A PROJECT ON MARKETING STRATEGY AND SALES OF NOKIA IN ASSAM

PREPARED BY: MAUSAM CHOUDHURYUNDER THE GUIDANCE OF MERCANTILE MARKETING (INDIA) PVT LTD, GUWAHATI

CONTENTS

1. NOKIA : AN INTRODUCTION - - - - - - - - - - PAGE 1-11

2. DETERMINATION OF PROBLEM AREA - - - - PAGE 12

3. COLLECTION OF DATA - - - - - - - - - - - - - - - - PAGE 13

4. DATA ANALYSIS - - - - - - - - - - - - - - - - - - - - - PAGE 14

5. FINDINGS - - - - - - - - - - - - - - - - - - - - - - - - - - - PAGE 15

6. MARKETING STRATEGY OF NOKIA - - - - - PAGE 17-23

7. MARKET SHARE OF NOKIA - - - - - - - - - - - - PAGE 24-25

8. FINANCIAL INFORMATIONS - - - - - - - - - - - PAGE 26-32

9. RECOMMENDATIONS - - - - - - - - - - - - - - - - PAGE 33-34

10. CONCLUSION - - - - - - - - - - - - - - - - - - - - - - - - PAGE 35

11. ACKNOWLEDGEMENTS - - - - - - - - - - - - - - - - PAGE 36

12. BIBLIOGRAPHY - - - - - - - - - - - - - - - - - - - - - - - PAGE 37

PAGE 1

NOKIA : AN INTRODUCTION

Everyone has a need to communicate and share. Nokia helps

people to fulfill this need and they help people feel close to what matters to them. They focus on providing consumers with very human technology – technology that is intuitive, a joy to use, and beautiful.

History of nokia

NOKIA’S FIRST CENTURY: 1865-1967

The first Nokia century began with Fredrik Idestam's paper mill on the banks of the Nokianvirta river. Between 1865 and 1967, the company would become a major industrial force; but it took a merger with a cable company and a rubber firm to set the new Nokia Corporation on the path to electronics...

1865: The birth of NokiaFredrik Idestam establishes a paper mill at the Tammerkoski Rapids in south-western Finland, where the Nokia story begins.

1898: Finnish Rubber Works foundedArvid Wickström founds Finnish Rubber Works, which will later become Nokia's rubber business.

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1912: Finnish Cable Works foundedEduard Polón starts Finnish Cable Works, the foundation of Nokia's cable and electronics businesses.

1937: Verner Weckman, industry heavyweightFormer Olympic wrestler Verner Weckman becomes President of Finnish Cable Works.

1960: First electronics departmentCable Works establishes its first electronics department, selling and operating computers.

1962: First in-house electrical deviceThe Cable Works electronics department produces its first in-house electrical device - a pulse analyzer for nuclear power plants.

1967: The mergerNokia Ab, Finnish Rubber Works and Finnish Cable works formally merge to create Nokia Corporation.

THE MOVE TO MOBILE: 1968-1991

The newly formed Nokia Corporation was ideally positioned for a pioneering role in the early evolution of mobile communications. As European telecommunications markets were deregulated and mobile networks became global, Nokia led the way with some iconic products...

1979: Mobira Oy, early phone makerRadio telephone company Mobira Oy begins life as a joint venture between Nokia and leading Finnish television maker Salora.

1981: The mobile era beginsNordic Mobile Telephone (NMT), the first international mobile phone network, is built.

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1982: Nokia makes its first digital telephone switchThe Nokia DX200, the company’s first digital telephone switch, goes into operation.

1984: Mobira Talkman launchedNokia launches the Mobira Talkman portable phone.

1987: Mobira Cityman – birth of a classicNokia launches the Mobira Cityman, the first handheld NMT phone.

1991: GSM – a new mobile standard opens upNokia equipment is used to make the world’s first GSM call.

MOBILE REVOLUTION: 1992-1999

In 1992, Nokia decided to focus on its telecommunications business. This was probably the most important strategic decision in its history.

As adoption of the GSM standard grew, new CEO Jorma Ollila put Nokia at the head of the mobile telephone industry’s global boom – and made it the world leader before the end of the decade...

1992: Jorma Ollila becomes President and CEOJorma Ollila becomes President and CEO of Nokia, focusing the company on telecommunications.

1992: Nokia’s first GSM handsetNokia launches its first GSM handset, the Nokia 1011.

1994: Nokia Tune is launchedNokia launches the 2100, the first phone to feature the Nokia Tune.

1994: World’s first satellite callThe world’s first satellite call is made, using a Nokia GSM handset.

1997: Snake – a classic mobile gameThe Nokia 6110 is the first phone to feature Nokia’s Snake game.

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1998: Nokia leads the worldNokia becomes the world leader in mobile phones.

1999: The Internet goes mobileNokia launches the world's first WAP handset, the Nokia 7110.

NOKIA NOW: 2000-TODAY

Nokia’s story continues with 3G, mobile multiplayer gaming, multimedia devices and a look to the future...

2002: First 3G phoneNokia launches its first 3G phone, the Nokia 6650.

2003: Nokia launches the N-GageMobile gaming goes multiplayer with the N-Gage.

2005: The Nokia Nseries is bornNokia introduces the next generation of multimedia devices, the Nokia Nseries.

2005: The billionth Nokia phone is soldNokia sells its billionth phone – a Nokia 1100 – in Nigeria. Global mobile phone subscriptions pass 2 billion.

2006: A new President and CEO – Nokia todayOlli-Pekka Kallasvuo becomes Nokia’s President and CEO; Jorma Ollila becomes Chairman of Nokia’s board. Nokia and Siemens announce plans for Nokia Siemens Networks.

2006: The birth of Nokia Eseries

The ultimate handheld communicator mobiles (Enterprise series) are launched.

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STRUCTURE OF THE COMAPANY:

Nokia comprises three business groups:

Mobile Phones connect people by providing expanding mobile voice and data capabilities across a wide range of mobile devices.

Multimedia gives people the ability to create, access, experience and share multimedia in the form of advanced mobile multimedia computers and applications with connectivity over multiple technology standards.

Enterprise Solutions offers businesses and institutions a broad range of products and solutions, including enterprise grade mobile devices, underlying security infrastructure, software and services.

Our business groups are supported by various horizontal entities:

Customer and Market Operations is responsible for sales and marketing, manufacturing and logistics, and sourcing and procurement for mobile devices from Mobile Phones, Multimedia and Enterprise Solutions.

Technology Platforms delivers leading technologies and platforms to Nokia's business groups and external customers.

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Many other Nokia-wide horizontal units drive and manage specific Nokia assets. These include Brand and Design, Developer Support, Research and Venturing, and Business Infrastructure.

Corporate functions (support Nokia's businesses with company-wide strategies and services)

Nokia Siemens Networks, which started operations on April 1, 2007, combines Nokia’s networks business and Siemens’ carrier-related operations for fixed and mobile networks into a company owned approximately 50% by each of Nokia and Siemens, and consolidated by Nokia.

MISSION OF NOKIA:

The mission of venturing activity: the renewal of Nokia.

Venturing at Nokia contributes to Nokia's renewal by identifying and developing new businesses. The Nokia Ventures Organization and the other venturing teams throughout Nokia are working on new businesses that extend beyond the scope or current focus of Nokia's core business units. Nokia is expanding their interests towards new areas, but still working within Nokia's broad vision of "Life Goes Mobile." This venturing activity triggers new developments that play a significant role in the renewal of the company.

Exploration and experimentation are at the core of venturing, and Nokia recognizes that innovation does not only happen within Nokia. Their innovation networks extend beyond the company and include research centers, academics and business partners, and entrepreneurs.

Throughout its history, Nokia has renewed its core businesses and created innovative businesses in entirely new areas. Nokia's venturing activity has created independent businesses, contributed to the growth and profit of the core businesses of Nokia, provided financial returns on investments, and has produced intangible assets and insights.

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RESEARCH AT NOKIA:

Nokia believes that effective research and development is vital to remaining competitive in the mobile communications industry. As of December 31, 2005, Nokia employed 20 882 people in research and development in 26 countries, representing approximately 36% of Nokia’s total workforce.  R&D expenses totaled EUR 3825 million in 2005,

representing 11.2% of Nokia’s net sales in 2005, compared to 12.9% of net sales in 2004.  We invest a substantial portion of our resources in research and development activities within our principal business groups, Technology Platforms, and in the Nokia Research Center.

Nokia Research Center drives Nokia's technological competitiveness and renewal in technology areas vital for the company's future success. Interacting closely with all Nokia business groups, the research center supports Nokia's evolving core businesses by:

providing expertise in strategically important areas developing new concepts, technologies and

applications developing disruptive technologies beyond the

current product horizon

Not Only 'R' But 'D'

Nokia Research Center acts as a link between basic industry research and product development - as well as responding to the product development needs of Nokia's business groups, they are also responsible for carrying out Nokia's longer-term research.

The main booster for this is our pioneering funding and operational model. About 70 per cent of our annual budget comes from selling contracted research directly to Nokia's business groups. The research center must churn out tangible results of projects for our businesses and react fast to changes in the business environment.

Our ability to react to sudden changes is developed through long-term research. Another factor in our success is our organizational culture, which consciously cultivates the innovative spirit and encourages individual initiative. At Nokia, information and people are moving constantly around the company, radiating knowledge and assisting internal benchmarking.

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Consequently, they have learned to focus on research for the future, while generating new technologies useful for the present.

Leading Research Collaboration

Nokia Research Center manages and coordinates both research cooperation and standardization for the company. Industrial cooperation in pre-competitive research and active standardization are prerequisites for a healthy mobile communications business, where only fully compatible products and services can enlarge existing markets and open up new ones.

Nokia is able to keep its soft signal antenna up through venturing and standardization as well as continual external networking with business communities, customers, product users, and a range of other stakeholders.

Wide Spectrum of Sciences

Nokia Research Center's laboratories are the backbone of the flexible R&D framework:

Software & Application Technologies laboratory

Multimedia Technologies laboratory

Computing Architectures laboratory

Networking Technologies laboratory

Radio Technologies laboratory

Operating in six countries, Nokia's corporate research unit employs nearly 1,100 staff, with one in five employees holding a PhD. The best, most knowledgeable people attract others like them and our diverse teams bring together both newcomers and distinguished experts. Our success is shown by the fact that Nokia Research Center generates half of the essential patents of the company.

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NO COMPROMISE WITH QUALITY:

Quality is at the heart of Nokia’s brand promise, very human technology.

Nokia wants their customers to know that Nokia is the best quality company in the industry.

Their goal is to have the industry’s best products and services, most loyal customers and most efficient operational mode.

Nokia believes that quality is about meeting and exceeding customer expectations. At Nokia, they view quality holistically and as an integral part of business management. The quality of products and customer experiences depends on the quality of processes, which in turn is tied to the quality of management

Nokia’s key quality targets are: For Nokia to be number one in customer and

consumer loyalty For Nokia to be number one in product

leadership For Nokia to be number one in operational

excellence

The quality and reliability of our products and services are among the most important factors driving customer satisfaction and loyalty. Designing good quality products begins with understanding customer requirements and creating the best user experience. The whole chain, from suppliers through to R&D, operations, sales and distribution to customers, impacts the end-result – everybody in the chain has a role to play in achieving quality.

Our products and customer experiences are the results of our everyday processes. Process management means finding the simplest way of operating, in order to create customer value in a lean manner. Our process thinking covers everything we do, and processes are continuously improved based on the measures and the feedback we receive from our customers.

Quality in management is vital for leveraging innovations globally and improving productivity in general. Our approach to this is platform thinking, process management and combining fact-based management with value-

PAGE 10

based leadership. We have developed a key framework for improvement at Nokia, which we call the 'Self-Regulating Management System'. It's about management practices that allow them to run their business in a consistent, effective and fact-based manner.

Commitment to quality improvement is a continuous management process. It is both a business strategy and a personal responsibility, and it is a part of Nokia’s culture and values. But at the end of the day, quality improvement is much more than something they can quantify in words or pictures. It is an attitude – a mindset. By taking quality personally they are able to deliver world-class quality to our customers. It is their source of inspiration, energy and excitement.

Take quality personally!

PRODUCTION UNITS OF NOKIA:

Networks Technology

China,Finland,India

Mobile Devices and Enhancements Brazil,China,Finland,India,Germany,UK,Hungary,Mexico,South Korea

PAGE 11

GROUP EXECUTIVE BOARD OF NOKIA:

ChairmanOlli-Pekka KallasvuoPresident and CEO of Nokia Corporation

Robert AnderssonExecutive Vice President, Customer and Market Operations

Simon Beresford-WylieChief Executive Officer, Nokia Siemens Networks

Timo IhamuotilaExecutive Vice President, Sales and Portfolio Management, Mobile Phones

Mary T. McDowellExecutive Vice President and General Manager of Enterprise Solutions

Hallstein MoerkExecutive Vice President, Human Resources

Tero OjanperaExecutive Vice President, Chief Technology Officer

Niklas SavanderExecutive Vice President, Technology Platforms as of April 1, 2006

Richard A. SimonsonExecutive Vice President, Chief Financial Officer

Veli SundbackExecutive Vice President, Corporate Relations and Responsibility of Nokia Corporation

Anssi VanjokiExecutive Vice President and General Manager of Multimedia

Dr. Kai OistamoExecutive Vice President and General Manager of Mobile Phones

PAGE 12

Determination of problem area

My survey on Nokia was specially concentrated in its

marketing strategy and its recent sales in Assam. I went to a number of dealers and customers of Guwahati, Tezpur and Nagaon district to get a clear concept about the performance of Nokia. I got almost a good response from most of the dealers and customers. Only a few dealers and customers are too busy to fill up the questionnaire. Few dealers are also not interested because of the low sale of Nokia in their outlet. I found them more interested with other mobile companies such as Spice. In case of customers, I found all the Nokia users very co-operative and helpful to me. They all are willing to see Nokia as the undisputed leader in mobile making. They helped me tremendously with their much valuable feedback and ideas. But some non-Nokia users were too much harsh and not willing to participate in the survey. But, I was helped by most of the people by and large.

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Collection of data

For this project, data have been collected by

following means from customers and dealers:

Sales data have been mostly collected from the dealers.

The survey is mainly concentrated in lower Assam as the data collection has been done in Guwahati, Tezpur and Nagaon district.

User feedback has been taken from existing Nokia users.

Nokia sales updates have been taken from Sales Executives of Nokia and Micro distributors in Nagaon and Tezpur.

Financial data have also been taken from Sales Executives.

Sales Executives also helped me to gain knowledge about existing mobile phones and upcoming phones of Nokia.

Few dealers also helped me to know more about current market trend of Nokia in Assam and in their area.

I also gathered knowledge of cell phones from books e.g. THE CELLPHONE by Heather A. Horst and Daniel Miller, MOBILE COMMUNICATIONS by Chul-Hee Kong and Jaiyung Lee etc.

Marketing knowledge has been gathered from the book MARKETING MANAGEMENT by Keller, Kotler, Koshy and Jha.

Financial information about Nokia has been gathered from www.nokia.com

Indian market strategies has been gathered from www.economictimes.com

Websites such as www.india-cellular.com and www.nokia.com provide me the knowledge about the history of Nokia.

Knowledge about the technical features of Nokia phones has been gathered from www.nokia.co.in and www.gsmarena.com

A user poll is going on in www.orkut.com in the community NOKIA INDIA PVT LTD.

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Data analysis

A data analysis has been done over the collected

data from the dealers, customers, micro-distributors, sales executives, cell phone related books and websites.

Basic multimedia handsets are not available in low price segment (around Rs. 4000) as Sony Ericsson is hampering sales in this price range by its handset K310i.

Less advertisement in local news papers about the new offers.

Non-availability of MP3 handsets in low price range.

Voice-recording memory is not much in low priced handsets whereas the S-5 model of Spice is providing it.

Poor sound quality in low priced handsets.

Too much time taken for the activation of the offer SIM cards.

Non-availability of replacement parts in the Nokia Care except those in Guwahati. So too much servicing time requires.

No brand ambassadors.

No demo sets for the dealers.

Less schemes and offers for the dealers whereas Motorola often provides handsome schemes for its dealers.

Nokia lacks attractive looks in their handsets. But, this problem is going to be solved soon as it is going to launch some lucrative phones in next few months such as 7500 Prism, 8600 Luna, N77, N76, E90, 6500 Slide, 6500 Classic, 3500 Classic etc.

Nokia is still the leader in worldwide mobile industry.

No other mobile companies can match with Nokia’s quality.

Only Nokia has extensive research facilities in every corner of world to provide better technology to its customers and the mobile industry.

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FINDINGS

The findings of the data analysis are given

below:

The market share of Nokia is found to be almost 75% here where as Spice has 9%, Motorola has 7%, Sony Ericsson and Samsung both has 4%, LG has 3% and others have 2%. So spice is hampering Nokia sales especially in low price range and

Motorola is hampering the sales somewhat by taking the advantage of the lack of attractive look in Nokia.

Now LG is producing a low cost MP3 handset without camera. So, it also steals the customers who require a low cost MP3 handset which can hold a few of their favorite music.

Almost 90% of the dealers think that they are getting less profit in Nokia than other companies. Regarding to my survey, the truth behind this fact is that there is too much Nokia dealers in the market. That’s why excessive competition lowers the selling price of Nokia in the market as there is no minimum selling price is given by the company. So in search for more profit they are selling mobiles other than Nokia.

Almost 90% of the dealers think that Nokia should have a brand ambassador.

Most of the customers and dealers think that the after sales service of Nokia is too much slow and time-taking.

Almost 50% of the dealers say that the Nokia sale falls in recent past.

Almost all the dealers want the time of price drop adjustments to be extended to 2-3 weeks at least.

Almost 60% of the dealers do not have demo sets.

Almost 75% of the dealers want more offers and schemes for them and the customers.

Almost all the dealers want an exchange sale offer.

70% of dealers think that the sale of Nokia handsets falls in the price range of Rs. 4000-8000 whereas 30% of the dealers think it to be in the price range of Rs. 1500-4000. This is because of non-availability of basic multimedia phones, poor sound quality, fewer features than its other counterparts and also very low price of Spice phones.

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MARKETING STRATEGY OF NOKIA

Nokia's strategy relies on growing, transforming, and building the

Nokia business to ensure its future success.

Nokia's Strategy in India

Nokia entered the Indian market in 1994. The first ever GSM call in India was made on a Nokia 2110 mobile phone on its own network in 1995. When Nokia entered India, the telecom policies were not conducive to the growth of the mobile phone industry.

The tariffs levied on importing mobile phones were as high as 27%, usage charges were at Rs.16 per minute and, at these high rates, consumers did not take to mobile phones. Nokia also had to face tough competition from other powerful global players like Motorola, Sony, Siemens and Ericsson...

Nokia - Made in India

In April 2005, Nokia India, a subsidiary of Finland-based Nokia, announced that it was setting up a manufacturing facility for mobile devices in Chennai, the state capital of Tamil Nadu in southern India. Nokia planned to invest US$ 100-150 million in the facility, where the production was expected to begin in the first half of 2006.

Pekka Ala-Pietilä, President and Head of Customer & Market Operations, Nokia Corporation said, “Establishing a new factory in India is an important step in the continuous development of our global manufacturing network.” India was ideal for Nokia’s new production facility. Each mobile handset has more than 400 parts and the

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average production capacity of each manufacturing unit of Nokia is around 20 million units.

This level of manufacturing involves a total of 8 billion components per annum, requiring strong logistical support. Nokia's manufacturing facility needed to be located close to a major international airport or sea port for quick supply of components. India met all these requirements, and also enjoyed cheap manpower costs and proximity to the rapidly growing Asia Pacific markets.

Besides, Nokia was the market leader in mobile communication devices in India. The company has been carrying out sales & marketing, customer care and research & development activities in the country. Nokia considers India to be one of its most important markets. The company’s Code Division Multiple Access (CDMA) facility is located in Mumbai and provides software and technical support to CDMA consumers in India and other Asia Pacific countries. In 2004, Nokia was chosen as ‘the most respected consumer durables company’ by Businessworld.

Bouncing Back

Nokia was quick to learn from its mistakes and adopted strategies to regain its lost market share. Globally, during the first quarter of 2005, the company’s sales reached 7.4 billion euros, with the company selling 54 million phones during the period. In India, Nokia continued its leadership in GSM with a market share of 74% in March 2005. Nokia also surpassed Samsung in color mobiles in the GSM segment, recording a share of 55% in the same month (Refer Table VIII for share of major mobile phone brands in the GSM segment and their market shares).

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Nokia reorganized itself at the global level in 2004. At this point, a multimedia division was formed.

The division’s Indian operations concentrated on promoting the concept of high-end telephones in smaller towns while going in for higher volumes in larger cities. The marketing division of the company concentrated on making distributors in small towns sells high-end products. Though, the distributors were skeptical to start with, by the end of 2004, the process was streamlined and the results started to show...

The Future Prospects

According to industry analysts, by 2010, the mobile phones industry in India will be driven by voice, multimedia and mobile services for organizations. The tele-density in India was estimated to increase to 18.2% by March 2009, with mobile subscription rising to 148.77 million by that time. In many instances, the cell phone has become the only basic telephone link of a household/enterprise in India, rather than a landline phone. It was turning out to be more economical and efficient than fixed line telephones. So, there was great scope for further expansion with reduction in the cost of ownership...

Wieden+Kennedy chosen as the lead strategic and creative agency for Nokia's mobile phones

Wieden+Kennedy (W+K) has recently been appointed as the global lead agency for Mobile Phones group in Nokia. W+K will act as the strategic global driving creative excellence across Mobile Phones' marketing, and will be responsible for the creation and development of all global campaigns.

Mobile Phones marketing are currently changing its mode of operation with a focus on planning and increasing the effectiveness and efficiency of all marketing activities. The agency review has been an integral part of the marketing change process.

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A strong emphasis to choose an agency that is best positioned to support the Mobile Phones strategy and business requirements over time were key to the selection process. Additionally, a diverse repertoire of knowledge and experience was a key priority.

"Wieden and Kennedy's track record demonstrated strength in creative thinking and the potential to be a strong strategic and business marketing advisor with a solid commitment to Nokia's business priorities and amibitions. We expect this relationship to help take us to our goal of becoming the most loved and admired iconic brand", says Jo Harlow, Senior Vice President, Marketing, Mobile Phones, Nokia.

W+K will begin working on marketing projects in the fall, with full execution beginning on January 1, 2008.

Why Nokia is No. 1 in India, China

It wasn't hard for Wang Ninie to decide on a mobile phone. In early March the twenty-something Beijing entrepreneur saw a golden Nokia handset with a flower pattern etched into the trim, one of the company's 'L'Amour' line of high-end designer phones.

"I fell in love with it," she says. At $470, the phone wasn't cheap, and she had to wait a few hours for delivery since the shop didn't have one in stock. No matter. Wang knew she had to have it. "I didn't even look at other phones," says Wang, who has recommended the handset to friends.

Jeevanlal Pitodia is equally smitten with Nokia. The 27-year-old Bombay (Mumbai) fruit vendor used to spend his days pounding the pavement in the city's alleys, hawking oranges, apples, and bananas.

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Last September, Pitodia ponied up $56 for his first handset, a simple but sturdy Nokia 1100. Now he sits under a colorful beach umbrella, earning as much as $10 a day taking orders by phone for both him and nearby vendors.

"I tried many phones, but Nokia is the most user-friendly," says Pitodia. "I am the only one in the footpath with a mobile," he says proudly.

More than any other handset maker, Nokia Corp. has connected with the likes of Wang and Pitodia and their billions of countrymen. In both China and India, the Finnish company is the top brand.

In China last year, it had nearly 31% of a crowded market, well ahead of the 10% controlled by No. 2 Motorola Inc. Nokia's sales in Greater China (the mainland, Hong Kong, and Taiwan) jumped by 28%, to $4.5 billion.

The region today is the company's biggest market, accounting for 11% of global revenues, compared with 8% in the U.S. In India, Nokia has a 60% share, with sales last year of about $1 billion. By 2010 the company expects India to be its No. 2 market.

Nokia isn't letting up: On Mar. 11 it opened its first Indian factory, a $150 million facility near the southern city of Madras (Chennai) that will turn out as many as 20 million inexpensive phones annually both for the local market and

for export. And the company is doubling the size of its plant in the Chinese city of Dongguan, near Hong Kong.

The two Asian giants are of fundamental importance for Nokia. The Finnish company has played catch-up in the U.S., where Motorola has beaten it with hot-selling models such as the ultra-thin RAZR. But the U.S. market is nearly saturated.

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The company that can control Asia's Big Two will have a lead in the global handset wars. Today, China is the world's No. 1 cellular market, with some 400 million users and growth last year of 20%. While India is far smaller, with just 81 million users in February, handset sales are expected to double this year and total users could hit 500 million by 2010.

"China and India are critical to Nokia's overall strategy and they can only get more important," says Neil Mawston, associate director of consultancy Strategy Analytics.

Caught off guard

Just a few years ago, Nokia faced big troubles in both countries. In India, growth was sluggish. Nokia was an early mover -- the country's first cell-phone call was made on one of its handsets -- but regulation hindered expansion.

In China, Nokia not only trailed Motorola but was threatened by ascendant domestic players such as TCL and Ningbo Bird, newcomers to the business that had quickly gobbled up almost half of the market with their inexpensive but well-designed handsets.

The Finns "were caught off guard by the rise of the domestic vendors," says Ted Dean, managing director at BDA China Ltd., a Beijing consulting firm. "Suddenly, Nokia was struggling."

To fight back, Giles pushed through big changes. Nokia decentralized, going from three Chinese sales offices in 2003 to 70 today. Instead of eight national distributors, Nokia now has 50 provincial ones.

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And since rivals were having great success with handsets designed for mainland users, Nokia introduced its own China-specific models. For instance, since many rural Chinese aren't familiar with the Romanized transliteration system that most cell phones use to input Chinese for text messages, Nokia developed two phones with software that lets them write characters with a stylus.

And Nokia invested in new computer systems that provide detailed sales data. "Tomorrow, I will be able to tell you what happened today in the top 4,500 outlets," Giles boasts. "In a week's time, I will be able to tell you about 30,000 outlets." The result: Nokia sold 27.5 million handsets in China last year, triple what it sold in 2003. Now, the company is planning for the launch of 3G in China, expected this year.

Since 2002, when India's cellular market took off, Nokia has drawn on its China experience to consolidate its lead. In 2004 the company launched two India-specific models, which included a flashlight, dust cover, and slip-free grip (handy during India's scorching, sweaty summers).

Nokia introduced software in seven regional languages for non-Hindi speakers and added ring-tones of patriotic songs such as the nationalist hymn India Is the Best. And the company's marketers pitched the phones through ads tailored to India, with one early campaign showing burly truck drivers calling home on Nokia handsets.

"We invested when the market was nothing," says Robert Andersson, who oversees manufacturing, sales, and marketing at Nokia. "We have been able to harvest the fruits of that commitment in the last four years."

Fierce rivals

Nokia has also reaped the fruits of rivals' missteps. Motorola was slower in reacting to the threat from the Chinese locals and has had a tougher time bouncing back. "Motorola didn't change its strategy for a long time," says Chris Han, an analyst in Beijing at Norson Telecom Consulting.

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The Chinese upstarts, meanwhile, have suffered sharp reversals due to disappointing quality. In India, Motorola didn't focus on the market early enough, says Pankaj Mohindroo, president of the Indian Cellular Assn., a trade group. Today its share there is just 5% or so.

Rivals say the time is right to eat into Nokia's lead. Samsung in the past focused solely on the middle to high end of the market in India but began selling lower-cost phones last year. And on Mar. 7 the Korean company opened a new factory in Gurgaon, near Delhi.

Motorola has revamped its structure in China, expanding its sales force and strengthening its distribution network to cover 300 cities. By February, Motorola had boosted its market share by several percentage points.

"We've done a lot of the blocking and tackling," says Michael Tatelman, Motorola's China chief. And in India, Motorola is planning to market phones costing as little as $35. Motorola Vice-President Allen Burnes calls India "pivotal" and says the company will open its first factory there in 18 months. Of course, that's 18 months behind Nokia, giving the Finns another opportunity to solidify their lead in Asia's Big Two.

Focused Mobile Marketing

The Nokia Local Marketing Solution is a unique solution providing significant benefits for the service operator. It offers an interesting and competitive alternative to marketing both owned and partnered cellular and non-cellular services. With the solution, the mobile operator can boost usage of existing service and create new business by providing advertising space for local business owners.

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MARKET SHARE OF NOKIA

Nokia owns 79% of the GSM market share in India

Finnish handset major Nokia has retained the top slot in Indian GSM market

with 79 per cent share, while US giant Motorola has more than doubled its share to seven per cent this year, according to a study.

Motorola has been able to significantly improve its share by to seven per cent this year from three per cent in 2005, according to the latest annual TNS CellTrack 2006 study.

It said the US company’s gain was possibly the loss of South Korean handset maker Samsung, whose market share dropped to four per cent in 2006 from six per cent a year ago.

In the CDMA market, LG has consolidated its position as the market leader with 49 per cent market share this year against 43 per cent in 2005, the study said.

While Nokia managed to retain its share in CDMA handsets, Samsung and Motorola lost market share from 17 per cent to 8 per cent and 12 per cent to 4 per cent respectively.

In Assam

The market share of Nokia is found to be almost 75% here where as Spice has 9%, Motorola has 7%, Sony Ericsson and Samsung both have 4%, LG has 3% and others have 2%. Spice is lowering Nokia sales especially in low price segment and its arch rival Motorola is hampering the sales somewhat by taking advantage of the lack of attractive look in Nokia.

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NOKIA IN WORLD MARKET

India is Nokia’s 3rd largest market in terms of mobile phone sales whereas China and United states occupying 1st and 2nd place respectively.

10 major markets, net sales

2006 EURm 2005 EURm2004 EURm

China 4913 3403 2678

USA 2815 2743 3430

India 2713 2022 1369

UK 2425 2405 2269

Germany 2060 1982 1730

Russia 1518 1410 946

Italy 1394 1160 884

Spain 1139 923 768

Indonesia 1069 727 ------

Brazil 1044 614 ------

PAGE 26

FINANCIAL INFORMATIONS

Nokia reports Q1 2007 net sales of EUR 9.9 billion and EPS of EUR 0.25

Profitability strong for the quarter - driven by a sequential increase in gross margin

NOKIA IN THE FIRST QUARTER 2007

EUR million Q1/2007* Q1/2006**Change

%

Net sales 9 856 9 507 4

  Mobile Phones 5 583 5 869 -5

  Multimedia 2 252 1 758 28

  Enterprise Solutions 326 186 75

  Networks 1 697 1 699 0

Operating profit 1 272 1 367 -7

  Mobile Phones 936 1 085 -14

  Multimedia 424 323 31

  Enterprise Solutions -38 -66  

  Networks 78 149 -48

  Common Group Expenses -128 -124  

Operating margin (%) 12.9 14.4  

  Mobile Phones (%) 16.8 18.5  

  Multimedia (%) 18.8 18.4  

  Enterprise Solutions (%) -11.7 -35.5  

  Networks (%) 4.6 8.8  

Net profit 979 1 048 -7

EPS, EUR      

  Basic 0.25 0.25  

  Diluted 0.25 0.25  

PAGE 27

FIRST QUARTER 2007 HIGHLIGHTS Estimated industry device volumes of 253 million units, down

13% sequentially and up 18% year on year. Nokia device volumes of 91.1 million units, down 14%

sequentially and up 21% year on year. Nokia estimated device market share 36%, at the same level as

Q4 2006 and up from 35% in Q1 2006. Nokia device ASP of EUR 89, at the same level as Q4 2006. Nokia gross margin of 33.1%, up sequentially from 32.4% in Q4

2006. Nokia operating margin of 13.6%, up sequentially from 13.3%

in Q4 2006, excluding special items. Nokia diluted EPS of EUR 0.26 excluding special items. Nokia operating cash flow of EUR 1.6 billion. Multimedia and Enterprise Solutions net sales strong, up

sequentially from Q4 2006. Key products started shipping: Nokia 6300, Nokia N95 and

Nokia E65.

INDUSTRY AND NOKIA OUTLOOK FOR THE SECOND QUARTER AND FULL YEAR 2007

Nokia expects industry mobile device volumes in the second quarter 2007 to be slightly up sequentially.

We expect Nokia's device market share in the second quarter 2007 to be approximately at the same level sequentially.

Nokia continues to expect industry mobile device volumes in 2007 to grow by up to 10% from the approximately 978 million units Nokia estimates for 2006.

Nokia continues to expect the device industry to experience value growth in 2007, but expects some decline in industry ASPs, primarily reflecting the increasing impact of the emerging markets and competitive factors in general.

Nokia continues to target an increase in its market share in mobile devices in 2007.

Nokia continues to expect very slight market growth for the mobile and fixed infrastructure and related services market in euro terms in 2007.

PAGE 28

Nokia Group

Nokia's first quarter 2007 net sales increased 4% to EUR 9.9 billion, compared with EUR 9.5 billion in the first quarter 2006. At constant currency, group net sales would have increased 6%.

Nokia's first quarter 2007 operating profit decreased 7% to EUR 1 272 million (including the negative impact of EUR 69 million in special items), compared with EUR 1 367 million in the first quarter 2006 (including the negative impact of EUR 22 million in special items). Nokia's first quarter 2007 operating margin was 12.9% (14.4%) including the impact of the respective special items, and 13.6% (14.6%) excluding the special items.

Mobile devices

In the first quarter 2007, the total mobile device volume achieved by our Mobile Phones, Multimedia and Enterprise Solutions business groups reached 91.1 million units, representing 21% year on year growth and a 14% sequential decrease. The overall industry volume for the same period reached an estimated 253 million units, representing 18% year on year growth and a 13% sequential decrease.

Converged device industry volumes increased to an estimated 23.5 million units, compared with an estimated 17 million units in the first quarter 2006. Nokia's own converged device volumes rose to 11.8 million units, compared with 8.5 million units in the first quarter 2006. Nokia shipped close to eight million Nokia Nseries and more than one million Nokia Eseries devices during the first quarter 2007.

The following chart sets out Nokia's mobile device volumes for the periods indicated, as well as the year on year and sequential growth rates by geographic area.

NOKIA MOBILE DEVICE VOLUME BY GEOGRAPHIC AREA

(million

units)

Q1 2007

Q1 2006

YoYChange (

%)

Q4 200

6

QoQ Change (

%)

Europe23.

920.

417.7 33.3 -28.3

Middle East & Africa

15.7

11.9

31.8 15.5 1.3

China15.

710.

943.4 14.6 7.8

Asia-Pacific

23.7

16.4

44.7 23.7 0.3

North 4.8 8.4 -42.5 5.9 -19.0

America

Latin Americ

a7.3 7.1 2.4 12.5 -41.8

Total91.

175.

121.4

105.5

-13.7

PAGE 29

Based on Nokia’s preliminary market estimate, Nokia's market share for the first quarter 2007 was 36%, compared with 35% in the first quarter 2006 and 36% in the fourth quarter 2006. Nokia's year on year market share increase was driven primarily by strong gains in Asia-Pacific and Europe that more than offset a significant market share decline in North America. Year on year market share was approximately at the same level in China, Latin America and Middle East & Africa. Sequentially, Nokia's market share was approximately at the same level as in fourth quarter 2006, globally as well as in each geographic area. The sequential decline in first quarter industry volumes was similar to previous years, however they believe there has been an impact in the market from the excess inventory of certain of their competitors' products.

Nokia's average selling price in the first quarter 2007 was EUR 89, down from EUR 103 in the first quarter 2006 and at the same level as in the fourth quarter 2006. The lower year on year ASP in the first quarter 2007 was primarily the result of a significantly higher proportion of entry-level device sales, where the industry growth especially in the emerging markets has been strong and where Nokia's share has been growing. In addition, certain ageing higher end products in their portfolio were viewed as less competitive in various markets. Sequentially, first quarter 2007 ASPs were impacted by a higher percentage of entry-level device sales. That sequential development was offset by strong sales of our higher ASP devices, particularly from the Multimedia business group.

Business Groups

Mobile Phones: First quarter 2007 net sales decreased 5% to EUR 5.6 billion, compared with EUR 5.9 billion in the first quarter 2006. Strong overall volume growth was not enough to offset a significant ASP decline year on year, driven primarily by a higher proportion of entry-level sales. Net sales decreased in all regions except Asia-Pacific. Net sales were down significantly in North America and to a lesser degree in Latin America, Middle East & Africa, Europe and China.

Mobile Phones reported operating profit in the first quarter 2007 decreased 14% to EUR 936 million, compared with EUR 1.1 billion in the first quarter 2006, with an operating margin of 16.8% (18.5%). Reported first quarter 2007 operating profit included total charges of EUR 35 million, of which EUR 25

million was related to the restructuring of a subsidiary company and EUR 10 million was mainly related to restructuring in Customer and Market Operations. First quarter 2006 reported operating profit included a EUR 14 million initial restructuring charge for the CDMA business. Operating profit for the first quarter 2007 excluding the charges was EUR 971 million, with an operating margin of 17.4% (18.7%). The decrease in operating profit for the first quarter 2007, excluding the special items, was primarily caused by lower sales of higher end, higher margin devices, and an increase in sales and marketing expenses, compared to the first quarter 2006.

PAGE 30

Multimedia: First quarter 2007 net sales increased 28% to EUR 2.3 billion, compared with EUR 1.8 billion in the first quarter 2006. Net sales increased year on year in all regions except North America, where net sales continued at a low level. Multimedia net sales year on year growth was fastest in Latin America and China. Net sales growth was driven by high volumes of Nokia Nseries multimedia computers, especially the Nokia N73 and Nokia N70, combined with a stable ASP year on year.

Multimedia reported operating profit in the first quarter 2007 grew 31% to EUR 424 million, compared with EUR 323 million in the first quarter 2006, with an operating margin of 18.8% (18.4%). Reported first quarter 2007 operating profit in Multimedia included restructuring charges of EUR 3 million. Operating profit for the first quarter 2007 excluding these charges was EUR 427 million, with an operating margin of 18.7%. Operating profit growth in the first quarter 2007 was driven by strong net sales growth and effective operating cost control, compared to the first quarter 2006.

Enterprise Solutions: First quarter 2007 net sales increased 75% to EUR 326 million, compared with EUR 186 million in the first quarter 2006. Net sales increased year on year in all regions except North America and China, where

net sales decreased. Enterprise Solutions net sales more than doubled year on year in Europe, Latin America and Asia-Pacific. Net sales were positively impacted by strong year on year volume growth of the Nokia Eseries.

In the first quarter 2007, Enterprise Solutions had a reported operating loss of EUR 38 million, compared with a reported operating loss of EUR 66 million in the first quarter 2006. The reported first quarter 2007 operating loss included restructuring charges of EUR 17 million. Excluding these charges, the operating loss for the first quarter 2007 was EUR 21 million. The reported first quarter 2006 operating loss included a EUR 8 million restructuring charge. The significantly improved operating performance for the first quarter 2007, excluding these charges, reflected strong net sales growth and effective operating cost control compared to the first quarter 2006.

PAGE 31

Q1 2007 OPERATING HIGHLIGHTS

Mobile Phones

First shipments of the slim and stylish Nokia 6300. Announcement of the Nokia 6110 Navigator, an HSDPA (High

Speed Downlink Packet Access) device with GPS (Global Positioning System) and AGPS (Assisted Global Positioning System).

Announcement of the Nokia 6131 NFC phone, the world's first fully integrated, commercial NFC (Near Field Communications) handset. It enables information sharing, service initiation, and payment and ticketing capability with a single tap of the device.

Expansion of Nokia's music phone offering with the Nokia 5700 XpressMusic (a 3G converged device with a dedicated audio chip, iconic twist design, music player, 2 megapixel camera and video calling), and the Nokia 5070 (with integrated FM radio, a VGA camera, pre-installed java games and a built in web browser).

The enhancement of the popular L'Amour collection with the introduction of the Nokia 7373 Special Edition in two contemporary colors paired with signature Giambattista Valli phone accessories; and the first CDMA model in the L'Amour Collection, the Nokia 7088.

Introduction of the Nokia 3110 classic, a triband GSM phone in a robust and durable design with a 1.3 megapixel camera, music player with expandable memory, and an FM stereo radio.

Multimedia Product launches included the Nokia N76, Nokia N93i, Nokia N77

and Nokia N800 multimedia computers, including features such as DVB-H for mobile TV, DVD like-quality video, music players and touch screen functionality.

First shipments of the Nokia N95, featuring connectivity over GPS, HSDPA and WLAN.

Nokia announced new games, publishers and developers for its new N-Gage mobile gaming platform. These new developments will help to bring connected mobile gaming experiences to millions of Nokia mobile device owners worldwide starting in September 2007.

Nokia announced cooperation with YouTube that allows people to enjoy YouTube videos on the go via Nokia Nseries devices. Nokia also announced cooperation with Six Apart to make it easy for people to upload video and photos, and update their blogs directly from their compatible Nokia Nseries devices to the Vox blogging service.

PAGE 32

Enterprise Solutions Second generation Nokia Eseries products - Nokia E61i, Nokia E65

and Nokia E90 Communicator - were launched at the 3GSM World Congress in February.

The launch of Intellisync Mobile Suite 8.0, the first major update to the Intellisync platform since the Intellisync acquisition, with several major feature and performance enhancements including a powerful new email experience for S60 devices.

PAGE 33

RECOMMENDATIONS

After completing my survey, I would like to recommend a

few things to Nokia to regain its previous market share especially in Assam. Those recommendations are discussed below:

I. Nokia should produce a basic multimedia handset (around Rs. 4000) to get the customers of Sony Ericsson K310i.

II. Nokia should provide demo sets to all of its dealers.III. There should be more advertisements in local news papers and FM

radio channels about the new offers.IV. Nokia should produce a MP3 handset at low segment (around

Rs.3000) without camera and with at least a memory of 128 mb. This will definitely increase Nokia sales in low segment tremendously.

V. Nokia should provide more memory for voice recording in low price segment.

VI. Nokia should produce more handsets with fine attractive looks to fight with its arch rivals, Motorola and Samsung. (Handsets like 8800, 7500 Prism, 8600 Luna, N76, N95, 6500 Classic etc.)

VII. Nokia can produce a handset less than Rs.1000 or around Rs.1000. But, there may be problem with quality if it lowers the price this much. But, there is a easy solution for this problem. Let us see the example: Let a Nokia handset model XXXX has a manufacturing cost of Rs.1400. If they sale it at Rs.1000, then there is a loss of Rs.400. But, this loss can be covered by taking some extra money from the customers who buy a handset of more than Rs.10000 or 15000. So, in this way Nokia can provide better quality in low price than its other competitors. Automatically Nokia sale will increase.

VIII. Nokia can think over about the matter of an exchange offer to regain its old customers.

PAGE 34

IX. Nokia should provide better and clearer sound quality in low price segment.

X. After sales service should be improved. It should be more prompt. Replacement parts should always be available in all Nokia Cares, not only the ones in Guwahati.

XI. Nokia should provide special offers for the staffs of Nokia Priority Dealer depending on the sale of their outlet.

XII. Stock handsets which are having problem should be replaced to dealers quickly.

XIII. A dealer in Nagaon gets a Nokia 1110 without battery and one gets an empty N73 pack. So packing and delivering of products should be done under proper and strict vigilance.

XIV. Nokia sales has fallen in recent days because most the dealers are not willing to sale Nokia handsets as they are getting much profit in other company’s phones. This is because of too much competition in the market. Nokia dealers are allowed to sell the handsets right at the dealer price. So for the sake of competition they are lessening the prices very near to the dealer price. So Nokia should give a minimum price outline to the dealers such as selling price = dealer price + 3%-5%, so that the dealers can have a handsome margin after selling Nokia. If this can be done by the company then I think automatically dealers will sell Nokia phones more than other phones to make a good profit. This will also stabilize the market price.

XV. Most of the dealers want the price drop cover to be increased. Now-a-days, it is one week. Nokia can think over this matter and it can be increased to two or three weeks if possible.

XVI. And finally, Nokia should endorse a brand ambassador. Most of the people think a bollywood celebrity would be appropriate for it. Otherwise in Assam, the Music edition and Xpress Music phones of Nokia can be advertised by a well-known local music celebrity e.g.

Zubeen Garg. This type of advertisements will definitely boost the sale.

XVII. Most of the people think that the Nokia Eseries phones are not getting sufficient advertisement. The company should think over it as it is launching some high-end ultimate communicator devices like E90 in this segment.

PAGE 35

conclusion

After my survey, I have reached the conclusion that the sale

of Nokia has fallen in Assam in recent days. Previously, the market share for Nokia was around 85%. But, now it is almost 75%. The downfall is occurring because of some of the Spice phones and very high competitive market. The market price is also not stable. The company has to think over this matter to

regain its market share. Keeping an eye on the feedback of customers and dealers, I have also recommended a few things in previous pages.

PAGE 36

ACKNOWLEDGEMENTS

I am very grateful to following persons who helped me enormously in this project. Without their assistance it would have been impossible for me to complete my work. Heartiest thanks to all of the following persons:

Mr. Amit Kundu, Nokia Sales Manager (Lower Assam)

Mr. Arnab Choudhury, Nokia Sales Manager (Upper Assam)

Mr. Neelav Nath Dutta, Multimedia Sales In-charge (Nokia, RDS-level)

Mr. Pankaj Sharma (Prop. Shree Marketing, Nagaon)

Mr. Aparup Bordoloi, Nokia Sales Executive (Nagaon)

PAGE 37

BIBLIOGRAPHY

For this project, I have collected knowledge and data from the following books and websites:

www.nokia.com www.gsmarena.com www.economictimes.com www.india-cellular.com www.minformation.com Mobile Communications by Chul-Hee Kang and

Jaiyung Lee The Cellphone by Heather A. Horst and Daniel

Miller Marketing Management by Keller, Kotler, Koshy

and Jha The Businessworld The Hindu