Nokia, the Finnish company that is the world’s biggest maker of mobile phones, is an undisputed powerhouse in Europe, Asia and Latin America, with market share regularly topping 30 percent.
But in the US, Nokia’s signal has faded. As recently as March 2002, it led the US market with a 35 percent share. By last year, though, it slipped to 10 percent and by June of this year — the most recent figure available — Nokia’s share was only 7 percent.
Now the company is struggling to make amends in the US and its comeback effort has started to make headway. And yet, going into the crucial Christmas shopping season in the US, Nokia does not have a strong offering for the US smartphone market, the only part of the mobile industry that is growing. Three years after Apple introduced the iPhone, Nokia still has no alternative.
Many other players are struggling to compete with the iPhone, too. But because of a decade of mistakes, Nokia’s product line in the US has also been surpassed by LG, Motorola, Samsung and Research In Motion.
Among its biggest blunders, analysts and former Nokia executives say, the company failed to design many of its phones to the tastes of American consumers, instead mass producing devices for the global market to save on production costs.
Nokia did not anticipate changes in US consumer tastes, like flip phones and touch screens, said Neil Mawston, an analyst in London with Strategy Analytics. More crucially, perhaps, it also based its models on a European communications standard called GSM when roughly half the US market — including the customers of Verizon Wireless and Sprint Nextel — uses the CDMA format.
“Nokia, at the height of its success, decided not to adapt its phones for the US market. That was a mistake,” said Ari Hakkarainen, a Nokia business development executive from 1999 to 2007. “They are still trying to recover from this.”
Nokia must also contend with a global economic slowdown that has hurt its sales and earnings. Last week, Nokia reported a third-quarter loss of US$1.36 billion as sales fell 20 percent globally — and 25 percent in North America — from a year earlier.
Nokia has recently revamped its US operations to collaborate more closely with the major US operators — AT&T Mobility, AT&T’s wireless unit, Verizon, T-Mobile USA and Sprint Nextel. Together, they control 96 percent of US sales of mobile devices, according to International Data Corp, a research firm.
Starting in the middle of next month at the Best Buy retail chain, Nokia will sell a netbook, the Nokia Booklet 3G, which is a model for its new collaborative strategy.
The US$300 minilaptop will come with a US$60 monthly contract at AT&T Mobility.
“Nokia’s mobile device leadership, together with AT&T’s mobile broadband network leadership, Best Buy’s retail reach and Windows 7, is a very strong lineup,” Microsoft chief executive Steven Ballmer said last week.
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