The paper "Antecedent Factors in the Mobile Phone Industry" is an excellent example of a research proposal on marketing. The mobile phone market has become increasingly competitive over the 25 years of its existence with about 1 billion units being sold a year (Woyke, 2008). The demand for mobile phones is not simply as a communication device but more as an entertainment and fashion product, having encompassed features like camera, multimedia messaging, internet access color screens and so on. Till the end of 2007, worldwide sale of mobile phones was 289 units, 15 percent higher than the previous year.
Although Samsung from Korea had taken over the American company Motorola, becoming number 2 in the global market, Nokia, the Finnish company, continues to be the leader. Nokia has not only introduced new mobile models, but it has also engaged in aggressive price cuts, with the average price of its handsets reduced to Euro 82 from Euro 90. In the first quarter of 2007, Nokia’ s shipment of mobile handsets was 252, only 12 percent higher than the shipment in the same quarter the previous year, according to Strategy Analytics.
Till then, the quarter to quarter growth rates had been over 20 percent. Although by 2007, Nokia’ s market share was 36 percent, compared to 33 percent the previous year (Ecommerce Times). Source: Guardian, 2007 Nokia has targeted low-income customers to increase its market share by reducing the average price and increasing the number of low-priced products so that 40 percent of its revenues are derived from these products in low-income markets like Asia and Latin America (Ewing, 2008). Hence, Nokia has a 46 percent market share in Asia and 66 percent in Africa.
Competitors have observed the rise in replacement demand in mobile phones with new features in these markets. Sony Ericcson of Japan has already introduced two new models, including AM/FM radio with speakers. The mobile phone market is a global one, with companies from various countries competing in all markets. Although Nokia, is the global market leader, it faces stiff competition from companies from other countries. The new entrants from Asia – Samsung and Sony Ericcson – have been providing stiff competition to Nokia since 2004, particularly in Asian markets.
The fiercest threat that Nokia now faces is from a new company, Canada’ s Research in Motion, which introduced the Blackberry as well as from Apple, which has graduated from a computer company to a communication one with its iPhone that has very attractive design elements (Woyke, 2008). The main driver of mobile phone demand of late has been the markets in India, China, Africa and Latin America (PMN, 2007). These markets contribute to a large proportion of new subscribers globally as well as the replacement demand from new customers who bought their first mobile 18 to 24 months ago.
Nokia has been able to capture both these segments in these emerging markets.