Friday, April 18, 2008

Nokia CEO Disses iPhone, Doesn't Seem Worried That U.S. Market Share Slipped Again

I am beginning to despair that Nokia (NYSE: NOK) will ever understand the U.S. market. As its recently revealed quarterly earnings tell us, its share of the market here dropped yet again. Despite the fact that Nokia is building a touch-enabled device that looks eerily similar to you-know-what, Nokia CEO Olli-Pekka Kallasvuo called the iPhone a "niche" product.

Talk abut mixed messages. If the iPhone is a niche product, then why is Nokia building such a similar device? It just doesn't add up. Kallasvuo's statement boiled MacDailyNews' blood a bit. It wrote:

Kallasvuo is either incapable of applying the lessons of [the] iPod to iPhone and understanding what's coming his way or, much more likely, he understands perfectly and, since he has no answer, is saying just what many now-defunct (if they aren't making iPod accessories) MP3-makers said a few years ago. How many "niche" products have $100 million venture capital funds ready and waiting, exactly? Candy bars and way-too-late, fake, 1st-generation iPhones with craptastic UI's aren't going to cut it from here on out, Nokia boy. This June, the bloodbath really begins, and Kallasvuo sounds like he knows it.

MacDailyNews pulled no punches. Of course, it is assuming that June will see the iPhone 2.0, plus a 3G version of the iPhone. The iPhone's success may be locked in here in the United States, but MacDailyNews needs to remember that it isn't selling so well past our borders. U.K operator O2 recently slashed the price of the iPhone to stir sales. That's a clear indicator that it fails to impress everyone.

So what is Nokia really doing to combat the iPhone both abroad and here?

Time and time again I've heard Kallasvuo say that the U.S. market is important to Nokia, and it is doing everything it can to regain share here. At CES, I was told that Nokia is going to release 10 to 12 U.S.-specific handsets this year. We're nearly a third of the way through 2008. Where are they?

Neil Mawston, director of Strategy Analytics, said that Nokia's North American market share has plunged from 20% to 7% in the last two years. The world's No. 1 supplier of handsets (with 40% of the world market) has just 7% presence in the United States, the biggest market of them all. I think that speaks volumes. Mawston blames some of Nokia's failures here on its poor relationships with U.S. network operators. That could very well be the case.

I have to agree with MacDailyNews' opinion that Kallasvuo isn't learning anything from the success of the iPhone here. If it were, we'd see phones launched specifically for the U.S. that aren't warmed-over versions of products that have been in the world market for three-plus months.


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