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Even in emerging markets, Nokia’s star is fading
Analysts say it has failed to keep up with the changing tastes of the growing middle class.
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In China, the world's largest cellphone market, operators have started to play a bigger role in selling phones, and that trend is working against Nokia.

"They prioritise domestic vendors over international companies," said analyst Pete Cunningham from Canalys.

In January-March its sales there shrank 62 per cent from a year ago. Its share of the market had dwindled to 24 per cent last year from 39 per cent two years earlier, according to research firm Strategy Analytics.

In Africa, too, its market share slipped to 51 per cent last year from 62 per cent two years before. It's still ahead of rivals because of its superior distribution on the continent, says Neil Mawston at Strategy Analytics, but it has to act to arrest the decline.

"Nokia is drying up like a puddle in the sun and urgently needs new products to refill the puddle," he said.

In the meantime, it is racking up losses, its shares have lost more than three quarters of their value in a year, and this week two agencies cut its credit rating to junk status.

Nokia says it is continuing to invest to attract customers in these markets.

"Our mobile phones portfolio continues to be strong, especially in key markets like India, Nigeria, Brazil and Mexico where the Asha products are receiving record high scores from consumers," said Mary McDowell, EVP Mobile Phones.

She said the company would be announcing data plans for the new Asha 202 basic phone model with five operators in India on Monday.

MISSING TOUCH

Analysts also say Nokia can be slow to react on popular technology.

In emerging markets, for example, multi-SIM models have been a draw for people who want to take advantage of freebies doled out by competing carriers, but Nokia lacked such phones until mid-2011.

Another costly gap in its basic phones offering is a full touch-screen model. Around 105 million such phones were sold last year globally, according to Strategy Analytics.

"Nokia left the door wide open for Samsung and others by not delivering a full-touch feature phone. The Koreans figured it out three years ago, yet Nokia still does not have a product,"said Ben Wood, head of research at CCS Insight.

"In the meantime, prices of Android smartphones have dropped, and Nokia's window of opportunity is almost closed."

Nokia is due to unveil a full-touch 306 feature phone model in the coming months.

 

 

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