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Does Nokia sale mean dead-end for BlackBerry, HTC?

‘Pack up’ or ‘sell out’ – this would sum up the overall conversations, not just for brands such as HTC and BlackBerry but the business of pure play global handset manufacturers. The growth of the mobile industry that celebrated the advent of affordable handsets and the emergence of regional players, it appears, was writing a simultaneous warning for players that were not present across screens – television, laptops and desktops and mobile.

Many industry observers stated that the sale of Nokia’s phone business to Microsoft marked the end of an era. An era that was marked with not only Nokia’s absolute dominance in the mobile device space but also saw it inspire local albeit smaller players in various markets globally, including the Asia Pacific region.

Over the years, as Nokia was losing out share, the impression it was forming was that its understanding of the mobile industry did not stay in step with the changing times. Nokia’s decision to stay out of the operating system space, unlike some of its competitors, was one reason that held it back. Another was the delay in making affordable, quality models available – a space that local players in various markets, courtesy the manufacturing expertise of China, grabbed at the first available opportunities.

A third reason was that some of its competition like Samsung and Sony entered the mobile handset market after a significant play in other screens like television and laptops/desktops. Mobile was their natural extension, as it was the consumer’s. Nokia’s first mover advantage kept it ahead for a long time but evidently, its prowess was not enough beyond a point.

The other players in the space are not without troubles of their own.

Depending on how subtle one wants to be, BlackBerry is either seen as a dead business or a dying business. This is despite the clear niche that it had owned initially with higher end professionals and then with target groups that was as varied as entrants in the business to students. BlackBerry had it all – the hardware, the OS, the expertise, the partnerships and the required marketing push.

HTC is another brand, that despite the forward looking, stable quality devices it is known for, is seeing its own set of challenges. Its decision to back the Android OS helped it in hanging on to the HTC loyalists but the low number of handset sales is likely to catch up with the brand sooner or later. The company is taking steps right now including bringing Robert Downey Jr on board as its brand ambassador but the task at hand is far bigger.

The quick industry predictions for these brands post the Nokia sale has varied from ‘HTC should just sell out to Google’ to ‘BlackBerry is going to close shop’. The market economics have become tough for these brands. Whether it is marketing or distribution, their competitors have a lot more to leverage. In many markets in APAC, a consumer mindset has moved from long lasting handsets to a acquiring the latest piece and lower price-points enjoy an advantage there. Global handset players either stayed away from the low price point game or took their time in matching what some of the local players were offering in the space, ending up in losing a large mass of consumers in some key markets. For instance, India touted to be one of the biggest mobile handset markets in the world, saw Nokia lose share to local player Micromax in just a year of the latter’s launch in the market.

The Nokia experience has not presented the rosiest of pictures for the global pure mobile handset manufacturers. What is the opportunity – depends on how one sees it. But it is not about pushing forward in this space without making some big business model changes. What those changes are – given the speed with which developments are taking place in the technology world, one will soon find out.

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