image courtesy www.janchipchase.com
Just a quick post on something I uncovered as I was digging around for the previous post, that again, Nokia's launched a service that seems to directly correlate to Jan Chipchase's earlier work on Village phones, particularly where there is no existing infrastructure. Here's the snippet from their press release,
Nokia Siemens Networks has now introduced its new Village Connection, a solution aimed at providing affordable rural connectivity and coverage in new growth markets. Village Connection is based on an easy concept: build rural connectivity village by village, exploiting a franchise-based business model between operator and local village entrepreneur.
The recently-announced Nokia Siemens Networks Village Connection solution supports GSM-based voice and SMS services, including roaming and connection to the outside world. A range of value-added services can be added, such as cost-effective Internet services in villages via the Internet protocol link.
Village Connection is promoted as benefiting many people, in the opinion of Ari Lehtoranta, Head of Radio Access Networks, Nokia Siemens Networks: “Our solution brings connectivity, access to mobile services and economic activity to the villages. It enables operators to extend their network coverage cost-effectively in rural areas where rolling out and operating a traditional GSM network would be too cost-intensive.”
Niti, if I were Nokia, I'd take Mace's comments seriously. Even in India where Nokia enjoys a huge market share and is the default for mobile phones (like we say "Cadbury" for "chocolate"), its share is slipping due to Motorola's terrific sex appeal and Sony Ericsson's clear focus on music & imaging (courtesy their Walkman and Cybershot brands). "Good guy" Nokia faces the real and present danger of becoming the "Bata" or "Tata" of India - a brand of the masses, but with sharply declining penetration in the premium, luxury & performance segments. Their new N93 is creating waves (but has also received some scathing reviews), so let's see if they can pull themselves back to the top end.
Posted by: Arvind | May 18, 2007 at 14:23
Arvind,
I would beg to disagree. If indeed market share is slipping [since its not borne out by the numbers http://www.flickr.com/photos/nitib/481927765/in/set-72157600170083901/] I am going to hazard a guess that from the models and features you describe, the affected segment is the top of the pyramid, or creamy layer.
You say "present danger of becoming the "Bata" or "Tata" of India - a brand of the masses, but with sharply declining penetration in the premium, luxury & performance segments."
I say that this is a strategic choice that a brand or company makes in order to grow their market share or sales figures. You can choose either a high margin low volume strategy, or you can choose a low margin, high volume strategy. In the emerging markets of developing nations, Nokia has clearly chosen to penetrate the low margin, high volume segment as their global growth strategy.
Therefore, with reference to the context of the bottom of the pyramid and the mobile market thereof, Nokia's new product and service offerings - shared phones, village GSM services - all fulfill demonstrated unmet needs, and assure them significant market share and sales.
Is becoming a Tata [I would love to have a brand equity that strong] or a Bata [ubiquitious] necessarily a bad strategy or a danger?
Posted by: Niti Bhan | May 19, 2007 at 05:10
Arvind
I agree with Niti. Bop has been a strategic choice of Nokia. Though Motorola has penetrated the premium segment with its thin and sleek looking razr phones it has failed (Missed a chance) to creat a brand image in the minds of indian Consumers. (hence cannot assure their future in this segment as well) Though motorola has taken a BOP route by making the 1000 rs phones but does it really solve the purpose. Motorola has failed to understand the context and hence end up with phones having confusing User interface, low battery life etc. Bop approach is not just about reduing price but really understanding the context and design and develop relevent sollution which would be value for money. Check out Jan's Work (www.janchipchase.com) and you would know what understanding the context means.
again agree with Niti .. on BATA and TATA
'BATA' - they are rocking since the last couple of years check out the design of their lates collection and most imp compare the price.
Tata - very agressive these days in all sectors : motors (1-lack car) steel (corus deal) tata infotec (TCS and tata elexy work) tata tele (major show planned for next year) did i miss anything? ? ?
Posted by: Rushikesh Kulkarni | June 13, 2007 at 10:52