Thursday, October 28, 2010

The India market share loss could cost Nokia 20 %

IDC recently came out with a report on market share of Nokia in India indicating part of Nokia, which mobile phone handsets has decreased from 54% in 2009 to 36.3% in the second quarter of 2010. Nokia, however, refute these claims arguing that IDC do not count shipments from its plant in Chennai []. The India is the second largest market after China for Nokia in emerging markets. If the IDC claims are true, and continues this steep decline in market share, it may be a disadvantage for the Trefis price estimate $12.33 for Nokia stock.

Potential drawbacks of Nokia stock

Has a few months, we discussed how Nokia is slowly losing its dominant position in the Indian market of mobile phones.Article of IDC not only reinforces this point, but also indicates that market share declines are much larger that had originally been thought.Our estimates indicate that Nokia sold approximately 60 million phones in India in 2009, a total of 300 million sold in markets émergents.Cela implies that about 20% of Nokia emerging market sales come from single India, which makes it a major enterprise .Rapport IDC India sales declining market suggest that share of Nokia on the larger emerging markets may also refuse to usefully.

We believe that the market shares of Nokia in emerging markets (India, Brazil and China) will decrease by 40% in 2009 and 34% at the end of the forecast period Trefis.

If, however, the market share decreases at a faster rate to 20 per cent by 2016 to 34% that we currently forecast, it could a 20% reduction for the Trefis price estimate $12.33 for Nokia stock.

Factors behind this rapid decline

Nokia is in competition with Apple and Research in motion market high-end mobile phones and with LG, Samsung and Sony telephony market mobile value.However, the emergence of local actors in India asked a more difficult competitive threat to enterprises of Nokia.Nokia has been losing a part of new Indian mobile companies such as Micromax and Spice Mobile Karbonn mobile because she neglected popular trends in the Indian market of mobile phones.Nokia has also been slow to identify popular features such as dual SIM card phones and networking sociales.Dans applications simultaneously, competitors have invested massively in advertising campaigns that have helped to grow rapidly.

Enough dual SIM cards:In recent years, many Indian consumers have begun to maintain multiple accounts mobiles.Les reasons include costs and the need for different phone numbers for official purposes and personnelles.En result, combined with dual SIM card capacity have become very popular.Nokia has shifted its competitors together card double SIM market handsets.

Limited social networking capability:Aboriginal youth were early adopters and enthusiasts of social networks mobile.Nokia was late to enter the arena of networking social.En revenge, rival Samsung has increased its share of market in large part due to the success of its popular Corby phones which include extensive social networking functionality.

You can see the full $12.33 Trefis Price estimate of Nokia stock here.

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