Consumer Behavior and Nokia

Nokia's operations head for India, West Asia and Africa, D Sivakumar is leaving after a tumultuous 8 years.

These years saw Nokia rise to a dominant position in the Indian mobile handset market and then, starting from 2009 onward, slowly lose out to different handset makers in all categories. Earlier, it was dominant in budget category, in mid-price ranges and in the high-end smartphones as well. After 2009, it lost out in all categories to new and existing players. Things might be slowly turning around, if Blackberry's experience with a new phone is anything to go by, and Nokia may soon power back on the sales of new Lumia series. But the entire ordeal of the company highlights the importance of understanding consumer behavior well before competitors do. 

We have the benefit of hindsight now, but Nokia probably knew about the various consumer preferences. It somehow got the timing wrong every time. When Indian market was in early stage, most of us had phones in the below 10000 rupees segment. And style was the something people looked for. Nokia came out with different colors and shapes (candy, flip, bar) and at different price points. After that, around 2006, when Moto Razr was the craze, came the era of slim phone. By 2008, all eyes were on Apple and I remember people postponing phone purchase and preferring to wait for Iphone's arrival in India. Smartphone category was refined and the losers were Blackberry and Nokia's N & E Series. There was a dud called N8 launched as late as 2011 (termed by Gizmodo as "top-of-the-line horse-drawn carriage released shortly after Neil Armstrong stepped on the moon") which failed to withstand the torrent of launches from HTC, Motorola, Samsung and above all, Apple.

While the upper segment (and the mid-segment too as companies launched touchscreen smart-phones between 10-20000 rupees with good cameras, OS and web features) was witnessing this revolution, Nokia's bread and butter lower end segment was swept by dual and triple-sim storm unleashed by Chinese (and Indian) players. The next trend in the lower segment was touchscreens and now phones with big (4 inch) touchscreens and mobile OS are available in below 10000 rupees segment. The current trend is about value added services and applications. The more that people can squeeze out of the hardware and sensors of their phones, the better the mobiles. 

Overall, Nokia seems to have missed the most relevant consumer preference every time. It launched big screen phones with awesome processors very late. It was late in launching dual-sim phones in India. It is currently way behind others in terms of applications and services. Hopefully, things will improve with the Windows 8 platform. This failure to analyze and study consumer behavior is surprising but is something that happens very often. Companies fail despite spending much time and money studying consumer behavior. And those mistakes are costly as Nokia is learning slowly. In all these years, it has kept intact its reputation for robustness, good after-sales service (my friend's Lumia was replaced within a week of complaint) and good cameras. 

Image Copyright: Nokia

I am looking forward to this year's sales and technological trends. As of now, phones have become boring copies of one another. Motorola is one key company to watch out for, since Google might have some fresh new technologies up for launch (literally, as HTC Google Nexus one was launched into space recently). If they introduce something exciting (rumors of an X-Phone are going around with various images, like the one below), it would be a good thing to splurge cash on that. 

Image Copyright: Unknown.