Recent smartphones from Samsung, HTC and LG indicate that Nokia’s finally got competition in the high-end space. However, it’s going to take more than engineering skills to succeed in India’s tough mobile market. Consistent phone branding, clear messaging and a solid distribution network are as important, and that’s where Nokia’s streets ahead. Can the competition catch up?
It isn’t about features
There was a time when the only competition Nokia’s smartphones had was from the odd, super-expensive PDA-phone that was more the former than the latter. Over the last year though, the competition has dramatically upped the ante in terms of what it packs into a handset.
A case in point is the near-simultaneous release of Nokia’s new flagship phone, the N96, and Samsung’s Innov8. The Innov8 outclasses the N96 on nearly every count, making it a widely-awaited contest. And that’s not the only notable example: the Samsung Blackjack II is a very capable Windows Mobile QWERTY phone, matching Nokia’s E61i. The Samsung Instinct was hailed the iPhone killer, offering a full-face touchscreen with touch feedback – touchscreens are something Nokia doesn’t even have in the market yet. LG’s not far behind in the race either. The LG Viewty, released around the same time as the N95 sported a 5MP camera with “image stabilization”, and a touchscreen.
Yet, in spite of these releases, both Samsung and LG lag far, far behind Nokia in the Indian smartphone market. Admob’s June 2008 Mobile Metrics review states that 97% of ad requests from smartphones were from Nokia handsets. It’s more or less clear that Nokia’s built a solid reputation in India as *the* smartphone brand. And at the heart of that is its N and E series branding strategy.
Nokia’s smartphone strategy: Product, Brand, Distribution
Nokia’s strategy of creating two lines of positioning for entertainment (Nseries, with advanced imaging, video, internet and gaming capabilities) and business (Eseries, with focus on connectivity, productivity and email) certainly seems to have paid off over the last 3 years.
Nokia’s used these brands to create multiple, successive communications campaigns around the terms “Nseries” and “Eseries”, which marked a break from the number-oriented labeling custom. Consider Nokia’s own phones; could you infer anything at all about the 3650 from its name? The 7610? The 9200? Contrast that with, say, the N81 – I can tell at a minimum (because its an Nseries) that it’s a phone with reasonably good looks, stereo music, large storage capacity and a 2MP+ camera. Here’s a decent article about Nokia’s efforts to build the Nseries brand. Ditto for the Eseries.
Finally, think about the massive investment Nokia’s made in its dedicated priority and concept stores. While it already has an extensive distribution network for its low-end line (see the section “The Distribution Edge” in this article on Knowledge@Wharton – free reg. req’d), these stores are a great way of showcasing your top-line phones to people for whom the purchase is a high-involvement decision.
Samsung’s strategy (or the lack of it)
While this is a discussion about Samsung, it holds equally – if not more – true for other handset manufacturers.
In contrast, Samsung’s strategy seems to be all over the place. No, let me correct that – I don’t think they have a strategy. They know at a minimum that their phones need to do music, video, photos, the Internet, and that touchscreens are good to have. That’s about it.
From a product perspective, there doesn’t seem to be any great deal of thought on timing launches (relative to market conditions or relative to previous releases). Further up the development cycle, what features go into which product (or, more importantly, what features to leave out). Or even further up the cycle, what OS to use on their phone (they use several).
On the marketing side, from a branding perspective, each phone seems to be a brand unto itself. What can explain names like Innov8, Instinct, Glyde, Blackjack, F-480, SGH-i780, U900 Soul? (All are recent releases packed with features). There’s no consistent product look (you can, in one look “tell” that a phone is an Eseries device, can’t you), color or name.
If your phones don’t use a consistent Operating System (the way Nokia uses Symbian+S60), it’s impossible to develop an active developer community. If you don’t have a consistent brand identity, it’s difficult to develop ambassadors for your phones. If you keep developing a different website for each of your phones, its impossible to build communities online.
What markets is Samsung chasing? What positioning is it considering for its phones to gain share in these markets? More abstractly, what do Samsung’s phones “stand for”? What is the message they’re trying to get out? Even SonyEricsson has a rudimentary strategy that says “We make entertainment-centric phones. Some of them make great music devices – the Walkman series, other are great for photography – the Cybershot series”. HTC has a less clear strategy around its Touch line of phones, but at least they’ve got a consistent name and OS in place.
From an advertising perspective, the only shred of consistency I’ve seen over the past months is the “Next is What?” Samsung campaign. However, I don’t see the campaign tied to a product that anyone will remember. Nokia, on the other hand, has run periodic campaigns for each generation of devices it releases – in print, on TV, online.
From a distribution perspective, I don’t see why Samsung doesn’t leverage its extensive distribution network for its home appliances and entertainment devices – it’s a channel where it has one heck of a headstart on Nokia. I see digital cameras and Indian-manufactured laptops sold in those sorts of electronics stores. Phones seem to make just as much sense.
Conclusion
While the Indian mobile market is (still) seeing explosive growth, the high-end of the market is maturing. The implication is that features are no longer the USP for a smartphone; brand is. And how well you communicate that brand to your audience. Nokia has done a stellar job since 2005 by investing in its Nseries and Eseries strategy – in product design, marketing and branding, advertising and distribution. The competition seems to already have the engineering capability to match Nokia. But it needs to get its act together if it needs to take on Nokia in the marketplace.
