Nokia Reaps Benefits of Emerging Markets
Friday, April 4, 2008
By Andrew Parker
Nokia said on Wednesday it had seen no evidence that the global economic downturn was affecting demand for mobile phones in emerging markets, as it outlined plans for new handsets for developing countries.
Alex Lambeek, a Nokia vice-president responsible for the Finnish company’s strategy in emerging markets, said 2008 should be the first year in which the number of handsets sold in developing countries to customers replacing their existing mobiles would surpass those to first-time buyers.
Sony Ericsson, the world?s fourth largest handset maker, last month issued a profit warning after finding that European consumers were buying fewer new mobiles to replace their existing models than previously anticipated.
Nokia’s rise to become the world’s largest handset maker in the late 1990s, and its strong growth in recent years, is rooted in its leading sales presence in emerging markets.
Asked whether Nokia had seen any evidence of slowing demand in emerging markets because of the economic downturn, Mr Lambeek told the Financial Times: “The simple answer is no. We see a very strong underlying trend of mobility taking root in emerging markets, and the growth drivers for that are still very much in place.”
Mr Lambeek was speaking from Johannesburg, where Nokia is unveiling four new handsets for emerging markets.
They include handsets that are intended to replace existing mobiles, and should be higher margin products for Nokia compared with those for first-time buyers.
For example, the Nokia 5000 – a handset that has a camera, FM radio and email functions as well as phone and text messaging services – is expected to sell for ?90 ($140m, ?71). That compares with as little as ?30 for a basic mobile.
Mr Lambeek said 2008 should be the “tipping point” at which there are more sales of mobiles that replace existing handsets in emerging markets than those to first time buyers.