Nokia Is Focused On The US Market – Will It Work This Time?
Nokia recently announced that it will focus on expanding its US presence by strengthening relationships with communication service providers and developing smartphones to address US customer requirements. We have heard this US market focus refrain from Nokia multiple times during the past few years. Nokia is the leading handset manufacturer in many other regions of the world, but the company has not had the same success in the US. Can Nokia succeed with its US market efforts this time around? To succeed, Nokia must address three key issues:
- Consumer smartphone usage is driving US market momentum. Nokia’s strength is in developing enterprise grade smartphones; however, the US smartphone market is increasingly driven by consumer purchases. Results from Forrester’s survey of IT decision-makers in North America reinforce this trend with approximately 60% of firms in North America providing some level of support to some types of personal mobile devices.
- Intense competition is coming from other mobile device manufacturers with a strong presence in North America. To succeed in the US market, Nokia will face stiff competition from RIM, Apple, and Android smartphones. RIM’s BlackBerry devices are the most commonly used operating system among North American enterprises, with 73% of firms officially supporting these devices. We are also seeing a rise in enterprise support of new types of mobile operating systems to support iPhone and Android smartphones. Currently 30% of North American enterprises support iPhone devices, and 16% support Android devices. In comparison, Symbian operating system devices, which Nokia develops, are currently only supported by 4% of US firms.
- Mobile operators are already strongly aligned with other device manufacturers. Mobile operators in the US are a key smartphone distribution channel. Nokia must establish relationships with these mobile operators and develop smartphone devices that address their network compatibility requirements. The network infrastructure in the US is dominated by GSM and CDMA networks. Nokia focuses on developing GSM devices, which limits the relationships Nokia could establish in the US to AT&T and T-Mobile USA. However, these two operators are already strongly aligned with other device manufacturers. AT&T has an exclusive relationship to distribute Apple’s iPhone devices and also sells BlackBerry devices, while T-Mobile USA distributes Google Android and BlackBerry smartphones.
Time will tell if Nokia’s renewed focus on the US market will work, but based on these three issues alone, it will definitely be an uphill battle.