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May 30, 2013

Nokia Flops on its Home Turf - Loses Finnish Market Leadership to Samsung

Just as Nokia seems to be regaining its basic footing, IDC jumps in and rains a bit on its parade with new smartphone data that points to Nokia not only losing market share on its own home turf, Finland, but in fact has been toppled from the number one spot in Finland for the first time ever. On top of it all, right on the heels of the drop in market share news, Samsung is now in the process of delivering a “smaller” Galaxy S4 model, something that might also prove troublesome for Nokia.

So let’s get right to the bottom – IDC is reporting through its World Wide Mobile Phone Tracker service that for Q1 2013 Nokia has now officially been beat out of its own home turf smartphone share by…that’s right, Samsung and its endless parade of Android mobile devices. The numbers are quite straight forward: Samsung shipped 211,000 devices in Finland in Q1 2013 and Nokia shipped 196,000 devices.

Samsung sales rose 38 percent compared to Q1 2012. Nokia sales, unfortunately, fell 25 percent. IDC notes that both manufacturers actually saw volume declines in Q1 2013 compared with Q1 2012, but Samsung only declined 15 percent compared to a 36 percent drop for Nokia. Given that Nokia has at the least managed to maintain a fairly high profile persona during these time periods with its Lumia smartphones, the shift is much more dramatic than some of us might have anticipated.

Now it is certainly true that those numbers may very well turn around in Q2 2013, especially since Nokia will be able to fully account for Lumia 920 shipments and the newly released Lumia 925/928 devices. Even so, and even if it proves temporary (as we hope it does), it must be relatively demoralizing to both Nokia and Finland itself to have such a thing – as illustrated in the chart below - actually happen.

From a market share perspective, IDC reports that Samsung has now controls 36.1 percent of the Finnish market, with Nokia’s share dropping 33.6 percent. The real issue here – and the aspect of the whole thing that has got to be morale-deflating is that a year ago Nokia still owned a 48 percent share of the Finnish market. Samsung, despite well over two years worth of combined Nokia-Microsoft Windows Phone 7/8 marketing efforts, managed to shift the market in its favor – rising to its current share from 28 percent share a year ago.

IDC further notes that back in 2010, the year where Nokia was truly floundering, it still had a 65 percent share of the Finnish market. Any way one looks at it the decline is rather astounding , but clearly Samsung’s extremely well thought out $400 million worth of marketing blitz has not only worked against Apple but has perhaps provided an unexpected bonus against Nokia.

We remain hopeful that Nokia will continue to move forward - however long or however slowly it may take to claw and fight its way back into contention. At the very least, it needs to win back its own home turf. I believe that the company needs to focus on delivering a lighter weight and aluminum-based Lumia and hope that Nokia will become much more aggressive in driving its camera technology to the forefront.

Meanwhile, Nokia certainly cannot hope to match Samsung in marketing dollars on its own – heck it won’t even be able to play five levels down from Samsung. But Microsoft can, and Microsoft needs to really step in and work with Nokia to deliver a marketing campaign worthy of Microsoft’s capabilities. There has been some effort but not nearly enough.

Microsoft, here’s some advice: Get in there and help Nokia out! It simply won’t do for Samsung to be able to claim ownership of the Finnish market.

Edited by Jamie Epstein

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