Dec 6, 2008

Business - In Conversation with Nokia's Robert Anderson

India, after emerging as the second largest market for the world’s largest handset maker Nokia (by volumes), is steadily working its way up on the value chain also. This is because the Indian market is perhaps the last of the high growth markets left in the world.

Besides, the country is adding over 10 million new users a month, the highest in the world, which translates into robust handset sales. ET spoke to Nokia’s executive VP (devices, finance, strategy and sourcing) Robert Anderson on his take on both the domestic market as well as the global scenario.

Do you feel that the global slowdown in handset sales will have a similar impact in emerging markets such as India? How important is the market here for you?

We still maintain that handset sales will be up by 10% this fiscal. This is good, but lower than last year’s figures. But emerging markets, where communication devices are fast becoming a daily necessity, the sales will continue to grow. We are doing our part to make the handset attractive to customers in emerging markets even during such times (of slowdown). This is the primary reason why we offer solutions and services (and not just handsets). For instance, we have just unveiled ‘Nokia life tools’, an agricultural information and education service for emerging markets today. The fact that we have chosen India yet again for the global launch of our new handset offerings for emerging markets is a reflection of the importance of this country. India will add 229 million new users over the next three years, of which 60% will come from rural India.

The new handsets focus on bringing internet to the customers via these devices. Nokia has always talked about internet on the mobile as the next biggest challenge. How do you plan to address this?
Nokia cannot change the internet, but we can definitely change the way you access the net on the handset. We can give you the internet on mid and lower end handsets and ensure that this facility is not restricted to those customers who use high-end handsets. For instance, in the case of rural India, Google may not be the most relevant site. Instead, the users will need a handset that will allow them to use services like weather forecasts in a format comfortable to them. Therefore, the handset, the interface and services, which includes content, must all be addressed together before the masses will use internet on their mobiles and we are working to make this a reality. In emerging markets such as India, the biggest challenge for Nokia is to get people to buy mid- and high-end phones.

Currently over 60% of your volumes are driven by entry level handsets. How important a challenge is it for you to change this ratio?
Yes, entry level handsets drive sales here, but it is crucial to note that this is a market that is also driven by aspirations. We have added an aspirational aspect to our products. This is best illustrated by the fact that for the first time ever, the replacement market is now larger than the entry market in countries such as India. We are also adding attractive designs and features to all our mid level handets to make them attractive to even first time users. The results will come over time.

What is your take on Near Field Communications (NFC) or the mobile wallet? Do you see this as the next big revolution on the mobile handsets? By when do you see mass adoption of this, where people can swipe their handsets on buying products or services?
We believe that NFC has the potential to be a technology that can change the way we do things today. We are very bullish on this will work with potential partners on this platform. There are several applications that become attractive if you look at from an NFC point. Recently, we launched some handsets that has the NFC feature to some extent.

In the UK, you recently gave unlimited music downloads with certain handset models. Will you replicate this business model in India?
We will offer unlimited music downloads when Nokia launches its music phones in India sometime next year. We are in talks with all major music labels in India to enter into deals with them. We have not signed any deals here yet. Globally, we have agreements with all major music labels.

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