UBI- Business Intelligence Concepts Fall 2005

Presented by: Arend MulderRicardo SerranoHelmi Soosaar

Competition for the leading position in the mobile market:

An in depth analysis of key factors

Mobile Industry Development

Global sales of mobile handsets, m

0100200300400500600700800900

1999 2000 2001 2002 2003 2004 2005 2006*

Mobile phone sales will reach 779 m units in 2005.

More than 100 M 3G phones will be sold in 2006. More than 200 m smartphones will be sold in 2008.

0

5

10

1520

25

30

35

40

NokiaMotorolaSamsungLGSony EricssonSiemens

Screening & Evaluation ofrelevant information

Key Success FactorAnalysis

Recommendation & Action

Analysis & Interpretation

Sources

Assumptions & Unknowns

Key IntelligenceTopic

Based on Key factors which company has the edge

Motorola paving the way in emerging mktsMotorola is pioneer & will dominate

Strategy to maintain competitive position

Competitive Intelligence Information Flow

HRA® Model of SuccessFactors

"Strong growth in emerging mobile phone markets, such as South America and Africa, is driving demand for increasing numbers of entry-level devices, precisely the mass-market segments where Nokia and Motorola are among the strongest.

"Some 80% of the world's population has mobile phone coverage, but only 25% have a mobile phone. That is 3 billion people who have coverage but cannot afford mobile communications,

India could add 150 million

subscribers by 2010!

"By 2006, we could see a quarter of Africa's billion users."

Emerging markets

The growth of global mobile market : 1990 11m today 2 billion and in five years 3 billion!

Share of growth

Latin America

8%

Other Growth market 22%

Rest of Asia

Pacific 25%

China 25%

Africa/Mid-East 20%

Largest telecom market in the world

3G in 2006:Growthup to 8 b by 2008

Youth!15 % Growth till 2010

50 % from AsiaPacific Growth

Prospects: 250 M Chinese moving to cities in thenext 15 years

2005: 400 M 2010: 650 M50 % population

China - one of the mostcompetitive markets

Amoi 4 %

NOKIA 22%

Lenovo 5%SonyEricsson 5%

??? 20%

MOTOROLA 15%Samsung 10%

TCL 4%

Haier 3%

Lower end ofmarket: 30% of consumers

Konka 4%

NingboBird 8%

Leader with 22% market share

2.2 billion investments during past 20 years increasing manufacturing & R&D capacity

Strategy: maintain leading position, retain focus on hand-set business, reach the peripheria and providetailor-made high quality solutions

Ollila: »China becomingour most important market in the next 3 years » « 3G will provide us an

opportunity to improveour positions »

Currently 15 % market share -Reach 20 %

Invested more than $ 3.4 b since 1987

New build-up of sales network

Advantage: A good corporate citizen

The best in long-term commitment; most innovative; best adapted to the Chinese market; best employer in China (Source: Fortune magazine, Chinese edition)

We ve now tripled our network in the last year, he said. This gives us a platform as we launch all our new products. It gives us a much more prolific footprint to capture more share.

One to One ComparisonIn China

45Brand

25

4

5

4

4

4

Motorola

NokiaEdge

29Total

5Political relations

4Cultural Awareness

5JV/Alliances

5Sales volume

5Market Share

Nokia

1

2

4

4

4

India

High 012345 Low

Low 012345 Adv

High 012345 Low

Many 012345 Few

Low 012345 High

151017Total

13Competition

23Infrastructure

23Politics

23Legislation

35Growth

potential

AfricaChinaInfluencing

factors

Drive to technology

Technology strategies

3G products

Applications

Software

Strategies for innovation

PatentsNokia has more out-house innovationMotorola has more in-house innovation

Motorola has the better application

Nokia has the better outhouse contracts (Microsoft)

InternetEmailRoute plannerServices (weather reports, news channels etc )

Nokia is better in touch with the market

Video

Music

Games

Portable personal storage

Online personal storage

Online Archives

Universal search engine

Utility computing

The domain of Nokia. They have the outhouse contracts and the best

knowledge what the market wants

Video

Music

Games

Nokia1519Total

Nokia45Software

Nokia35Applications

Motorola543G products

Nokia35Technology Strategy

EdgeMotorolaNokiaKey Success Factors

Customer Preferences

Product Portfolio & Quality

Time to Market

Marketing Strategies

Uninvolved

New Life Harmony

Voice as a Link

Adopters

Intense

Forerunners

Nokia s Product Portfolio, Quality & prices

From basic features to business readyPush to talk to internet navigationHelps users track usageLonger talk timesPrice range (70 to 100 euros)

Motorola s Product line, Quality & Prices

Focused on battery life and basic functions like SMS. FM radio Large display and durable designVery simple, bare essentialsPrice range (25 to 50 euros)

"China was cool for us before

anyone else thought it was cool."

Over 20 new products introduced in 20055 new models for holiday seasonMillions spent on Time to Market adjustmentsIncreased distribution network

Leading the industry in new product launchTimely delivery of new product is key business strategyNew manufacturing facilities

Marketing Strategies Nokia

Focused on Handset Manufacture

only

EnhanceProduct Portfolio

Increase Distribution

Channels

Adjust Preferences for

specific markets

CustomerSatisfaction

Focused on replacement

Increase Commitment to

Emerging Markets

ImproveCollaboration on Designs

EnsureAccountability

andQuality

Aggressive Pricing

Motorola s Marketing Strategy

Functionality&

Adaptability

Low Prices

Market Segment:

Youth

Flat Distribution

Network

LogisticsSupport

Focus onMass

Market

Customer Preference

We have designed and developed phones for the African mass market and is loaded with a list of unparalleled features such as longer battery life, large displays and is above all affordable,"

Won GSM Bid for a 2nd time

Unicom $$$ Contract Pricing Strategy

under 30

Investments in R&D Leader in

Target Mktg

Increase Channel

Distribution

Pioneer in entrance tomarkets

JV to become largest

manufacturer

billions spentin R&D

investment

Strategic Alliances with local operators

In countrymanufacturingfacilities

Increaseddistribution

network

Numerous newsales offices

Nokia2628Total

Nokia45Penetration of Markets

Even55Marketing Strategies

Nokia45Time to Market

Motorola54Customer Preferences

Nokia35Product Quality

Motorola54Product Portfolio

EdgeMotorolaNokiaKey Success Factors

Nokia6676Final ranking

Nokia2628Marketing Strategies

Nokia1519Technology

Nokia2529Dominance of Emerging Markets

EdgeMotorolaNokiaKey Success Factors

Nokia

Nokia

Nokia

Marketing

Apply the Olympic medal focus strategy

Expand coverage areas

Emerging Markets1. Break out of cities to rural areas: focus on areas, where the cost of building wireless infrastructure is more cost-effective than in building a fixed line (China/India)

2. Focus on Youth: imaging and games (China/India)

Technology1. Improve pioneering

2. Increase sophisticated applications

Marketing

Introduce the voice of the customer into products

Nurture current network of alliances and distribution

Emerging Markets1. Focus on low-cost market (Africa/China)

2. JV/Liaise with locals (India) Build position as Good Corporate Citizen (India, Africa)

Technology1. Look outside

2. Know your environment