customers •Allows for test to see if strategies are giving the desired results
Disadvantages: •Identifies weaknesses in your business skills •Leads to faulty marketing decisions based on improperly analyzed data •Creates unrealistic financial projections if information is interpreted incorrectly •Identifies weaknesses in your overall business plan
7.2 Market Segmentation: Market segmentation is one of two general approaches to marketing; the other is mass-marketing. In the mass-marketing approach, businesses look at the total market as though all of its parts were the same and market accordingly. In the market-segmentation approach, the total market is viewed as being made up of several smaller segments, each different from the other. This approach enables businesses to identify one or more appealing segments to which they can profitably target their products and marketing efforts. The Market-Segmentation process involves multiple steps. • The first is to define the market in terms of the product's end users and their needs. • The second is to divide the market into groups on the basis of their characteristics and buying behaviors. Types of Segmentation: • Geographic segmentation • Demographic segmentation • Behavioural segmentation • Psychographic segmentation
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Geographic segmentation: Marketers can segment according to geographic criteria窶馬ations, states, regions, countries, cities, neighbourhoods, or postal codes. The geo-cluster approach combines demographic data with geographic data to create a more accurate or specific profile. With respect to region, in rainy regions merchants can sell things like raincoats, umbrellas and gumboots. In hot regions, one can sell summer wear. In cold regions, someone can sell warm clothes. A small business commodity store may target only customers from the local neighbourhood, while a larger department store can target its marketing towards several neighbourhoods in a larger city or area, while ignoring customers in other continents.
Demographic segmentation: Demographic Segmentation involves dividing the market on the basis of statistical differences in personal characteristics, such as age, gender, race, income, life stage, occupation, and education level. Clothing manufacturers, for example, segment on the basis of age groups such as teenagers, young adults, and mature adults. Jewellers use gender to divide markets. Cosmetics and hair care companies may use race as a factor; home builders, life stage; professional periodicals, occupation; and so on.
Behavioural segmentation: Behavioural segmentation divides the market into groups based on their knowledge, attitudes, uses and responses to the product. The following are commonly applied behavioural segments: Occasions: Groups individuals according to the occasions when they purchase, use or think of buying a product. Benefits Sought: Groups individuals according to the benefits they seek from the product. Usage Rate: Groups individuals according to the level of usage they make of the product, be it Heavy, Medium or Light usage. User Status: Groups individuals according to whether they are non-users, potential users, first-time users, regular users, or ex-users of a product Loyalty Status: Groups individuals according to their level of loyalty to the product. 'Hard core loyal' always purchase the product / brand in question. Whilst 'Soft core loyal' will sometimes purchase another brand, and 35
'Switchers' will not specifically seek out a particular brand, but rather purchase the brand available to them at time of need, or that which was on sale. Buyer Readiness Stage: Groups individuals according to their readiness to purchase the product. This segmentation model is particularly useful in formulating and monitoring the marketing communication strategies employed to move consumers towards purchase of a product or brand.
Psychographic segmentation: Psychographic Segmentation is based on traits, attitudes, interests, or lifestyles of potential customer groups. Companies marketing new products, for instance, seek to identify customer groups that are positively disposed to new ideas. Firms marketing environmentally friendly products would single out segments with environmental concerns. Some financial institutions attempt to isolate and tap into groups with a strong interest in supporting their college, favourite sports team, or professional organization through logged credit cards. Similarly, marketers of low-fat or low-calorie products try to identify and match their products with portions of the market that are health-or weight-conscious.
7.3 The Segmentation Process Once a company has gathered information from these segmentation bases, it must decide how to divide the market, bearing in mind that market segmentation seeks to minimize the differences within a segment and maximize the differences among segments. Consequently, depending on the product or service to be marketed, simple divisions along age, gender, or geographic lines alone may yield segments that are too vague to be of use. Instead, marketers may have to consider several characteristics or clusters of characteristics in order to divide the market into useful segments. For example, when considering beer consumption, marketers must look at both age and gender: the majority of beer drinkers are both young and male. •To begin segmenting the market, marketing managers must select the
segmentation bases they will use to develop the segments, depending on the products or services to be marketed. Marketers may select a few segmentation bases they believe are the most relevant at the outset and develop market segments using them. On the other hand, they may compile 36
a large array of information using all the segmentation bases and use this information to group consumers in various segments. •Next, marketers conduct any primary market analysis they may need, by preparing questionnaires and samples and by assessing the response to them. Using this information, marketers try to determine the most fruitful segments—the ones with greatest similarities within them. Because this process can be labour-intensive and require advanced knowledge of statistics, companies often rely on outside firms or artificial intelligence technology to produce meaning full market segments. •Once relevant, stable, reachable, profitable market segments are
established, marketers can target the segments they believe will offer the best opportunities for growth given their products and resources and the ones they believe that correspond to the products being marketed the best. Finally, marketers can develop and launch advertising campaigns that appeal to the various segments. Companies tend to choose the largest segments, although the segments with the most consumers are not always the most profitable and usually have the most competition. Consequently, marketers might benefit from considering targeting smaller segments or segments ignored by competitors, such as low-income consumers, which is frequently referred to as “niche marketing. “Low-income consumers, which are frequently referred to as “niche marketing.”
7.4 Market Segmentation for Nokia The decibel levels in the cellular market are increasing with service providers stepping on the gas. Not to be left behind, handset manufacturers are using precise segmentation to carve up their share. Divide and rule seems to be working. According to a report published in May 2001, the all-India cellular subscriber figures stand at 38,71,514. With aggressive marketing by service providers, this figure is expected to increase at a very rapid rate. If current decided levels in the market are anything to go by, these expectations are well on the way to being met. However, amidst this entire melee one cannot ignore the efforts of the handset manufacturers. Both service providers and handset manufacturers have been complementing each other well with each fuelling the demand for the other. Industry observers attribute the success of handset manufacturers to shrewd market segmentation. The big three of the 37
mobile handset market - Nokia, Ericsson and Motorola, have studied the market and segmented it precisely.
Segmentation of Nokia: Connecting people! Nokia, arguably the biggest player in the world, has divided the market into four segments: •Hi-fliers: The biggest segment as far as Nokia is concerned consists of 'Hi-Fliers', corporate executives who use a mobile phone to increase productivity at work. Aged between 25-45, the segment looks for data transmission and other business-related features. In most cases, the company sponsors the handset; hence price is not a major consideration. •Trendsetters: In any technology adoption cycle, the first segment to adopt an emerging technology is dubbed as 'the early adopters'. For Nokia, these early adopters are 'Trendsetters' who are most receptive to advanced models. This was the segment at which WAP-enabled models were aimed. •Social contact: The third segment for Nokia is the upwardly mobile, socially-conscious segment that uses a mobile to stay in touch. Today's youth and affluent housewives constitute two major chunks of the segment. •Assured: The fourth and last segment as defined by Nokia comprises of CEOs, highprofile celebrities, industrialists and other high "net worth" individuals. The fact that the segment cannot do without a mobile phone makes it the 'assured' segment. Geographic: World region – Asia Country – India Cities – Reach out maximum places
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Demographic: Age – All age group Gender – Male, Female Income – All income groups Occupation – Every sector Religion – Irrespective of religion Psychographic: Social class – All class of people Lifestyles – Urban, rural, and even far villages Behavioural: Benefits – Quality Loyalty status – Strong
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8. Market Survey of Nokia: The following market survey was done through Google form maker and it was done online , the objective of the market survey was to find out the market and the brand loyalty of the nokia in the market.Sample size – 30
Questionarie of Market survey : 1) If you had to buy a new mobile phone/ smart phone which brand would you prefer ? •
Apple
•
Samsung
•
Nokia
•
Micromax
•
HTC
2) Which of the following Mobile Phone brand do you currently use ? •
Apple
•
Samsung
•
Nokia
•
Micromax
•
HTC
3) Have you ever owned a Nokia phone ? •
Yes
•
No
4) What are the thing's you look in while purchasing a phone ? •
Brand 40
•
OS
•
Price
•
Screen size
•
Battery
•
Special features
•
Camera
5) Would you prefer to buy Nokia phones over the other brands present in the market ? •
Yes
•
No
6) What are the factors do you think , that make other brand mobile products better than Nokia ? •
Technology
•
OS
•
Price
•
Application Market
•
Special features
•
Camera
•
Battery
7) Would you prefer anyone to buy Nokia Products ? •
Yes
•
No
8) What's your opinion regarding the Nokia's newly launched product Lumia?
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9) Have you seen any online advertising for Nokia products over the last few weeks? •
Yes
•
No
10) Personally , what do you think Nokia product are basically lacking in ?
11) Do you like the Windows OS for Nokia Lumia phones ? •
Yes
•
No
12) Are Nokia phones worth a buy ? •
1
•
2
•
3
•
4 42
•
5
13) Please indicate your gender ? •
Male
•
Female
14) What is your occupation ? •
Student
•
Working
15) To which of the following age groups do you belong ? •
18-24 years
•
25-34 years
•
35-44 years
•
45-54 years
•
55- 64 years
•
65 years old
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Detailed summary in diagrams:
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45
46
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What's your opinion regarding the Nokia's newly launched product Lumia? They are very good, especially the camera in the 920. But it's still lacking. I've tried using one and the experience was not very appealing. The screen even froze at times. Didn't get my hands on the product yet but heard from word of mouth that its a reasonable good phone. The colors are fab! I didn't like Widows in nokia. Try to change it to adriod . For sure nokia again nokia ill b in top .. i feel windows 8 is bit complicated to use!! Awesome phone. heard that few series were slow and costlier ones were only good... i persnally have not used any..
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Lumia is awesome Very interactive.... First of its kind... awesome !! The only drawback is that the operating system is Windows Looks good Awesome!! I use Lumia 920! iv heard negative opinions about this model. my friend has it and he said it hangs very often even though he has bought it just a few days back. i dont like the colours as well. Camera is too good , sadly the OS isnt No Its good but not awesome Unique good I'm not aware of that product!!! I recently purchased a low-end Lumia phone. For some reason, people don't trust Nokia's new product and the Windows 8 OS. While the phone has given me some technical trouble, mainly because I think I bought the lowest-end version, I love its interface and ease of accessability. Complete winner in my book. not great I do not know this product. Lovely model...but windows os is not preferred by me...had an bad experience with windows os , Awesome Lumia is amazing as it involves a lot of customization and is very user friendly not worthy iam using nokia lumia..520 it is good..and ...nice..but delay is that ...no andriod..in dis...if we have anroid software it is gud to download anything without cost..but hear in lumia...it take cost for downloading.. example...any games..
Personally, what do you think Nokia product are basically lacking in? (few selected responses) Special features and application market Better n simple software External Branding Os and market store!
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User interface of windows 8 is difficult to operate They are not upgrading wid the market...i am using mobile from past 7 yrs....i used nly nokia phone for 5 yrs....i really love the brand but it is lacking software development....if nokia had taken android it would hav been good for nokia Instagram and a couple of applications that are essential on iOS and Android. OS is most important additional features when compared to samsung or apple is lacking They do not quickly adapt to new technological developments and have a history of being expensive. Although of late, there have been improvements in these two aspects. delay is that ...no andriod..in dis...if we have anroid software it is gud to download anything without cost..but hear in lumia...it take cost for downloading.. example...any games.. User interface of windows 8 is difficult to operate. OS , brand , price and service
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