Word: nokia
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...Much of Nokia's emerging market dominance boils down to cost management - a crucial advantage when it comes to selling smart phones to price-sensitive consumers in India and elsewhere. Nokia will likely ship more devices worldwide this year than the next three biggest cell-phone makers - Korean rivals Samsung and LG, and London-based Sony Ericsson - combined. Manufacturing on that scale brings enormous purchasing power, making it possible to squeeze the cost of everything from memory chips to plastic casings...
...Nokia is also typically more efficient when it comes to how it builds a phone. While an iPhone requires around 1,000 components, Garcha says Nokia's 5800 needs only half that number. "Having an extra 10 or 20 dollars on your bill of materials doesn't matter when you're selling your phone at $600," he says. "Think about making it a smart phone at $100 a few years from now: $20 of cost is 20 percentage points of margin. It actually becomes very important...
...Nokia's real genius is simply in selling phones in more places than any of its competitors. From Indian mountain villages to towns on the dry plains of northern Nigeria, Nokia is everywhere. Supplying the end user with a smart phone in Western Europe and America is typically the job of cell-phone operators who will even subsidize the cost of a device in return for tying a buyer to a monthly plan. Not so in emerging markets, where users typically buy their phone independently. That means manufacturers need their own "very efficient distribution," says Sanford C. Bernstein's Ferragu...
Consider India. Years of building its business in the country - the first ever cell-phone call in India in 1995 was carried over a Nokia phone and Nokia-deployed network - has established the company as India's biggest supplier by a huge margin. Nokia devices are sold in 162,000 retailers in India, more than three times the number for rivals Samsung or LG. Although Samsung is investing heavily to catch up, Nokia claims roughly 60% of the Indian market. So ubiquitous are the firm's products that many locals refer to their mobile phone as a "Nokia" even when...
...first quarterly loss in the last three months of 2008 after misjudging demand during the recession. "That was a lesson learned," says Asus chairman Jonney Shih, who is adjusting by shrinking the company's product line. Says HTC's Chou: "You're competing with giants like Apple and Nokia. You must really have something special...