Abstract

The case discusses the downward spiral of the once leading mobile handset company, Nokia, in India. Based in Finland, Nokia entered India in 1994. From then till 2007, it had been leading the Indian mobile market. Nokia had been popular for introducing low cost phones catering to the needs of low income consumers. It customized its products for the Indian market and offered Indian ringtones, user menu in local languages, and sturdy phones that could withstand the extreme weather and dust in India. However, after 2007, Nokia failed to sense that trends were changing. It ignored the changing demands and needs of the customers. Also, its inability to cope with the severe competition and its dependence on a more complex operating system, Symbian, made its position shaky in India. Nokia was in for competition in the smartphone market from international companies like Samsung and Apple and also local companies. At the same time, the local companies like Micromax and Karbonn came out with low priced, feature rich phones, threatening Nokia’s position in the low priced handset market. The success of the smartphones from Samsung and Apple could be attributed to their simple operating system in comparison to the complicated Symbian of Nokia. In 2013, the US-based Microsoft announced that it would acquire some of Nokia’s businesses which included its Devices and Services Business with mobile phones and smart devices segments. This acquisition was expected to have an impact on the Indian market too. Experts said that smartphones from Nokia would be available at a lower price as Microsoft would not charge a licensing fee on the Nokia handsets that would be running on the Windows operating systems. This would enable Nokia to come out with low priced smartphones to cater to people who would be first time users of smartphones. At the same time, Microsoft could not afford to ignore the feature phone segment, which accounted for around 70% of the Indian market. It remained to be seen how the company would withstand the competition from other companies and build on synergies that Nokia had built up in the country over the years.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the causes for Nokia’s success in India.
• Study the strategies adopted by Nokia to lead in the Indian market.
• Examine the various factors which led to Nokia losing its position in the market.
• Discuss how the acquisition of Nokia by Microsoft would impact its Indian operations.

Keywords

Mobile phones, Nokia, Apple, Samsung, India, Microsoft, Android, Symbian, Localization, Smartphones ,Acquisition , Dual SIM Phones  ,Tablets