Warning... on topic posting. You're right, Dave, I think the next year will tell us a lot about the GSM vs. CDMA marketshare battle in USA, China and Japan. Then we can have a bitter dispute about how to interprete the outcome.
Anyway, there's been an avalanche of Finnish articles on Nokia's new model sales in Europe. It appears that the 5100 is sold out all over Europe. Finnish newspapers, naturally, have used this as an opportunity to attack Nokia, which seems to be their favorite pastime these days. The contention is that Nokia must have miscalculated the demand. This is the same situation we saw three months ago with 6100, which also sold out immediately.
But... one of Nokia's presidents pointed out that over 21 million units of 6100 & 5100 phones have already been shipped! This is mind-boggling... Nokia sold just over 20 million units of *all* of its models in *entire* year 1997. 6100 started selling in volume in late February and 5100 hit the streets five weeks ago. If they really have already shipped 21 million of these new models in just few months, we are witnessing by far the biggest product launch ever in the history of mobile communication. And yet the phones remain sold out! Nokia is adamantly stating that it is experiencing no product bottle necks and that the demand is simply outstripping every projection made by the retailers.
In Germany, Nokia has apparently overtaken Siemens as the number one brand, which is no mean feat considering the strength of that brand in German soil. Comments from Dutch, Swiss and Swedish retailers confirmed that the new models are the hottest property in Europe. Somehow the articles found this all mainly negative, because some people are buying Ericsson if the stores don't have new Nokias in stock. To me, the most important thing is that this huge launch is successful; after all, Nokia really bet the ranch on these phones by converting all its factories into producing them simultaneously.
The production is still ramping up steadily, and after all, the year's hottest buying season is from September to December, so the real push is yet to come. By fall, the stores should be well stocked all over the world.
So this was the first and most important phase of the model line make-over: the big volume products. The second phase will start in August/September, when three expensive, low volume, high margin products will be introduced. The sub-100 gram 8810, the 9100 smartphone and the GSM 900/1800 dual band phone will enter the marketplace. Nobody knows how just how big the market for any one of these phones will be.
The dual band phones are only beginning to make an impact in European market and next winter should show us how interested the consumers are. Nokia's big advantage is that Motorola and Ericsson have built their models on older platforms, so they will be visibly outdated by Christmas season. Nokia's dual band phone is a 6100 clone, so if the demand reflects that, it will go through the roof.
In luxury segment it's the same story: Ericsson's 788 is old indeed and Motorola's new Startac doesn't have EFR and is basically the same old Startac with 10 grams knocked off. Nokia is feeling so confident about the 8810 that it is apparently considering pricing it at 1000 US$! It's true that the lack of competition in this segment gives it considerable pricing power, but I hope they don't get too greedy. Now that the size of mid-market phones has come down, the market for expensive minimodels may not be the same it was two years ago. They do need to protect Nokia as an upmarket brand, so perhaps they feel that one extravagantly expensive phone helps in that. At least the early reviews and buzz is close to orgasmic.
Problem is, Nokia will be pushing two exotic luxury products, since 9110 will probably cost over 800 US$ as well. Of course, they don't need all of these models to become break-through hits, if just two out of these three high-end models sell solidly, it will boost margins nicely. Anyway, Christmas should be interesting indeed as the five new models squeeze the competition in every possible segment.
Tero
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