Nokia's Lumia deal with China Mobile raises hopes

Nokia is a Finnish multinational company, that also helped develop the GSM system for mobile communication and has been the world’s largest vendor of mobile phone for quite some time. But in the past few years since the evolution of the smartphone/ internet enabled devices, Nokia has seen its market share slowly erode away to strong completion from Apple with the iPhone & Samsung phones powered by Google’s android operating system. In an attempt to strike a balance and stop the ongoing destruction of its once mighty market share, Nokia decided to dump its existing Symbian operating system and signed up with Microsoft to use Windows as their primary operating system for high end smart phones. 

Nokia is now in talks with China Mobile – the world’s biggest mobile phone service operator, on a sales deal for the new Nokia Lumia smartphone/ handset to its subscribers. China Mobile has over 700 million subscribers and also has 4G network capability. But China Mobile is one of the providers that do not have a contract with Apple to sell iPhones. Hence China Mobile is looking to market the Nokia Lumia smart phone in an attempt to win back the market share that it lost since the launch of the Apple iPhone.

Word of this partnership in the making sent Nokia’s stock prices in an upward direction. Nokia is banking on Microsoft’s Windows 8 platform to launch itself back into the smart phone market and from what it seems is making the right moves in that direction teaming up with China Mobile. Nokia released a Lumia variant which is the cheapest Windows 8 phone on the market. It will definitely be completion to the iPhone and Samsung devices and Nokia hopes to release higher/pricier variants of the Lumia in an effort to capture different segments of the market. Now with China Mobile it will also have a 4G cellular network to back it up and provide an excellent customer experience. Microsoft is also looking to launch itself as a key player in the cellular operating system market and is banking on Windows 8 mobile operating system being a success. But it seem to be of the greatest value to Nokia since the company has seen its market share from the once 50% to almost 10% today.

What is to be seen in the days to come is how this strategy or last ditch effort as some may call it will play out for Nokia and also China Mobile & Microsoft. And also if Nokia can extrapolate its strategy globally to regain market its market share.

 

References

http://www.reuters.com/article/2012/12/05/us-nokia-china-idUSBRE8B408I20121205

http://www.forbes.com/sites/ericsavitz/2012/06/14/nokia-doomed/

http://www.forbes.com/sites/greatspeculations/2012/12/05/nokia-scores-big-win-with-china-mobile-partnership-for-lumia-920t/