Crowning Glory

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It was a significant year for Nokia, the market leader, with India emerging as its second largest market after China. Nokia not only consolidated its leadership position but also grew by leaps and bounds. India is now also the only country where Nokia is present in the entire range-research and development, retail, manufacturing, and services.

According to V&D estimates, Nokia has around 62.5% of the total handset market share in India. The company clocked revenues of Rs 15,000 crore, up from Rs 11,486 crore, recording a growth of 30.6%. Nokia also launched twenty-seven models last year, eight of which are in the entry-level. Nokia's focus remains the GSM segment, evident from the fact that the company is planning to launch thirty GSM models as against the ten CDMA models this year. The CDMA models to be launched this year are primarily for the replacement market.

The year gone by also saw Nokia launching its services brand, Ovi. Ovi is an open destination where people can link to all of their existing Web communities, feeds, and content. Currently, the company is working toward creating a sustainable ecosystem to make it relevant and compelling for consumers.

Nokia 1

Nokia is in discussions with content providers and operators on services. Realizing the importance of services, Nokia plans to have a retail presence for the Ovi brand through both Nokia Priority Stores as well as the multi-brand outlets as possible physical distribution of content.

Last year the company restructured its operations. Now, Nokia has the following units-devices, which makes handsets; services and software, which offers Internet services and products for the enterprise market; and markets, which manages supply chain, sales, and marketing. The company also announced fresh investment toward its manufacturing facility to the tune of Rs 300 crore for the year. Cumulatively, the investment has reached Rs 840 crore.

As of March 2008, Nokia has shipped 125 mn 'Made in India' handsets, and has raised its headcount to 8,000. This year the company plans to make the Nokia brand stronger.

Growth for Nokia will be driven from both ends of the spectrum-the rural as well as the upwardly mobile users in metros. With around 110 mn Nokia users in the country, the replacement market is huge, and the company looks forward to tap this market with innovative features. Increasing penetration in the rural segment is part of its marketing strategy. Also the company is planning to increase its workforce in the country and infuse more funds in its manufacturing unit near Chennai.

For rural India, mobiles will become a window to the world

VP and MD, Nokia

D Shivakumar

Address: Nokia India, 5F Tower-A&B, Cybergreen, DLF Cyber City, Sector-25A, Gurgaon-122002 Haryana
Tel: 91-124-4199000 Fax: 91-124-4199104
Website: www.nokia.com

Highlights

Infusion of funds in the company's Chennai plant
Nokia launched a new services brand, Ovi
India is now the second largest market, after China
Plans to invest $75 mn in its manufacturing facility in 2008
Out of the 130,000 outlets, 75,000 are single brand shops that sell Nokia

It was a significant year for you, though the market share has remained mostly static. How would you rate your performance in the last fiscal?
It was an important year for us. India is now the second largest market for Nokia, second only to China. We have grown fabulously in the last fiscal. India is the only country where we are present in the entire range- research and development, retail, manufacturing, and services. We have made substantial investments in our manufacturing unit, and, as of now, we export to 59 countries from India. We have also increased our head count substantially.

Nokia is a very strong brand today. Would you be undertaking any brand building activity since the focus is now on the rural segment?
This year we are looking at making the brand stronger, especially in the rural sector. Making the products as well as services available in rural India is our key focus this year. As of now, there are 1,30,000 mobile outlets in the country, out of which 75,000 are Nokia brand outlets. Isn't that proof enough that we are growing.

How many models would you be launching in the current year?
On an average we bring out 40 to 50 models every year, and it is not going to be any different this year. In CDMA we will launch around 10 new models and the rest in the GSM category. In CDMA, we will mostly be addressing the replacement market.

What according to you will be the growth drivers for the handset market this year?
Growth is going to come from two factors - penetration and replacement. First time buyers in small towns and the rural segment are going to drive the market. We believe that the rural segment is going to grow huge in the current year. For rural India, mobile will become a window to the world. On the other hand, replacement is going to be immense in the bigger cities.

There are 110 mn Nokia users in the country, so the replacement market is huge. We would be focusing on innovative features to garner a larger share of this market. The growth is primarily going to come from the rural segment, although distribution in the there will be a challenge, next to sharing of towers.

What are your plans in the enterprise segment?
The enterprise market is at the top-end and the requirement of this market is very different from the other markets. The size of the screen, storage space, and battery life are factors affecting the demands of this segment, and we are working on them. As the concept of a mobile workforce starts evolving, the segment is going to grow immensely in the coming years.

How do you see the handset evolving in the coming year?
We believe that in the next 10 years, Nokia will be the second biggest influence on the country's youth after their parents. Handsets have already become critical for women and children from the safety perspective. For youth or people between 15-25 years, the handset is a personality statement and a means to feel a part of the community.

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