First Mover in Mobile
How Nokia is selling cell phones to the developing world
by Jack Ewing
Looking for ways to make mobile handsets practical for people living in developing countries, Finnish mobile-phone maker Nokia Corp. (NOK) has trekked to far corners of the globe, from the narrow alleys of Mumbai to the vast slums of Nairobi. The result is a slew of new features especially designed for places with harsh weather and harsher living conditions. One example: The company created dustproof keypads—crucial in dry, hot countries with many unpaved roads, as Nokia executives learned from visits to customers' homes in India. Innovations like those helped generate sales in 2006 of $3.7 billion for Nokia in India, making the company the market leader in the fastest-growing mobile-phone market in the world.
But Nokia's initiatives for emerging markets reach way beyond traditional product innovation. These days, it's also breaking the mold on how it markets, distributes, and sells phones in developing countries. In India, Nokia estimates there are 90,000 points-of-sale for its phones, ranging from modern stores to makeshift kiosks, even more than China's 40,000.
More at: http://www.businessweek.com/innovate/content/may2007/id20070504_299909.htm
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The article describes Nokia's strategy of using the first-mover advantage in selling cell phones in developing countries. With this move Nokia will be able to capture higher market share in those huge markets. With the purchasing power of the developing countries going gradually up, Nokia expects to build its brand and trust among those customers. Nokia's key element in its strategy in Europe is its brand loyalty, which it intends to apply for the developing countries long-term. The risks of going in that undeveloped market are the low margins on the phones.
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