Nokia upbeat in face of declining market share

Nokia today defended its position as the world's largest provider of mobile devices - despite falling market share over the past 12 months - rolling out several new handsets and telling silicon.com that when it comes to certain form factors, "sometimes you have to copy with pride".

Speaking in his corporate premises in Helsinki, Nokia chairman and CEO Jorma Ollila said the company's long-term strategy remains unchanged. Executives claim new releases such as the entry-level clamshell 2650 and - crucially - mid-range smart phones such as the 6630 and clamshell 6260, based on the Symbian operating system and Series 60 platform, mean all levels of the market are now addressed.

Ollila said: "We want a strong product portfolio at all times, covering all categories and price points."

Gartner figures out recently show Nokia, despite a long-term goal of 40 per cent market share, fell between Q1 of 2003 and Q1 of 2004 to a position where it garnered 28 per cent of global unit sales.

Nokia points out that even at its reduced level its share is still equal to that of its second- and third-placed rivals combined - Motorola and Samsung on 18 and 14 per cent respectively.

But while Nokia continues to lead the handset market and also plays a commanding roll in the cellular infrastructure market, where it is marginally ahead of players such as Siemens, Nortel and Lucent, but trails Ericsson, according to Dell'Oro Group numbers, it is clear the last few months have seen changes in approach at the Finnish giant. Ollila admitted product roadmaps have been reviewed.

"We even killed some product plans… but we accelerated others," he said.

Among those lines with a cloud over their future are the 7700 media device, which uses a larger-screen Series 90 platform and stylus input. It is now being viewed as a prototype with "volume" shipping of subsequent devices pencilled in for 2005.

But while the company claims to hang on to its 1990s mantel on product leadership, there are those who say its recent efforts have been failing to satisfy its core corporate constituency.

Mark Boulding, senior analyst at Quocirca, said: "They've had an interesting conundrum. When they did innovate they produced some devices out of left field that no one got. There was a gap between what they and others were doing but now they appear to be filling that."

Clamshell designs, some of which swivel for photo and video capture to resemble camcorders, are nothing new to some Asian manufacturers, leading senior VP for imaging at Nokia Multimedia Juha Putkiranta to say: "Sometimes you have to copy with pride."

The good news for the company is that sales of smart phones are on the up - it's a sector Nokia leads, even if PDAs are included, according to Canalys research this month - and there will be around 60 3G launches around the world this year, which is about 10 more than it forecast at the end of last year.

Ollila added that Nokia has "received very good feedback" from operators including 3, O2, Orange, T-Mobile, TeliaSonera, TIM and Vodafone on the 6630, its newest 3G handset featuring a 1.3 megapixel camera and a six-picture sequence mode, among other things.