One out of five cellphones sold is unlicensed copy: Nokia
HELSINKI |
HELSINKI (Reuters) - One out of every five cellphones sold in the world are illegal or unlicensed copycats, hurting the position of producers like Nokia in emerging markets, the world top manufacturer by volume said on Friday.
"It is mostly China-originated, but it is global. It is not only in Asia, but also in Latin America and even in some parts of Europe," said Esko Aho, a member of Nokia's executive board.
Surging growth of no-brand manufacturers coupled with growing smartphone sales boosted third-quarter cellphone sales 35 percent, Research firm Gartner said in November. It raised its outlook for growth in 2010, which it forecast would top 30 percent.
Gartner estimated grey market share had increased to even above 20 percent, but many other market followers have doubted the estimate.
(Reporting by Tarmo Virki; Editing by Mike Nesbit)
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According to an earlier report by Tarmo Virki of Reuters this week Nokia’s results for the year 2010 may prove to be disappointing. Nokia’s profit is likely to be hit by shrinking market share in its traditionally strong low-end basic mobile phones segment especially in the emerging markets of Asia, Latin America and in some parts of Europe too. For example, Nokia’s market share in its second largest market- India has halved from 60% to about 30-32% within a year. Undoubtedly, the “no-brand” grey mobile phone has eroded some of Nokia’s market share in the poor developing countries of the world. This market erosion has been made possible because most of those countries have poor legislation and non-existent governmental control over the mobile phone operators in those countries. Cheap basic mobile phones without valid IMEI- identification codes or with fake codes can still be used in such uncontrolled emerging markets.
India banned the use of such illegally produced mobile phones without IMEI codes over a year ago. So, in fact Nokia’s huge loss of market share in India last year cannot be wholly explained as being mainly due to these “no-brand illegal mobile phones” as the honourable Mr. Esko Aho wants us to believe.
This simplistic explanation of market share erosion by no less a person than Finland’s ex- PM Mr. Esko Aho seems to be a shabby cover up for other failed marketing and product portfolio strategies of Nokia in emerging markets.
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