Guest Post: Is the Nokia X seeing stars?

by Vasileios Tziokas, marketing manager, Upstream

Nokia’s attempts to break into emerging markets bore fruit in the shapely form of the X. The device combines what Nokia considers to be the best of Android with what makes Nokia the third most desired brand in India – great style, great heritage and a simple UI. In fact, 17 per cent of Indian consumers polled in our [Upstream's] latest consumer attitudes report said they would like to buy a Nokia as their next phone. Compare that to China where only 4 per cent of consumers lust after a Nokia handset, and you would imagine that the Nokia X would sell much more easily in India than it would in China.

Developing markets are, however, a changeable landscape and this is something the Finnish handset manufacturer has found out the hard way, with sales of its Nokia X underperforming pointing to the device being too expensive for Indian consumers.

This has resulted in Nokia taking the decision, just two weeks after the X was launched in the country, to drop the price of the black model by INR 1,000 (£10) to INR 7,545 (£75).

This effectively creates a two tier pricing system for the Nokia X as the more colourful versions of the phone still sell for the original INR 8,599 (£86).

By contrast, in China the X sold out of pre-orders (which were a not inconsiderable one million handsets) online within four minutes of launching.

The phone was released at the same roughly £85 price mark in both countries.

Nokia have reacted very quickly to the apparently disappointing sales in India and the phone may yet still sell well, but the disparity between the two countries paints an interesting picture.

Nokia will have known how popular their brand is in each country.

By releasing an Android device they were aiming to combine that popularity with the familiarity of emerging markets users with the Android platform.

According to Upstream’s research, Google Play is used by 47 per cent of Indian consumers, making it the most popular app store in the country.

By contrast, in China consumers are more likely to use either the Apple App Store or their mobile operator’s app store than Google Play.

Taking all the statistics into account, it would have been reasonable for Nokia to assume that India would be a walk in the park and China would be the hard sell.

So why has the opposite happened? Why are Nokia X’s flying off the shelves in China and why do they need a little push in India?

The Nokia X is a cheap handset by Western standards, but by Indian standards it is still a pricey one.

Especially for a device that does not allow unfettered access to Google Play – remember Nokia is the gatekeeper to the app store on the X.
China’s sizeable affluent middle classes are more easily swayed by the phones good looks, the price point being just right for that market.

Ultimately, Nokia was hoping the broad appeal of the X smartphone would mean success in both markets, but this has not materialised.

The reason for this is two-fold: – firstly that an ‘affordable’ price in China and India mean very different things and secondly that users in India may not be easily swayed by a colourful device.

The key to success in emerging markets is understanding the differences between countries and being bold enough to change tack if things aren’t going to plan.

So in a way Nokia’s decision to lower the price of its X device could actually be the recovery after an initial stumble, rather than a stumble in its own right.

Author biog

Vasileios Tziokas is currently marketing manager with Upstream.

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