2007 Nokia Analysis

Lee, Jin Hyun l Product Design 2 , IDAS

INDEX
About Nokia

Future Market of Mobile Devices

3 Values of Nokia

New Mobile concept Development

Future of Nokia

About Nokia


3 Values of Nokia

New Mobile concept Development

Future of Nokia

Nokia Value
About Nokia

Customer Satisfaction
Nokia는 헬싱키에서 북서쪽으로 200Km쯤 떨어진 인구 2만 8,000명이 사는 소
도시의 이름으로, 핀란드말로 ‘Soot Marten (검은 단비)’ 라는 뜻을 가지고 있다.

Respect for the Individual

Achievement

Continuous Learning

Strategic Marketing , International Design school for Advanced Studies

About Nokia

History of Nokia

1865 The small pulp factory called Nokia about 150km away from Helsinki is the main factory built by
Fredrick Ideestam

1898 Rubber Corporation in Finland
1912 Electric Wire Corporation in Finland
1967 Integrated of Nokia Group
1960 Discover the possibilities of the communication industry and spend all energies on the
industry’s aim
1964 Produce a radio phone
[Concentrated on core competence on multi enterprise
1966 Produce a long distance and informational communications ]
with car phone
The beginning industries The present time
Tires
The others
Shoes
Supply of electric power Local area network
Customer Transmission system
Electric home appliances Wire network
Material management
Wireless network
Electric Wire
GSM network
Machines
Multimedia
Robot
Internet
Construction
Digital telephone
Paper Making
Cellular phone
Chemistry
Base station
Telecommunications Reference : Toward Telecommunication, Nokia, 1999


About Nokia

1967 Start on the development of digital technology
1969 Succeed in development of digital transmission system,’DX200’
(DX200 still use of network switch on wire and wireless)

1981 Start on the production of cellular phones
1994 Launch the world’s first GSM, TDMA services, etc.

9110 Sales Volume
(ten thousand)
16.8% Operating profit (%)

4530
Reference :
3480 Josun Times
- 4.8
26.05.2005
13.0
1580
6.6 Image by Company Brochure 2006 of Nokia

Motorola Samsung LG
Nokia
[ Nokia of the World market share 36.2%]
[The results of mobile industry (01-04.2007) ] Samsung(13.8%),LG(6.3%)


About Nokia

Nokia Way

Build up core business
01

• Abandon Tires, Cables, Electric Power and TV industries, etc.
• Concentrate on the telecommunication industry (Cellular phone business)

Connecting People
02

• Everybody can get information whatever they want and wherever they go
• Recognize mobile devices for all , it is not only for business man early.

User centered design and communication
03

• Emphasis on the life style and user centered design communication


About Nokia

Nokia Way

Financing Differentiation
04

• List of New York Stock in 1994
• Abolish the discrimination between common stocks and preferred stocks in 1997
• Market total price of 122 billion Euro in the end of 2000
• Extension R&D investment for global market and build up core business

Nokia’s New Enterprise Model
05

• Importance of the product innovation as well as organization innovation and process in this age
• Introduction of innovation system : make the feeling of solidarity between a dealer and Network buyer

Holistic Way of Thinking
06

• Active sales support system and exchange of information with co-partners
• eg. Nokia House is built of 26,000 units of clear glasses that means Openness


About Nokia

“Being number 1 in the cell phone market is not
about developing new brand first but the system
of our innovational organization advances
our competition.” - Jorma Ollilo , Pre president of Nokia


About Nokia

The Innovation system of Nokia

Development R&D Management
of products

• Manufacturing system with flexibility and • One third of employees • with the structured 3 levels of
shareable knowledge decision-making in project, subgroup,
• 11~12% of annual sales R&D expenses
or corporation balanced structured is
• countermeasure in changeable market fixing
maintained
by manufacturing system and network • Firm research center: general research
• Meritocracy
• Not just out-sourcing, maintenance of 45%, 65% of total research development
• promote to share the knowledge by
partnership progress, 25% of foreigners form
Job rotating and defend individualism
• Develop together and share the • make a close network with other
and blocked culture of organization
information clearly companies and universities : The
• Annual finances should be
performance of development and basic
• Possibilities of a rational and fast
research minimized to 6months
decision
• entrust the result of research to an expert • Nokia Value
• Since there are no semiconductors and
self affiliated factories, continuation of
technological innovation and maintain
intimate relationship with parts industry
corporation


The faster same quality of the product strategy by mutual benchmarking

• Making up for the weak points and minimizing of failure possibilities by benchmarking to leading company
• If it focus on the benchmarking, there will be growing concern about the homogeneity of the product strategy
• The loss of the differentiation of the product strategy with competitive companies
• It brings about the ephemeralization of the product which is a position of advantage

Eg. Slim and conversance mobiles of similar types like a ‘Razr’ of Motorola

Nokia
Samsung Samsung
LG
Motorola

• It is more important to design inside of device than outside because it is no longer
differentiation in prices, qualities and general functions.
• More important to design of the mobile platform ( eg. User Interface, UGC Tools, Full
Browsing, etc.)


Getting more deeply competition with new media

• Fierce competition to be acknowledged as a standard technology of the world by the advent of new media
eg. T-DMB of KT, TV(DVB-H) of Nokia , Media flow of Qualcomm, etc.
• Keen competition to be a standard of mobile communication technology of the next generation
eg. ‘Wiremax Evolution‘ of Samsung and Intel, ‘3G LTE’ of 3GPPP and ‘MBWA’ of Qualcomm

• It needs to adopt the standard technology and build skills of the total network



Web 2.0 & Mobile 2.0

• Mobile 2.0 means that Web2.0 is realized.
• Five sixth of the world population who never use PC can use the internet with mobile device in the future
• Google and Yahoo take part in the mobile search market positively
• Prediction of the rapid growth on the mobile advertisement market

[Cooperation between internet and mobile] [Expected Mobile AD Market in 2011 ]

[relationship of Mobile and Web2.0 ]
$4.5billion

$ 1.5billion

2006Year 2011Year
Reference : LG
Reference :
Economic Research
Reference : Strategy Analyst Pyramid Research

• It needs to overcome the limitation of the mobile for the realization of Web2.0 services
• Design for Small screen, innovation of an input ways and enhance the usability


Destruction of industrial territory

• Destruction of territory on the manufacturing, internet and mobile communications industry
• keen competition for extension of the point of contact with a customer by conversance
• Importance to the platform that can be a compatibility of service or a particular technology
• Construction of the entry barrier in concert with other companies`
eg. Symbian

LG has a built in Symbian OS and Full Browsing

• It needs to make an effort to ensure a position as a leading company with a platform strategy



Rapid increase in global media market and the keen competition of contents

• Activation of the digital media generation who enjoys the contents as many as possible with only one device
• combination of the media industry by spreading of digital media and a new technological development
• Activity of the global cooperation and M&A by breaking languages and barriers of media

The market of contents in the world
The market of VOD in the world
The market scale of
major contents
$ 12.5 billion

Newspaper

Internet
$ 1.7billion movie

Reference :
2006Year 2010Year
Price
Reference : Samsung economic research Video Waterhouse
Reference : Josun Times Coopers
and ,WPP

• It needs to develop strategic products and total services with media contents


3 Values of Nokia

Valued Value Value
Proposition Network
Customer

• Strategy of ‘Connecting People’ : Concentrating to supply mobile of a low price and extension of the market s
• Strategy of a high price and development of a high-class mobile,’Vertu’

High
• Vertu
Samsung

• Vertu
Motorola
The highest price : $ 88,300
The bottom price : $ 5,320
Sony Erickson
Price

• Nokia

Low • Mobile of a low price for diffusion
High
Low
Function


3 Values of Nokia

Valued
Valued Value
Customer Network
Proposition

• Vertical bureaucratism and officialism
Exclusion

• Payment of a low loyalty : 7% by the sales in a year
Decrease (Competitive company pays 11% by the sales in a year)

• Improvement in development of products by the cost control
• Thinking of user centered design and communication – Connecting People
Improvement
• We do not use the words “we are the best” even though we are best in this industry

• Aim at the mobile as a media platform with media contents in the entertainment
industry
• Offer of the mobile platform for advertisements -Nokia Ad Service, Nokia
Adverising Connetor
New
• Offer of the game platform for users of N-Gage
•Understanding of the market by Nokia innovation system and application for
development of products by the needs of customers


3 Values of Nokia

Valued
Valued Value
Customer Network
Proposition

Core Factors Priority Low Middle High

Consistency of Communication 2

Stron Partnership 10

Investment of Gllobal R&D 6

Innovative Culture of Organization 7

Holistic Network 9

Bland Value 3

Convergence 8

Maintenance of the bottom ASP 4

Standard of Platform 12

Payment of Loyalty 11

Price Control 3

Variety of Choice 1

Web 2.0 Services 5


3 Values of Nokia

Valued
Valued Value
Customer Network
Proposition

• Development of products by the powerful partnership and external projects
• Intensification of countermeasure in a changeable market by the constant investment of R&D
• Maintenance of the bottom price by the excellent cost control and proper functions
• Design communication with a strong effect of the brand
• Development of a mobile platform for user centered design


3 Values of Nokia

Value
Valued Value
Customer Proposition Network

Purchase Marketing Product
Manufacturing and Management

• Maintenance • Standard of Platform • Consistency of Identity • Product of Connecting People
of the bottom ASP (N,S Series) • Customer Centered and • Convergence and Devergence
• Nokia ASP : $ 110 • Unique of Price control Design Communication • Strategic Product
• Reasonable and various price • Payment of Low Royalty • Connecting People of Media contents
• Premium product, • Negotiation skill of Price • Application of Web 2.0 • Role of a media platform
the highest price • Financing Differentiation ( Eg. Sponsor by Nokia on • Focus on the Usability
• Strong Partnership the YouTube) • Simple and Stylish Design
• Global Manufacturing System • Focus on the Media
• Development of S/W Contents
• Development of Chip set


New Mobile Concept Development

Product Design Concept

Do not expect anything
The joy of not able to predict the design change of cell phones
Unexpected
with the saved data analysis only with the touch screen

Save and express your memory
The cell phone that is one of a kind of my own that records
Two Layer and recalls the senses of the past memories

Phone
It’s just for you
Memorable
Unique it bestows the value of my own which is designed with
unique concept according to the user



Core Benefit 01 It can set individually up the variety interface that is analyzed the SMS especially stylish typography

Unexpected

You can design a stylish typography by taken SMS on your mobile



Core Benefit 02 It shows individual images that user takes a picture by oneself and picks one on the AMOLED screen

Unique



Core Benefit 03 It can enhance the user experience that the function of interface start touching point by finger on the mobile

• Interface of Two Layer : The active and flexible menus show on the screen that you took a picture own yourself
• It is changed the interface on the screen when you take a picture



Core Benefit 04 It can use to enjoy photos and videos that you are taken wherever by function of projector in a charger

Memorable

270’ Rotation
Camera

Contact Sensor
Charger Chip

For a Desk For a Wall



Function & structure

AMOLED Touch Pad

Hold

Multi
Button
Camera Controller

Plastic
Menu UV Coating
Button

Aluminum
< Front View >
< Side View >
Charger Chip
< Perspective View >

< Bottom View >



Function & structure
270’ Rotation Projector
Screw Hole
Camera Lens

On Lamp

< Side View > < Front View > < Back View >

•Multi button
Sound Volume Controller
•Play and pause



3D Modeling


Nokia is an experimental enterprise in the next generation.
They always try a test and revision and try to experiment
again with the results. It is repeated the same progress
several times.
There are surely energy and passion in managements and
- Why Nokia is the world best -
also employees.

References
• 노키아는 왜 세계 제일인가 / 다케스에 다카히로 지음,신원식 역/ 동방미디어
• CEO에서 사원까지 마케팅에 집중하라 / 니르말야 쿠마르 지음,김상욱,전광호 편역/김영사
• 핀란드 들여다보기 / 이병문 지음 / 매일경제신문사
• 북유럽 디자인 경영 / 이병문 지음 / 매일경제신문사
• 조선일보 경제면
Mind and culture of the passionate
• LG경제연구소
• and 기업 브로셔 2006
노키아 challengeable enterprise


With the balanced organization and the flexibility of organizational changes, it blocks the stiffness of the organization and promotes revitalization

“The reason for negative prospects of major corporation undertaking merger is
major corporation undertaking is not ethical for Nokia for a cultural reason. Nokia
does not want to merge with a larger corporation and have climate of the
.”
organization be broken. It is also like breaking the core of growth factor
- Jorma Ollilo , Pre president of Nokia-


References
and
ike a Jazz B
L
“There is one music and we have to play the same music.
However, An employee can play and compose extempore
the music. How fun it is, isnt’ it?!”
- Unia Hokanen, vice president of Nokia


Multinational corporation which has venture culture
even though it is not a venture business

General Corp. Cyber Corp.

• Brand • Speed
Nokia
• Organization • Challenge
• Management • Flexibility

If the IT industry’s today’s idea is tomorrow, then the change with a fierce speed arises .
It means a failure that is intoxicated with the joy of success.

Maintain the speed of decision + Keep the individual passion

Nokia Value is having clear value and vision of the corporation and continuing the firm traditional corporation’s organization. Also by
absorbing the cyber venture business, it is revolutionizing itself faster.


Nokia story continues...

Mobile devices for all

- Nokia leads the global device market

- Take back and recycling

Becoming the world's most loved and admired brand

- Ever closer to people
ing
okia’s ongo
N
Very human technology

The foundation for innovation

A world-class team

- Going Green

Enhancing our supply chain

A catalyst for change

- The list by Company Brochure 2006 of Nokia


References

References
• Why Nokia is the World Best / Dkeska Dakehiro
• Focus on the Marketing / Nirmalya kuyar
• About Finland / Lee, Byung Moon
• Design Management of Nordic / Lee, Byung Moon
• Economic of The Josun Times
• LG Economic Research
• Corporation Brochure of Nokia 2006


2007 Nokia Analysis

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2007 Nokia Analysis