REPORTON NOKIA’S DOWNFALL PreparedforDr.Awais AzamUniversityof Engineering and Technology, Taxila PreparedbyMuhammadSaad Kayani15-CP-89 January15, 2018 Universityof Engineering and Technology, TaxilaDepartmentof Computer Engineering January 15, 2018 Dr. Awais AzamAssistant ProfessorCPED, UET,Taxila Dear Sir,As I was given the taskof compiling a report on the reasons for the downfall of NOKIA mobile phonecompany, I am submitting the attached report entitled Research report on Nokia.The report examines thereasons behind the downfall of the company; the issues and weaknesses relatedto it and includes some suggestions for the company to regain the lost status.I hope you find thisreport satisfactory. Sincerely yours,Muhammad Saad Kayani15-CP-89Student of ComputerEngineeringUET, Taxila Contents Chapter 1.
4 1.1 Abstract. 4 Chapter 2. 5 2.1 Introduction. 5 2.2 Background to Downfall 5 2.3 Suggestions to regain the lost status.
7 2.3.1 Dropping the prices. 7 2.3.
2 Change the advertisement strategy. 7 2.3.3 Modify the products.
7 2.3.4 Create more hype.
7 Chapter 3. 7 3.1 Conclusion. 7 Chapter 4. 8 4.1 Bibliography.
8 4.2 References. 8 Chapter 11.1 Abstract Thisreport was commissioned to examine why the sales volume of Nokia Mobile PhoneCompany has dropped over the past few years and to recommend ways of increasingthe volume.
What happened to Nokia is no secret: Apple and Android crushed it.But there are many other reasons for that failure. Since the rise of smartphones Nokia also got into the act and produced its first smart phone in 1996with a touch-screen and internet enabled at the end of nineteen nineties. ButNokia was still not able to produce what the people actually wanted. It spent alot of money on research and development. Nokia not only failed to recognizethe importance of software but also underestimated how important the transitionwould be. It is recommended that company take immediate measures to launch andpromote the smart phones with the technology demanded. And launch campaign contains endorsements byrenowned mobile phone experts.
Chapter 22.1 Introduction Nokia was founded by Fredrik Idestamin Finland as a paper manufacturing company. In 1920, Finnish Rubber Worksbecame a part of it and later on in 1922, Finnish Cable Works joined them. Allthe three companies were named as Nokia Group in 1967.In late 1970s, Nokiastarted taking an active interest in the power and electronics business and by1987, consumer electronics became Nokia’s major business. Nokia created the NMTmobile phone standard in 1981 and launched the first NMT phone, Mobira Cityman,in 1987. The company focused on two businesses- mobile phones andtelecommunications networks.
 The company is viewedwith national pride by Finns, as its successful mobile phone business made itby far the largest worldwide company and brand from Finland. Atits peak in 2000, during the telecoms bubble, Nokia alone accounted for 4% ofcountry’s GDP, 21% of total exports and 70% of Helsinki Stock Exchange market capital.2.2 Background toDownfall Back in 2006, when OPK took over torun Nokia, Nokia was the world’s bestselling mobile phone maker. They weregetting almost 35% of the market share with Motorola it’s only competentgetting nearly 20% of share from the market. The first think that happened tothe mobile phone market was the Entrance of Apple into the phone space, withfirst iphone prototype demonstrated in January, 2007.Up to 2007, Nokia was thebest marketing machine in the mobile telecoms. It was loved by the tech mediaand had the best customer loyalty in the world.
But Apple proved to be farbetter than Nokia in marketing. And its customer loyalty also proved to belegendary. According to the maker, the iPhone was the best smart phone ever andbecause Steve Jobs said so, that became the storyline. The truth didn’t matter.That the iPhone 2G was not even a proper smart phone, it didn’t even offeredthe users the ability to install apps and didn’t support industry standardslike MMS. But a year later installing apps was made possible.
The iPhone wasnot a 3G device, didn’t have GPS and stereo Bluetooth. But that didn’t matter.If your smart phone didn’t have the one cool thing the iPhone did –a touchscreen – it seemed your phone was old fashioned.With time the iPhone wasintroducing more and more features and as a result Nokia was facing morecompetition and was rapidly falling from grace.
Apple gained 14% market shareof smart phones in no time. While facing a rival like Apple what Nokia neededfrom CEO, was a showman a brawler. OPK was not a showman and Nokia couldn’tafford to go out and fight.
What Nokia needed was over-hype and supercelebration of its huge legacy of achievements and every possible new tidbit itwas doing. But Apple was a champion in marketing. In the meantime the profit margins of Nokia fell downfrom 21% to 4% only. There was another mistake, Nokia overestimated thestrength of its brand, and believed that even if it was late to the smart phonegame it would be able to catch up quickly. Nokia continued to insist that itssuperior hardware design would attract user.
By 2010 Nokia had alreadyintroduced a lot disappointing phones and its operating system had alreadyproven too buggy and unintuitive to attract customers. Following chart shows howrapidly the volume of Nokia sales has decreased. Figure 1: Chart showing sales over the years 2.3 Suggestions to regain the lost status 2.
3.1 Dropping the pricesThe first remedy is to drop the prices of thesmartphones. This is usually adopted by the companies with a large economy forsales. In need those companies sale at loss as well as on a marginal low costthan their competitors.2.3.2 Change the advertisement strategyAs seen Apple and Android have great promotion andadvertisement strategies so if Nokia revisits its promotion strategy and turnsto some mobile phone experts while launching new models would be a great steptowards regaining the lost grace. 2.
3.3 Modify the products Nokia should learn fromits previous mistakes and should not only focus on hardware technology but alsomodify and introduce some new software technologies so as to meet the publicdemands. And they should consider what their customers want from them ratherthan what they can produce for their customers.2.
3.4 Create more hypeMost of the new phones that Nokia is producing arequite up to the mark. But as its competitors it should create more hype beforethe launch of a new product.
It should make good use of social media, printmedia and electronic media. Chapter 3 3.1 Conclusion From all the facts we conclude that thedownfall of Nokia was obviously caused by the introduction of Apple and Androidbut there were many other reasons due to which Nokia has lost all its grace. Wesaw that if Nokia had adopted a better marketing policy it could’ve survived inthe mobile phone market. Somehow the CEO was also responsible because he didn’ttake the right decisions at right time which further worsen the situation. Sonow if Nokia tries to focus on four main policies i.e. make competitiveproducts, satisfy the customers, modify the technology and revisit the Chapter 44.
1 Bibliography1. Vilpponen, Antti (4 September 2013). “Nokia: Finland mourns the demise of itsproud tech heritage”.2. Kelly, Gordon. “Finland and Nokia: an affair toremember”.
3. Bloomerg (4 September 2013). “Finland mourns loss of national icon Nokia”.4.
2 References1. https://www.scribd.com/doc/28332852/Research-report-on-Nokia2. https://en.