Competition for the leading position

in the mobile market:

An in depth analysis of key factors

UBI- Business Intelligence Concepts Fall 2005

Presented by: Arend Mulder

Ricardo Serrano
Helmi Soosaar
 Mobile Industry Development

Global sales of mobile handsets,

m
900
800
700
600
500
400
300
200
100
0
1999 2000 2001 2002 2003 2004 2005 2006*

Mobile phone sales will reach 779 m units in 2005.

More than 100 M 3G phones will be sold in 2006. More than 200
m smartphones will be sold in 2008.
40
35
30 Nokia
Motorola
25
Samsung
20
LG
15
Sony Ericsson
10 Siemens
5
0
 Competitive Intelligence Information Flow

Strategy to maintain
Recommendation & Action competitive position

Key Success Factor

Analysis & Interpretation Analysis

Screening & Evaluation of

Sources relevant information

Assumptions & Motorola paving the way in emerging mkts

Unknowns Motorola is pioneer & will dominate

Based on Key factors which company

Key has the edge
Intelligence
Topic
HRA® Model of Success
Factors
"Strong growth in
emerging mobile phone
markets, such as South
America and Africa, is
driving demand for
increasing numbers of
entry-level devices,
precisely the mass-
market segments where
Nokia and Motorola are
"By 2006, we could
among the strongest. see a quarter of
Africa's billion
"Some 80% of the world's users."
population has mobile
phone coverage, but only m illi on
25% have a mobile phone. add 1 50
i a co u ld 0!
Ind
That is 3 billion people who
by 2 01
have coverage but cannot r i be rs
afford mobile subsc
communications,
 Emerging markets
The growth of global mobile market :
1990 11m today 2 billion and in five years 3 billion!

Other Share of growth

Growth
market
Latin 22%
America
8% China 25%

Africa/Mid-
East 20% Rest of
Asia
Pacific
25%
 Largest telecom market in the world
50 % from Asia
Pacific Growth 2005: 400 M
2010: 650 M
50 % population
Prospects: 250 M
Chinese moving 3G in
Youth! 2006:Growth
to cities in the 15 %
next 15 years up to 8 b by
Growth till 2008
2010
 China - one of the most
competitive markets

??? 20%
NOKIA 22%

MOTOROLA 15%
Samsung 10%
Lenovo 5% Lower end of
SonyEricsson 5% NingboBird 8% market: 30%
Amoi 4 % TCL 4% of consumers
Haier 3% Konka 4%
 Leader with 22% market share

2.2 billion investments during past 20 years increasing

Ollila: » manufacturing & R&D capacity
China
becoming Strategy: maintain leading position, retain focus on
our most hand-set business, reach the peripheria and provide
important tailor-made high quality solutions
market in
the next 3
years » « 3G will provide us an
opportunity to improve
our positions »
We ve now Currently 15 % market share -Reach 20 %
tripled our
network in the Invested more than $ 3.4 b since 1987
last year, he
said. This gives New build-up of sales network
us a platform as
we launch all
our new Advantage: A good corporate citizen
products. It
gives us a much
more prolific
footprint to The best in long-term commitment; most
capture more innovative; best adapted to the Chinese
share. market; best employer in China (Source:
Fortune magazine, Chinese edition)
 One to One Comparison
In China

Nokia Motorola

Market Share 5 4

Sales volume 5 4

JV/Alliances 5 4

Cultural Awareness 4 5

Political relations 5 4

Brand 5 4

Total 29 25
Edge Nokia
Influencing
factors China Africa India
Growth
potential Low 012345 High 5 3 4

Legislation Many 012345 Few 3 2 4

Politics High 012345 Low 3 2 4

Infrastructure Low 012345 Adv 3 2 2

Competition High 012345 Low 3 1 1

Total 17 10 15
 Drive to technology

Technology strategies

3G products

Applications

Software
 Strategies for innovation

Patents
Nokia has more out-house
innovation
Motorola has more in-house
innovation
 Motorola has the better application

Nokia has the better outhouse contracts

(Microsoft)

Internet
Email
Route planner
Services (weather reports, news channels etc )
 Nokia is better in touch with the market

Video

Music

Games
 Universal Utility
search engine computing

Portable Online
Online Archives
personal storage personal storage
The domain of Nokia. They have the
outhouse contracts and the best
knowledge what the market wants

Video

Music

Games
Key Success Factors Nokia Motorola Edge

Technology Strategy 5 3 Nokia

3G products 4 5 Motorola

Applications 5 3 Nokia

Software 5 4 Nokia

Total 19 15 Nokia
 Customer Preferences

Product Portfolio & Quality

Time to Market

Marketing Strategies
Uninvolved
New Life Harmony
Voice as a Link
Adopters
Intense
Forerunners
Nokia s Product Portfolio, Quality
& prices

From basic features to business ready

Push to talk to internet navigation
Helps users track usage
Longer talk times
Price range (70 to 100 euros)
Motorola s Product line, Quality & Prices

Focused on battery life and

basic functions like SMS.
FM radio
Large display and durable
design
Very simple, bare essentials
Price range (25 to 50 euros)

r us b ef or e
na wa s c o ol fo o l ."
"Chi w a s co
l se t ho ught it
anyone e
Over 20 new
products introduced
in 2005
Leading the industry in
5 new models for new product launch
holiday season Timely delivery of new
Millions spent on product is key business
Time to Market strategy
adjustments New manufacturing
facilities
Increased distribution
network
 Marketing Strategies Nokia

Aggressive
Pricing
Ensure
Focused on Handset
Accountability Manufacture
and only
Quality
Enhance
Product
Improve
Portfolio
Collaboration Customer
on Designs Satisfaction
Increase
Distribution
Channels
Increase
Commitment to
Adjust
Emerging
Preferences for
Markets
specific
Focused on
markets
replacement
 Motorola s Marketing Strategy
We have Focus on
designed and Mass
developed Market
phones for the Functionality
Logistics
African mass &
Adaptability Support
market and is
loaded with a Customer
list of Preference
unparalleled
features such as Flat
longer battery Low Prices Distribution
life, large Network
displays and is Market
above all Segment:
Youth
affordable,"
 Unicom
$$$ Contract Pricing Strategy
Won GSM under 30
Bid for a 2nd
time

Pioneer in
entrance to
markets

Increase
Investments Channel
in R&D Leader in Distribution
Target Mktg
 JV to become billions spent Strategic
largest in R&D Alliances with
manufacturer investment local operators

Numerous Increased
In country distribution
manufacturing new
sales offices network
facilities
Key Success Factors Nokia Motorola Edge

Product Portfolio 4 5 Motorola

Product Quality 5 3 Nokia

Customer Preferences 4 5 Motorola

Time to Market 5 4 Nokia

Marketing Strategies 5 5 Even

Penetration of Markets 5 4 Nokia

Total 28 26 Nokia
Key Success Factors Nokia Motorola Edge

Dominance of Emerging Markets 29 25 Nokia

Technology 19 15 Nokia

Marketing Strategies 28 26 Nokia

Final ranking 76 66 Nokia

 Nokia

Nokia

Nokia
 Marketing
Apply the Olympic medal focus
strategy
Expand coverage areas
Emerging Markets
1. Break out of cities to rural
areas: focus on areas, where
the cost of building wireless
infrastructure is more cost-
effective than in building a fixed
line (China/India)
2. Focus on Youth: imaging and
games (China/India)
Technology
1. Improve pioneering
2. Increase sophisticated
applications
Marketing
Introduce the voice of the
customer into products
Nurture current network of
alliances and distribution
Emerging Markets
1. Focus on low-cost market
(Africa/China)
2. JV/Liaise with locals (India)
Build position as Good Corporate
Citizen (India, Africa)
Technology
1. Look outside
2. Know your environment