Wednesday 6 May 2009

Nokia and iPhone; Strong, Famous and Hip?

I usually keep my tweeting separate from my blogs, but this time I will make an exception. In 137 carefully chosen characters, I noted a report that appeared in Business Week, "A Bid to Reconnect with America" (April 13th), which discussed the efforts by Nokia to increase its market share for mobile phones in the U.S. from (as described) "its meager 8% share". Globally, Nokia enjoys a 37% market share. Fellow blogger and tweeter Jeremy Phillips quickly tweeted in reply that, in his view, " I'd settle for just half of that. For a foreign brand it's doing fine." Now I must admit-I was surprised by Nokia's relatively modest degree of U.S. market penetration. I had become so used to reading a 30% plus figure for Nokia's market share world-wide that I had no idea that this number masked a decidedly smaller share for the U.S. market.

The article recited a number of reasons for the single-digit market share in the U.S., including an alleged ambivalence to the U.S. market, due to "the heavy control wireless carriers exert and because wireless technology has not been as advanced as in Europe." As well, Nokia reportedly garnered more substantial returns in emerging markets, most notably China. More generally, the article concluded that, contrary to mobile users in most of the rest of the world, Americans don't think of Nokia as the cool, go-to company for advanced cell phones." I assume that the prize for image in the U.S. goes to Apple and the iPhone, with RIM and the Blackberry carving out cache of its own in the professional market. Nokia products lag far behind.

But what is hip in the U.S. is not hip in the Asian subcontinent. In a small item 10 pages away from the report on Nokia in the U.S., under the title ""iPhone's Asian Disconnect", the same Business Week issue discussed the dismal success of iPhone versus Nokia in India. There, Nokia is dominant in the smart-phone market, while the iPhone is reported to have sold less than 20,000 units. The item goes on to recite a number of reasons for the lack of iPhone's success, including price, download speeds and resistence to arrangements for multi-year service agreements. Whatever the reasons, it seems clear that in India, Nokia is at least for now the preeminent brand in the field. The item went on to speculate that unless Apple figures out a way to get local carriers to subsidize the phone, "Asia is just not going to work."

The stark difference in the strength of the Nokia and iPhone in brands in the U.S. and India, respectively, got me to ask a series of questions regarding brand strength and the fame of marks. Is Nokia a famous brand: if so, where? Does an 8% market share in the U.S. affect the strength of the Nokia mark and its status as a famous mark? To what extent are strength and fame national, regional, or international in scope?

The iPhone has been around for only a short period of time, but it has benefitted from unparalleled media coverage and a certain degree of commercial success. But, as the Business Week item suggests, commercial success may be geographically limited, both in the present and in the future. If so, does the media preoccupation with the iPhone brand trump commercial realities, whereby the strength and fame of the iPhone mark and brand transcend the commercial success of the device, at least in Asia?

Not so hip in Asia?

Maybe the iPhone is the product of a particular set of cultural values coming out a particular mileu: what resonates in Palo Alto may not resonate in Mumbai. If so, perhaps perceived brand strength and fame are as much a function of media coverage as actual commercial penetration. What happens to the strength of the the iPhone brand if it never takes off in Asia, even if it remains a dominant player in North America? I'll think about these questions the next time I make a call from own modest cell phone (being a Nokia and far from being a smart phone).

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