India holds the distinctionIndia holds the distinctionof being the secondof being the second

largest marketlargest marketfor the company globallyfor the company globally

Nokia startedNokia startedits its

India operations in 1995India operations in 1995

Competitive Competitive ContextContextA frame workA frame work

Customers Competitors

Industry dynamics

Technology Change

Productchange

Valuechain change

Lead CustomersLead Customers

Nokia targets billion customers in rural India and sells products through distributors, network operators and Nokia branded stores.

It has wide variety of handsets to meet the requirements of every segment.

Lead CustomersLead CustomersHow well are they currently servedHow well are they currently served

Research & Surveys carried out twice a year.

Provides support services through online, email and call center services.

Various effective feedback channels

Customer segmentationCustomer segmentation

• Nokia 1100• Targeting rural customers

• Nokia 7610• Targeting middle segment

• Nokia N-series• Upper middle segment

• Nokia E90 Communicator

Reaching Reaching CustomersCustomers

• Nokia Priority Dealers• Nokia Concept Store• Market making & category creation in small towns• Nokia VAN Operations• Widest Care Network • 18 X 7 Access to Nokia Care line

Needs & RequirementsNeeds & RequirementsShiftingShifting

• Multiple applications in a single mobile device and consumers are willing to pay for them

• A device should reflect customer’s personality

• Affordable, Accessible, Functional, Creative phone Device and applications

Major CompetitorsMajor Competitors

Emerging CompetitorsEmerging Competitors

Market ShareMarket Share

Evaluating Evaluating CompetitorsCompetitors

Sony EricssonSamsungL.G.

Great quality music-Walkman series

Superb Picture quality

-Cyber shot

Product lacks innovation

Superior display quality

Costly

Less durable

Capturing GSM market

High end internal Features.

StrategyStrategyWinning Rural marketWinning Rural market

Started rural van project, 2 years backShowcase solutions, use of mobile

technologyNine regional language supportNokia life tools - Agriculture, EducationTie ups with various organizations

* MSAMB * Reuters market light * Madison research * Various NGO’s

Competitive Competitive Space for NokiaSpace for Nokia

• Diverse product portfolio• Entry level, first time subscribers• Advanced business devices• High performance multimedia devices• Strong distribution network• Convergence of internet and mobility

Key ShiftsKey Shifts

• Fast growing smartphone market• Increased focus on services• Newer, richer features at attractive price points • Feature-rich (full QWERTY keyboard) and application-rich (IM-enabled) mobile handsets • Growing attention towards CDMA

Industry Industry outlookoutlook3-5 years3-5 years

• Number of high-end mobile phone users will grow five times in the next three years

• Size of the handset market in India will increase to 150 million in 2010-11 from 130 million last fiscal

• Size of data service-enabled phones would touch 25 million in three years from five million in 2008-09

• Demand for feature-rich handsets selling at a price range of Rs 5,000 to Rs 12,000 will continue to grow

Source : Business Standard (Nov 27, 2009)

Product Product SolutionSolutionSpaceSpace

We offer products, services and solutions that connect communities, help realize potential, entertain and celebrate people’s lives Together we can explore these possibilities and come together to help define and drive the future of our industry Nokia's business groups are supported by various horizontal entities which adds to its efficiency

PRODUCTS & SERVICES

MOBILE PHONES MULTIMEDIA NETWORKENTERPRISE

SOLUTION

First mobile phone call

Saare Jahaan Se

Acchha, first Indian

ringtone

First Camera phone (Nokia

7650)

First phone with Hindi

menu (Nokia 3210)

Nokia manufacturing

plant in Chennai

Saral Mobile Sandesh, Hindi SMS on a wide range of Nokia

phones

First Made for India phone,

Nokia 1100

Local UI in additional

local language

First vernacular

news portal

1995 19982000

20022003

2004

20052006

2007

• Pocket tablet• Modem• Computers with

intel - technology• 4G phones

Product Space, Product Space, three to five yearsthree to five years

TechnologyTechnology

Where is Nokia,in

terms oftechnology...

Decoding Decoding Technology...Technology...

Affect of key technologies Change is constant Future tech Need & demand Cause and effect Building strategy

Key Key TechnologyTechnology

WiFi capabilityWiFi capability

Internet/ Data Internet/ Data flexibilityflexibility

SecuritySecurity

Long battery lifeLong battery life

High screen High screen resolutionresolution

User friendlyUser friendly

Change is constantChange is constant

First GenFirst Gen

1983, Motorola, 1983, Motorola, AnalogAnalog

Second GenSecond Gen

1990, Digital1990, Digital

Third GenThird Gen

Currently, Data/ VOIPCurrently, Data/ VOIP

Fourth GenFourth Gen

......

The 4th The 4th Generation...Generation...

QuickTime™ and a decompressor

are needed to see this picture.

Need and demandNeed and demand

Old Rivals

Motorola launched the first generation phones

Nokia, second generation a potential market.

New Rivals

O2, Iphone and Android

New models, Symbian based, modern capabilities.

End UsersEnd Users

Normal UsersNormal Users

Flaunt FreaksFlaunt Freaks

High-end Users

Alpha Geeks

Target Segment

Building StrategyBuilding Strategy

Need for new product or product diversificationNot at least for coming 2 years

ValueHigh end technology, User friendly GUI, Value for money

Dealing with competitionSTP, Traditional customer base, emerging as a service provider

Keep the customer IlliterateToo much of information is harmful

Insight...Insight...

Target

Middle class

We love technology

Over complicated, makes us afraid

We like innovations

Cellphone - a mega trend not a fad

We are buying a mobile phone not “Gold”

SWOT

S• High market share-70%• Brand name• Manufacturing plant • R&D

W• Bad service center• Sound quality & camera options

O• Market growth• Future technology

SO:• Market growth & share• Innovation• Market share & profitability

WO:• May lose market share• Concentration on technology

T• Changing technology• Increased competition• Less CDMA mobiles

ST:• Expectations is more• Should concentrate on CDMA mobiles

WT:• Should improve the services to compete with competitors

Insight...Insight...

Customers

Rural customers feel, Customer loyalty in urban areas

Competitors

Key competitor - Apple Iphone

Product

Indians prefer simplicity

Technology

Advanced Products

Industry

Competitive era - need for constant innovation

Current Market Place Current Market Place StrategyStrategy

An Internet services driven firm

Establishing crucial distribution partnership

Early investments in manufacturing and brand-building

Developing innovative product features

Future Market Place Future Market Place StrategyStrategy

Increase the market share

Device to device plus service solution

Breaking into rural markets

Nokia “LIFE” tools

“Obopay” mobile payment services

ScenariosScenarios

Scenario 1Focus more

onrural customers

Scenario 2Application

basedmobile phones

Scenario 3CDMA

mobile phones

Scenario 4Concentrate

ontechnology

Scenario 1Scenario 1

Threats

• Losing out on high end customers• Competitors coming up with much cheaper handsets

Opportunities

• Large consumer base• A growing segment• Cost efficient handsets can be made

StrategyStrategy

• The company is planning to Nokia life tools, which would benefit farmers in rural areas in 11 states.

• Farmers and students can get relevant local information on seeds, crops market and weather through SMS.

• Educational services-Users can opt for an English word a day and learn how it is pronounced and its meaning in its native languages

Scenario 2Scenario 2

• Opportunities• Strong base with already popular existing applications from ‘ovi’• Stable and fast operating system to support technology

• THREATS• Apple iphone has better applications• Indian consumers are not much technology savvy• Microsoft coming up with “Bazaar”

StrategyStrategy

• To inform consumers about ‘Ovi’• Developing handsets supporting

more applications

Scenario 3Scenario 3CDMA technologyCDMA technology

• OPPORTUNITIES• Indian markets will appreciate CDMA because of its better

cellular communication security as India faces terror attacks.

• CDMA will attract huge rural market because of its extended reach and lower power requirements.

• THREATS• Strong GSM Brands handsets with competitive prices and

competitive plans by GSM service providers.• Few CDMA service providers.• Switching to different service provider is not possible and

upgrading of handset is also not easy as compared to GSM sets.

• CDMA Handsets are more sensitive and costlier.

StrategiesStrategies

• DUAL SIM PHONES WITH CDMA AND GSM TECHNOLOGIES.

• NOKIA MUST DEVELOP ECONOMICAL CDMA HANDSETS.

Scenario 4Scenario 4Concentrate on technologyConcentrate on technology

Opportunity

In 2002, more than 19,000 people worked in R&D centers in 14 countries.

Today, Nokia has the leading technology in GSM of the world.

Strategies/ Operations

Mobile phone is not only a “phone”

It should include all the functions that brings the mobile phone closer to a PC

Action plan

As technology develops, the status of function values increases constantly. What are the new functions made? How to produce mobile phones that can excite and attract the customer?

Strategic choicesStrategic choices

Customer FocusCustomer Focus•Optimal product portfolio offering per category•Diving into new areas retaining the understanding for the consumer segments

Winning propositionWinning proposition•Breaking into rural markets•Providing solutions and not just devices

Setting key prioritiesSetting key priorities•Utilize the already established and strong distribution network to penetrate deeper into untapped markets

Invest in technology to come up with more tech-savvy products for the consumers ahead of competition

FinancialsFinancials

NET SALES BY GEOGRAPHICAL AREA (million units)

Asia-Pacific

Q3/2009 30.5Q3/2008 33.6YoY -9.2%