Can’s blog post about Nokia loosing profits in the first quarter of 2012 due to the high competitive smartphone market reminded me of the concept of brand positioning and value propositions.
The smartphone’s market has some huge companies such as Apple and Samsung which launch innovative and even ‘revolutionary’ products every once in a while. Thus, it is very hard for Nokia to find a spot in the conceptual map of consumers. Its market share decreased from 40% a couple of years ago to 10%. Therefore, it is clear that consumers are appealed much more towards the point of differences of the competitors than to those of Nokia. This is probably the reason behind Nokia’s decision to change its mobile operating system from Symbian to Windows Phone software, made by Microsoft. The extremely high competitiveness forced them to try to innovate their products too. However, this strategy was clearly unsuccessful since instead of gaining more market share, consumers disliked the change of software in the new product Lumia and so sales dropped significantly.
It is very likely that the demand for Nokia’s phones stays low for a long time since it is is extremely difficult to change the conceptual map of consumers regarding a product, once this has successfully established itself.
