Nokia USA – Broken curse

The curse of the US market looks to have been broken.

• Figures for the US smartphone market show that Nokia looks to have finally broken the market share curse that has plagued it since the days of TDMA.
• Figures from Counterpoint (see here) show that Nokia’s market share has increased massively both YoY and QoQ.
• Nokia now stands at 4.1% US smartphone market share compared to 1.4% in Q2 13 and 0.7% in Q3 12.
• The losers have been Motorola, LG and BlackBerry.
• Nokia has released a lot of models into the US market but I suspect that this is not the reason for the gains.
• Quite simply the Lumia 520 ($175 unsubsidised) offers fantastic value for money and undercuts its competitors (with the same specification) by at least 20%.
• Nokia’s re-emergence in the US market has been all about having a decent phone at a cracking price and the desire of the operators to have a third ecosystem.
• With Apple and Samsung jointly tied in first place at 33.7% each, the US market has become a duopoly which is terrible news for the operators.
• The rise of the iPhone has created a systematic loss of bargaining and brand power for the operators which has led them to welcome Nokia back with open arms.
• This combined with the great value that the device offers is what has driven the resurgence witnessed in the US market.
• However, Nokia and Microsoft’s job is far from done.
• People are not buying Windows Phone because they love the experience.
• They are buying it because it is cheap.
• This is a great way to seed the market but much more needs to be done.
• The Windows Phone offers a good experience and Microsoft services are of high quality and offer good coverage of Digital Life.
• Microsoft needs to let Android users know about this and explain to them why they should buy a Windows Phone.
• To date, all it has done is to let them know that it exists.
• This requires a huge change in the marketing strategy as well as total overhaul of the retail experience.
• When this is done, then I can believe that Windows Phone can really claim its rightful place as number three with market share of 20%.
• Until then it will remain the champion of the cheap and cheerful.
• This is great for headlines such as these but lousy for profits.