Nokia Oyj chief executive Stephen Elop, seeking to stem market-share losses to cheap Android smartphones and unbranded handsets, will get his first opportunity tomorrow to win back Asian customers.
Elop will lay out the company’s strategy and show customers new models at Nokia Connection 2011 in Singapore, according to the company. It will be his first major speech in Asia since the former Microsoft Corp. executive became chief executive.
After spending his first months devising a plan to fight Apple Inc’s iPhone and phones equipped with Google Inc’s Android in Europe and the US, Elop may be turning his focus to fending off Samsung Electronics Co and ZTE Corp in Asia. At stake is a region that’s home to the world’s two biggest phone markets and where growth is projected to exceed 40 per cent over the next four years.
“Due to their race with Apple, there was so much focus on the developed markets that this idea of producing and selling affordable handsets was really lost,” said Boris Boehm, who helps manage ¤1.2 billion ($1.7 billion), including Nokia shares at Aramea Asset Management in Hamburg. “They really forgot Asia.”
During his nine months as chief executive, Elop has announced more than 8,800 job cuts, including outsourcing agreements, and said the company will replace its Symbian smartphone software with Microsoft’s Windows Phone 7 operating system to revive the world’s largest mobile phone maker by units.
Shares Decline
Investors aren’t convinced. Since he was named chief executive, Nokia has fallen more than 40 per cent in Helsinki and is trading near 13-year lows.
While China led Nokia’s markets in the first quarter with a 30-per cent sales increase, the company said on May 31 it was facing intensifying competition from local suppliers in the country, driving down prices. China and the Asia-Pacific region accounted for 45 per cent of Nokia’s device sales in the first quarter, the manufacturer said in April.
That hasn’t stopped the slide. Its share in China tumbled to 20.4 per cent last year from 31.5 percent in 2009 and in India, Nokia dropped to 30.2 percent from 48.9 percent in one year, according to estimates at Gartner Inc.
Sales of mobile phones in Asia would probably reach 1.27 billion units in 2015, or half of the global market for handsets, according to Anshul Gupta, an analyst at Gartner in Mumbai. Sales this year are forecast to be 900 million units.
‘Hugely Important’
Nokia would also participate in the CommunicAsia conference, an gathering of telecommunications industry in Asia, for the first time in a decade, according to the programme’s organisers. “It’s a hugely important market for us,” executive vice-president Colin Giles said. “We introduced our first phone specially designed for the Asian market 14 years ago. It was small, had a full graphics display and featured many Asian languages from Chinese to Thai to Bahasa. We have not looked back since.”
Globally, Nokia’s shipments fell 2.3 per cent in the first quarter, driving down its market share more than five percentage points to 25.1 per cent. Apple boosted its share to 3.9 per cent, ZTE to 2.3 per cent and HTC to 2.2 per cent. By revenue, Nokia was overtaken last quarter by Cupertino, Apple as the industry leader. Nokia, which this month won a patent suit against Apple, may ship fewer smartphones than Samsung and the maker of the iPhone this quarter as part of a bigger “shift in power to Asia,” Nomura Holdings Inc. analysts including Stuart Jeffrey wrote in a report this month.
