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What Will Nokia’s New India MD P Balaji Do?

It’s hard to come across someone in the tech community who doesn’t think of Nokia as a has-been. These are turbulent times for the company, and it appears that, at least in India, P Balaji as taken on a very difficult mandate as Senior VP (IMEA) and Managing Director for Nokia’s Indian operations.

Balaji joins from Sony Mobile Communications (erstwhile Sony Ericsson), where he was the Managing Director for its India business. Balaji’s appointment follows Nokia’s restructuring of its business in October 2011, when Nokia India MD, D Shivakumar was promoted to head the company’s business in India, Middle-East and Africa. Balaji has earlier worked as vice-president, business development, corporate affairs and communications at Ericsson India.

This appointment comes at a time when the general perception is that Nokia is on a decline. The company’s shares hit their 17 year low, last week, reducing its market cap to $6.72 billion, lesser than what Finnish developer Rovio’s (makers of mobile games Angry Birds & Amazing Alex) is apparently valued at. The company has not been able to deliver on its promise of being able to provide a credible alternative smartphone ecosystem with Microsoft, with its smartphone sales seeing a decline, and Lumia devices (based on Windows Phone) getting a far from warm reception in markets. The company is burning cash and its expected to report more losses and decline in sales when it reports its quarterly results on 19th July.

Its The recent Windows Phone 8 announcement by Microsoft, left the current crop of Windows Phone devices high and dry, as they’re based on a different architecture and require advanced hardware. Current Lumia phones will not be getting the Windows Phone 8 update, and will have to settle for the stop-gap, mostly cosmetic Windows Phone 7.8 update. Even the top-of-the-line Lumia 900, which is yet to be launched in the Indian market, will not receive the Windows Phone 8 update. The next generation of Lumia phones is not expected before Fall (October-November). So this could impact the company’s smartphone sales and subsequently its losses, even in the next quarter.

In terms of smartphone shipments in India (based on the Cyber Media Research report), in the last quarter, Samsung has overtaken Nokia with a 40.4% market share, while Nokia’s share was at 25.5%. In 2011, Nokia was the biggest player with a share of 38%, followed by Samsung with 28% market share and RIM (BlackBerry) with 15%. According to Voice & Data’s survey, Nokia posted a revenue of Rs 11,925 crore in 2011-12, 8% lower than last year’s Rs 12,929 crore.

One of the major reason for this, is the rise of Android as a smartphone eco-system in India, with a number of low-cost phones on offering including the ones from Indian handset makers like Micromax, Spice and Karbonn, and local developers embracing the platform for apps. In comparison, Nokia’s abandoned smartphone OS platform Symbian, has lost the race, and Windows Phone did not take off.

The only saving grace for the company in the Indian market is its Dual-SIM and Asha line of Series-40 phones. But with Android touching the sub-Rs5,000 price point, and telcos pushing for smartphones to boost data usage, how long will this dominance last?

Nokia was perceived to be a reliable brand with sturdy and durable hardware, and has an unparalleled distribution and service network. With product development not really in the India business’ hands, and product driving consumer choice now, we wonder if Balaji can do anything about the companys decline in the Indian market.

What Balaji can do, perhaps, is push for more devices in the Rs 8000-14000 price range, which appears to be becoming Android’s sweet spot. Nokia has focused on the top-end with Lumia, and the lower end of the market with their dual SIM and Asha phones, but have lost ground to Android phones in the aspirational segment. Lumia was given significant marketing support, but it doesn’t appear to have found many takers, and the announcement that Windows Phone 8 will not be supported by Nokia’s existing Lumia line will impact customer confidence in both. Our sense is that much of Balaji’s mandate is going to be a defensive approach – retaining retailer support, improving customer service (which was once something Nokia India could have been proud of), and ensuring that Indian OEM’s don’t eat into marketshare at the lower end.

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    © 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ