A PROJECT REPORT ON

NOKIA’S CONTRIBUTION TO

INDIAN ECONOMY

NAME : ROHAN. D. NIKAM

ROLL NO : MBACORE 013096

DIV : CORE D

SUBJECT : INDIAN ECONOMY

SUBMITTED TO : DR. SAPNA. S

CONTENT

1. Introduction2. Introduction of Nokia3. History of Nokia4. Future of Nokia5. The Vision Of Nokia 6. Nokia Today 7. First Mobile Phone 8. SWOT Analysis of Nokia

Strengths Weaknesses Opportunities Threats

9. Economy Of India10.Nokia’s Contribution to Indian Economy11.Nokia’s Share in India Nokia in India What Analysts Say Current Situation The Problem

INTRODUCTION

Definition of Mobile phone:

The cellular telephone (commonly “mobile phone” or “cell phone” or “hand phone’) is a long range portable electronic device used for mobile communication. In addition to the standard voice function of a telephone , current mobile phones can support many additional services such assess or text messaging, email, switching for access to the Internet, & MMS for sending and receiving photos and videos.  Most current mobile phones connect to a Cellular network of base stations, which is in turn interconnected to the public switched telephone networks phones. Cellular telephone is also defined as a type of short-wave analog or digital telecommunication in which a subscriber has a wireless connection from a mobile telephone to a relatively nearby transmitter. The transmitter's span of coverage is called a cell. Generally, cellular telephone service is available in urban areas and a long major highway. As the cellular telephone user moves from one cell or area of coverage to another telephone is effectively passed on to the local cell transmitter. A cellular telephone is not be confused with a code less telephones.

INTRODUCTION OF NOKIANokia Corporation (OMX:NOK1V,NYSE:NOK,FWB:NOA3) is a Finnish multinational communications corporation that is headquartered in Keilaniemi, Espoo a city neighboring Finland's capita Helsinki.  Nokia manufactures mobile electronic devices, mostly mobile telephones and other devices related to communications, and in converging Internet and communications industries, with 130,000employees in 120 countries, sales in more than 150 countries and global annual revenue of over €38 billion and operating loss of €1 billion as of 2011. It was the world's largest manufacturer of mobile phones in 2011, with global device market share of 23% in the second quarter. Nokia produces mobile devices for every major market segment and protocol,  including GSM, CDMA, and W-CDMA(UMTS). Nokia offers Internet services such as applications, games, music, maps, media and messaging through its Ovi plat form. Nokia's joint venture with Siemens, Nokia Siemens Networks produces telecommunications network equipment, solutions and services. Nokia also provides free-of-charge digital map information and navigation services through its wholly owned subsidiary.

Nokia is a public limited-liability company listed on the Helsinki,  Frankfurt , and New York stock exchanges, and plays a very large role in the economy of Finland, accounting for about a third of the market capitalization of the Helsinki Stock Exchange (OMX Helsinki) in 2007.

The Nokia brand, valued at $25 billion, is listed as the 14th most valuable global brand in the Inter brand/Business Week Best Global Brands list of 2011. It is the 14th ranked brand corporation in Europe (as of 2011), the 8th most admirable Network and Other Communications Equipment company worldwide in Fortune's World's Most Admired Companies list of 2011, and the world's 143th largest company as measured by revenue in Fortune Global 500 list of 2011. In July 2010,

Nokia reported a drop in profits by 40%, which turned into an operating loss of €487 million in Q2 2011. In the global Smartphone rivalry, Nokia held the 3rd place in 2Q2011, trailing behind Samsung and Apple. 

On 11 February 2011 Nokia announced a partnership with Microsoft; all Nokia smart phones introduced since then were to run under Microsoft's Windows Phone (WP) operating system. On 26 October 2011 Nokia unveiled its first Windows Phone handsets, the WP7.5 Lumia 710and 800. The Nokia House, Nokia's head office located by the Gulf of Finland in Keilaniemi, Espoo, was constructed between 1995 and 1997. It is the work place of more than 1,000 Nokia employees.

Type Julkinen osakeyhtiö

(Public company)

Traded as OMX: NOK1V

NYSE: NOK

FWB: NOA3

Industry Telecommunications equipment

Internet

Computer software

Founded Tampere, Grand Duchy of Finland (1865)

incorporated in Nokia (1871)

Founder(s) Fredrik Idestam

Leo Mechelin

Headquarters Espoo, Finland[1]

Area served Worldwide

Key people Risto Siilasmaa (Chairman & CEO)

Timo Ihamuotila (President and CFO)

Stephen Elop (EVP, Devices & Services)

Products Mobile phones

Mobile computers

Networks

(See products listing)

Services Maps and navigation, music,

messaging and media

Software solutions

Revenue  €30.176 billion (2012)

Operating income  € -2.303 billion (2012)

Net income  € -3.106 billion (2012)

Total assets  €29.949 billion (2012)

Total equity  €8.061 billion (2012)

Employees 97,798 (2012)

Divisions Mobile Solutions

Mobile Phones

Markets

Subsidiaries Nokia Solutions and Networks

Navteq

Website Nokia.com

HISTORY OF NOKIA

Established in 1865 as a wood-pulp mill by Knut Fredrik Ides tam on the banks of Nokianvirta River in Finland.

Finnish Rubber Works acquired Nokia Wood Mills, Telephone and Telegraph Cables.

Nokia Corporation created - 1967 -paper products- car tires- personal computers-cables.

Nokia began developing the digital switch (Nokia DX 200) which became a success.

1991 Nokia - agreements to supply GSM networks – nine European countries.

August 1997 Nokia - GSM systems to 59 operators in 31 countries.

FUTURE OF NOKIA

By the year 2012 a quarter of all content will be user-generated and passed between friends, rather than being created and distributed by today's media brands, according to interviews with "trend-setting consumers”. The Future Laboratory spoke to 9000 consumers on behalf of Nokia, all of whom are described as "active users of technology" and thus can be trusted to tell us what the world's going to look like. As Nokia's Vice President, Multimedia, Mark Selby describes it thus:"We think it will work something like this; someone shares video foot age they shot on their mobile device from a night out with a friend, that friend takes that footage and adds an MP3 file - the soundtrack of the evening - then passes it to another friend. That friend edits the footage by adding some photographs and passes it onto another friend and so on."All of which will be done on their mobile phone, obviously. Driving users to prefer content mashed up by friends, as opposed to professionally- produced, are four trends which The Future Laboratory and Nokia have identified through their research. Immersive Living reflects the way people are always on-line, while Geek Culture is a reflection of how everyone wants high-tech toys these days – at least, all the people interviewed for this study’s technology for girls -apparently not just technology for boys painted pink – and Localism sees users taking pride in content produced by their locality. All in all it's remarkable how closely this research matches Nokia's ideal vision of the future. Consumers using mobile phones to create and mashup content, taking power away from the media brands and placing it in the hands of those running the portals and controlling the mobile user experience.

The Vision of Nokia:-“Our vision is a world where everyone can be connected. Our vision is to ensure that 5 billion people are always connected at any given point and to achieve 100 Fold more network traffic.

Nokia Today:-Head office in Finland; R&D, production , sales, marketing activitiesaround the world.

World’s #2 manufacturer of mobile devices, with 15% share in 2007

112,262 employees. Sales in more than 150 countries

First mobile phone

The Mobira City man 150, Nokia's NMT-900mobile phone from 1989(left), compared to the Nokia 1100 from 2003. The Mobira City man line was launched in 1987.

The technologies that preceded modern cellular mobile telephony systems were the various "0G" pre-cellular mobile radio telephony standards. Nokia had been producing commercial and some military mobile radio communications technology since the 1960s, although this part of the company was sold some time before the later company rationalization. Since 1964, Nokia had developed VHF radio simultaneously with Salora Oy. In 1966, Nokia and Salora started developing the ARP standard (which stands for Auto radio puhel in or car radio phone in English), a car-based mobile radio telephony system and the first commercially operated public mobile phone network in Finland. It went online in 1971 and offered 100% coverage in 1978.

In 1979, the merger of Nokia and Salora resulted in the establishment of Mobira Oy. Mobira began developing mobile phones for the NMT (Nordic Mobile Telephony) network standard, thefirst-generation,first fully automatic cellular phone system that went online in 1981.In 1982, Mobira introduced its firs tcar phone, the Mobira Senator for NMT-450 networks.

Nokia bought Salora Oy in 1984 and now owning 100% of the company,changed the company's telecommunications branch name to Nokia - Mobira Oy. The Mobira Talk man, launched in 1984, was one of the world's first transportable phones. In 1987, Nokia introduced one of theworld's first handheld phones, the Mobira City man 900 for NMT-900networks (which, compared to NMT-450, offered a better signal, yet as horter roam). While the Mobira Senator of 1982 had weighed 9.8 kg(22 lb) and the Talk man just less than 5 kg (11 lb), the Mobira City manweighed only 800 g (28 oz) with the battery and had a price tag of 24,000 Finnish marks (approximately €4,560). Despite the high price, the first phones were almost snatched from the sales assistants' hands. Initially, the mobile phone was a "yuppie" product and a status symbol. 

Nokia's mobile phones got a big publicity boost in 1987, when Soviet leader Mikhail Gorbachev was pictured using a Mobira City man to make a call from Helsinki to his communications minister in Moscow. This led to the phone's nickname of the "Gorba".

In 1988, Jorma Nieminen, resigning from the post of CEO of the mobile phone unit, along with two other employees from the unit, started a notable mobile phone company of their own, Benefon Oy (sincere named to GeoSentric). One year later, Nokia-Mobira Oy became Nokia Mobile Phones.

 

DIFFERENT TECHNOLOGY:-

Bluetooth Technology GPRS Technology EDGE Technology JAVA Technology MMS Technology Mobile Browsing Technology

SWOT analysis of NokiaStrengths

Nokia world’s largest producer and manufacturer of cell phones as well as has the largest distribution network around the world.

It is also known for the Creativity, Innovativeness, durability & reliability.   It has very good financial position, higher return on equity (ROE), return on assets

(ROA) and net profit margins (NPM) Nokia leads the global cell phone industry Nokia dominates the world cellular industry because it has the Strong R & D

facilities. Nokia also possessing the all fashion strategies and four style new generation

characteristic from manufacturers It has diverse work force and advanced technology.

Weaknesses

It has declared its profits had dropped by 40 % in 2010. Nokia mobile phones prices are higher as compare to the prices of china mobiles

handsets. Nokia presence in the US cellular industry is very low and in Japan it has very weak

position. In India Nokia has few service centers and very appalling after sales service In Japan Nokia closed the mobile handset distribution and also canceled the

distribution of E71 handset due to low market preference.

Opportunities

In 2011, the global cell phone industry expected to grow by double digits Today, Asia-Pacific mobile phone industry is one of the fastest-growing industry in

the world. Developing countries like China, Bangladesh, India and Pakistan has enormous

demand potential. Nokia had a 50-50 joint venture with Siemens of Germany Youth wants the stylish aesthetics, fashionable handsets, it drive the new market for

players.

Threats

Consumers are becoming more complicated in the choice of handset due to new styles by china mobiles.

Difficult for sellers to differentiate their products and retain loyalty. Nokia is facing very strong price pressure from china and other mobile producers   Nokia is losing global market share after the arrival of several Chinese producers In the Asia/Pacific emerged competitive forces. Apple, RIM and the other different sellers have created strong pressure for Nokia.

ECONOMY OF INDIA

The economy of India is the tenth-largest in the world by nominal GDP and the third-largest by purchasing power parity (PPP). The country is one of the G-20 major economies and a member of BRICS. On a per-capita-income basis, India ranked 141st by nominal GDP and 130th by GDP (PPP) in 2012, according to the IMF. India is the 19th-largest exporter and the 10th-largest importer in the world. The economy slowed to around 5.0% for the 2012–13 fiscal year compared with 6.2% in the previous fiscal. On 28 August 2013 the Indian rupee hit an all time low of 68.80 against the US dollar. In order to control the fall in rupee, the government introduced capital controls on outward investment by both corporates and individuals. India's GDP grew by 9.3% in 2010–11; thus, the growth rate has nearly halved in just three years. GDP growth rose marginally to 4.8% during the quarter through March 2013, from about 4.7% in the previous quarter. The government has forecast a growth rate of 6.1%–6.7% for the year 2013–14, whilst the RBI expects the same to be at 5.7%. Besides this, India suffered a very high fiscal deficit of US$ 88 billion (4.8% of GDP) in the year 2012–13. The Indian Government aims to cut the fiscal deficit to US$ 70 billion or 3.7% of GDP by 2013–14.

The independence-era Indian economy (from 1947 to 1991) was based on a mixed economy combining features of capitalism and socialism, resulting in an inward-looking, interventionist policies and import-substituting economy that failed to take advantage of the post-war expansion of trade. This model contributed to widespread inefficiencies and corruption, and the failings of this system were due largely to its poor implementation.

In 1991, India adopted liberal and free-market principles and liberalised its economy to international trade under the guidance of Former Finance minister Manmohan Singh under the Prime Ministry of P.V.Narsinha Rao, prime minister from 1991 to 1996, who had eliminated Licence Raj, a pre- and post-British era mechanism of strict government controls on setting up new industry. Following these major economic reforms, and a strong focus on developing national infrastructure such as the Golden Quadrilateral project by former Prime Minister Atal Bihari Vajpayee, the country's economic growth progressed at a rapid pace, with relatively large increases in per-capita incomes. The south western state of Maharashtra contributes the highest towards India's GDP among all states. Mumbai (Maharashtra) is known as the trade and commerce capital of India.

NOKIA’S CONTRIBUTION TO

INDIAN ECONOMYNokia Solutions and Networks is the world’s specialist in mobile broadband. From the first ever call on GSM, to the first call on LTE, Nokia Solutions and Networks operates at the forefront of each generation of mobile technology. Our global experts invent the new capabilities our customers need in their networks. Nokia Solutions and Networks provides the world’s most efficient mobile networks, the intelligence to maximize the value of those networks, and the services to make it all work seamlessly.

Around the world, Nokia Solutions and Networks expects a 1000-fold growth in capacity at ever lower cost over the coming years with data consumption to 1GB per day per user by 2020, and the majority of this growth is expected to come from emerging markets like India. For Nokia Solutions and Networks, India is not just a high-growth market but also an innovation hub. The manufacturing operations, global delivery centers and research and development setups in India reflect Nokia Solutions and Networks’ unwavering focus on the country and enhanced proximity to its customers. Nokia Solutions and Networks is making strategic investments in India to further strengthen its local market position and tap the tremendous local growth opportunities in mobile broadband segments

Key factsFully indigenized operations and workforce - 15000+ people (direct & indirect) working at 50 principle offices and 177 locations -  committed investment of USD 100 million into India in 2008 which stands mostly invested

Global Services Hub . Two of its GDCs are in India at Noida & Chennai managing over 200 million subscribers globally

India’s largest international telecom infrastructure manufacturer with the first to manufacture 3G and LTE products locally

Two Global R&D centers in India. Bengaluru with 3000 people, supports 3G initiatives for the domestic market especially the Flexi platform, GSM/EDGE product management HQ is based in Gurgaon

220 million subscribers are under Managed Services for top 7 private operators in India, with Managed Services presence in all 22 circles with 160,000 sites under Managed Services - proven vendor agnostic Managed Services capability

Early TD-LTE player, selected by Bharti Airtel for network deployment in Maharashtra

Supporting India’s mobile data growth (growing at 92% YoY), Nokia Solutions and Networks is partnering with operators for making data the next growth driver

Recognition – Awarded ‘Top Managed Services Vendor’ in 2012 by Voice & Data, Aegis Graham Bell Awards 2012 for Innovative Vendor Telecom Product. Awarded “Best Managed Services Vendor” at the CMAI National Telecom Awards 2012

Nokia Solutions and Networks India has fully indigenized operations and workforce with 15,000 people (direct & indirect) at 50 principle offices and present in 177 locations. Nokia Solutions and Networks’ operations in India include marketing and sales to HQ offices in Delhi NCR and Mumbai; two of out three Global Delivery Centers (GDC) in Noida (Delhi NCR) and Chennai; manufacturing facilities (2G/3G/ 4G) in Chennai and a key global research and development center in Bangalore. Our global services hub, GSM-Edge product management, Service Management Capability Center and a Centralized Solution Support Center (CSSC) are also based in India strengthening our local presence further.

Market leadership 

#1 in carrier equipment (Voice & Data 100, 2012)

280 million subscribers via 230,000 sites are served by our equipment

#1 in Managed services 160,000 2G & 3G sites serving 220 million subscribers across 22 circles

#1 in GSM-R

30% market share in mobile broadband

#1 in Packet Core, critical for rising data usage

10 Indian operators rely on Nokia, including Aircel, Bharti, BSNL, Defense, Idea, Railways, Tata, Uninor, Videocon and Vodafone

Corporate Social Responsibility initiatives

Bridge the Gap’ program – apprenticeship opportunities for students in six New Delhi Municipal Corporation (NDMC) Schools

University collaboration across various institutes in India; Skill upgrade initiative through Graduate Engineering Training Program

Volunteering initiative at Bharti School Foundation, Ludhiana Disaster relief programs; training and employment for differently abled section of

society

As a responsible corporate citizen, Nokia Solutions and Networks India is focused on making a difference in a variety of areas key to the growth and development of India – these include education, women’s role in society, the environment, and community work (volunteering). Due to the size of our company’s deployments in India, the country is at the forefront of our efforts for greater energy efficiency not only to focus on reduction of

carbon emissions but also to help operators improve their business performance through savings in energy costs.

Nokia Solutions and Networks IndiaCorporate office7th Floor, Building 9A, DLF Cyber city, DLF Phase III Gurgaon – 122 002,Haryana, IndiaSwitchboard: +91 124 4504000

ContactsHead of India Region: Sandeep GirotraCommunications: Subhagata Mukherjeesubhagata.mukherjee@nsn.com

NOKIA’S SHARE IN INDIA

The mobile market in India is currently worth Rs 35,946 crore growing at 14 per cent year on year. Samsung is now the No 1 brand in the country having overtaken Nokia after registering a growth of 47 per cent last year. Indian brands such as Micromax, Karbonn and Lava have also made inroads into the market, mostly at the expense of Nokia.

The big change in the market has been the growth of smartphones with people increasingly happy to shell out a little extra for it. India is now the third largest smartphone market in the world with 9 million units sold last year. This accounts for 15 per cent of the total mobile phone handsets sold; the remaining 85 per cent being feature phones. In the smartphones category, phablets (screen size: 5 to 6.99 inch) now account for 30 per cent of the category.

The other big changes are reduction of prices of fast 3G wireless technology and the expected launch of 4G technology on a national scale. Riding on these changes, data consumption is expected to grow and this will, in turn, further fuel the growth of smartphones. This is also supported by trends in the US, where 62 per cent of the mobile subscribers use smartphones as of Q2 2013.

Smartphone Market-share India

Samsung leads the smartphone market share with 26 per cent and Micromax is a close second with 22 per cent, According to IDC, local smartphone brands now account for over half of all smartphones shipped into India. The Indian smartphone market is highly price-sensitive; in fact, around 70 per cent of the devices shipped are priced at Rs 14,000 or lower and 67 per cent of the devices shipped are priced at Rs 10,000 or lower.

Nokia in INDIANokia was one of the first handset companies to enter the India market in the early 1990s and the brand almost became generic to cell-phones. Its hold on the Indian market was far stronger than in the international market. Adding to this is the fact that the Indian mobile phone market grew at a scorching pace in the early 1990s, Nokia even started one of its largest manufacturing facilities in India. However, along with the rest of the world, Nokia lost its leadership position in India, unable to capitalise on the smartphone trend.

Current range of Nokia phones in India

Feature Phones

Number Series: These are basic feature phones within the Nokia portfolio. It has phones like 106, 207 and 515. Asha Series: These are also features phones but the differentiating factor is that the phone comes pre-installed with popular apps, and the memory and processing power is better than the number series phone. This competes with feature phones from Indian manufacturers such as Micromax, Karbonn, and Lava as well as foreign manufacturers such as Samsung and LG.

Smartphone

Lumia Series: This is the smartphone sub-brand from Nokia. The models go from 520 to 1020 each differentiated by processing speed, cost and other high-end features. It is based on Windows OS.

What analysts say

The drop of shares of Nokia is possibly one of the most analysed and written about cases and analysts believe Nokia lost shares due to a combination of reasons:

1. High on feature and competitively priced products from global majors such as Samsung, LG, Sony at the top end.

2. Entry of feature rich but cheap Chinese handsets under local brands such as Micromax and Karbonn at the lower end

3. Its inability to find a universal platform like Android for its smartphones. This, analysts feel, will hound Nokia much longer and much harder as the market continues to shift to smartphones from feature phones.

Current Situation

Facing competition and erosion from all sides, Nokia responded by cutting the prices of its feature phones, introduced the feature-rich Asha range and jettisoned its OS for the smartphones in favour of Windows OS in mid-2011 with the launch of Lumia range. The high-profile launch of the Lumia and subsequent marketing pressure has not really resulted in a reversal of fortunes for Nokia.

In early September 2013, Microsoft finally bought over Nokia’s handset business, which has raised even more questions on Nokia than it has answered.

The Problem

Industry feels that the Microsoft buy was meant to popularise the Windows OS and possibly fight Google phones in the market. However, given that the brand Nokia is leased to it for just 10 years, how will the company use the handset manufacturing facilities and the brand to further its objective.

The marketing team realises that currently Windows OS is definitely not the most popular and will, hence, hamper the growth of Nokia handsets, especially in the smartphone segment. At the same time, unless the Nokia smartphone share grows rapidly, the objective of popularising the Windows OS will not be achieved. It is obvious that the Microsoft board is only keen to popularise the Windows OS and not just increase Nokia handset sales.

You are the head of the Mobile Solutions business at Microsoft and have been asked to share your views on what should Microsoft do from here with respect to Nokia handsets division and why. The objective for you is to make Windows the strong second as the operating system for phones, if the not the first, during this 10-year period. As both companies in question are live companies, you can gather additional information on their current strategies from secondary research.