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Study of nokia’s sudden partnership with microsoftAnalysis of the loss of market share by Nokia on the basis of market share, market segment, and average pricesAlso given advice to major players, on where to focus to capture a slice of this pie
Announcement to discontinue Symbian (OS) and Meego , a new modernized OS being developed by nokia in association of IntelAnd go ahead with Windows Phone 7 series, i.e. WP7 as the new OS for nokia phonesSelf-defeating prophecy
Dumphones - A cellphone which has little or no advanced features such as a large, bright screen orapplications such as e-mail and web browsing.Smartphones - A high - end mobile phone which combines the functions of a personal digital assistant (PDA)and a mobile phone. The term is used to generally describe phones with more advancedcomputing ability and connectivity.Eco – System - In general, an eco-system is a set of components where they interact with each other tomutually benefit each other. In terms, of the cell phone industry, the eco-system refers to thesystem in which the company, its application developers, its application store and itsrelationship with varios carriers work together with each other, with a view to aid each other.Market Share - Market share is the portion or percentage of sales/revenue of a particular product or service ina given region controlled by a company.Windfall - A windfall gain (or windfall profit) is any type of income that is unexpected. It refers to incomereceived which was not expected and not a direct result of something the recipient did.
Rationale behaviour of the consumers during the purchase No dramatic fluctuations in the ASP of the phonesCompanies follow the same policies that have been established in the past Distribution of Windfall assumed on the basis of current Market share and ASPThe effect of this deal on the industry is considered on the basis of the assumed hybrid model of forecasts which reflects a combination of the market share and the ASP; with a particular weight being given to each competitor depending on its presence and its perception in the regional market.
The foremost limitation of the forecast is that it is based on historic data and cannot be used for future predictions.Future behaviour of the company with respect to its ecosystem cannot be predictedThe revenues of Nokia are forecasted solely on the basis of their handset division
Some other variables suchas mobile operating system and design, ease of use, perception of loss in social status, relationship withthe carriers, perception of the brand, alternative brand’s reputation, image and service quality accordingto the customer’s perception have not been considered here since their significance as variables in thestudy of customer loyalty has been proved to be of low significance
Nokia was a market leader prior to the deal, however, it is predicted to fallmuch below amonst the ranks of its competitors. This in turn, has created tremendous marketopportunities for other players in the industry in order to capitalize on this collapse and gain themaximum possible windfall.
Study of the Nokia - Microsoft Deal (Research Project)
Research Paper – I
Study & Analysis of the
Nokia – Microsoft deal
MBA (Tech.) – Div . C
Roll No. #315
• The main objective is to study the implications
of the Nokia – Microsoft deal on Nokia, as well
the cell phone industry as a whole
• Generic with product
• Leader in innovations
• Pioneer in cell phones
• Empire at one point
(in the 3rd quarter of 2010, the sales of Nokia
were greater than that of the combined total of
Apple & Samsung!)
Nokia - Microsoft Alliance
• Announcement in February 2011.
Significance and Need For Study
“Complete game – changing deal”
• Enormous loss of sales & will change
market share holding pattern
• The need for the study is to analyze the
amount of losses Nokia will face and how
its competitors stand to gain from it.
followed as in
Effect of the
deal on the
Scope & Limitations
• Forecast based on historic data
• Ecosystem behavior cannot be predicted
• Nokia’s revenues calculated on basis solely of
Current market share
Average sales price
“The hypothesis for our study
is that the loss in market
share for Nokia is directly
associated with the deal it
signed with Microsoft.”
Conclusion Future Scope
• Worst possible nightmare for
• Short term – Nokia losing &
Microsoft gaining some
• Long term – future of Nokia
looks very bleak
• Recent acquisition of Motorola
• Recent let go of Palm by HP
• Possible return to Symbian /
• How to rescue Nokia