Word: smarts
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Dates: during 2000-2009
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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...
...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...
That kind of presence in emerging markets helps explain why Nokia is blurring the boundary between smart phones and cheaper handsets, and trying to entice customers to trade up. In recent months, the firm has unveiled a slew of devices aimed at developing markets, some costing as little as $60. That might seem a lot to pay for someone earning a few hundred dollars a month, but for many people in places where access to electricity is hit-and-miss at best, a good phone can double as a computer, an MP3 device or even a video player...
...that many energy experts deride as a permanent pipe dream. Another House bill would have the Energy Department spend $30 million a year for five years on natural-gas vehicles, even though the Obama Administration hasn't sought the money and few experts believe natural gas is a smart fuel. (Watch TIME's video "The Truth About Wind Power...