The smartphone market is showing explosive growth. It is expected that the sales of smartphones will reach 958 million units this year, up from 722.5 million units last year. Success in the sector is based both on the strength of a company’s brand and the quality of its product. Nokia Corporation (ADR) (NYSE:NOK) recently introduced the Nokia Lumia 925. Can the Nokia brand compete with the others in the market? Below, I will explain why the market in emerging economies, with Nokia’s foresight to create innovative features – along with the reported growth in Lumia sales – will allow Nokia Corporation (ADR) (NYSE:NOK) to succeed with the Lumia 925.
Over the past few years, Nokia has traded in the emerging markets to improve its competitive position in the smartphone market. However, Nokia recently had to push its products to lower price points to survive. It slashed the price of its Lumia 920 in India in March. To put pressure on Nokia, Apple Inc. (NASDAQ:AAPL) slashed the price of its oldest iPhone in emerging markets below $300. Low-end Android manufacturers have also intensified the pressure on Nokia Corporation (ADR) (NYSE:NOK).
However, Nokia has taken steps to solve the problem. The company has sped up the debuts of a new class of budget Lumias. The Lumia 521 is a perfect example with a full price of just $150! Consequently, the company’s rivals aren’t likely to influence its ability to expand in emerging markets, as increased low-budget Lumias should help Nokia Corporation (ADR) (NYSE:NOK) make good sales.
Nokia Corporation (ADR) (NYSE:NOK) has added numerous innovative features to its line of smartphones. The company announced new features such as advanced lens technology, next-generation imaging software, and a new Nokia Smart Camera to the Lumia 925 product. While introducing new features may create interest in the short term, if the company does not include a killer app, it may have trouble competing with its rivals. But since Nokia has taken its time to evaluate the situation, the company has encouraged a third party application to allow developers build apps that run fast and smooth on its smartphones.
During the first quarter earnings report, Nokia revealed that it sold 5.6 million Lumias, up from 4.4 million in the previous quarter. The company also reported that it had sold 19.9 million Lumias in total since shipping its first Windows Phone device, the Lumia 800, in November 2011.
Compared to peer Research In Motion Ltd (NASDAQ:BBRY) BlackBerry, which reported shipments of 6 million units in the first quarter, Nokia is competitive. Research In Motion Ltd (NASDAQ:BBRY) BlackBerry’s shares hit a 52-week low of $6.22 on September 24, more than 67% below the 52-week high it hit in January. The stock came roaring back, before a recent (again) big drop on the back of poor earnings on June 28, falling to below $11.
Along with introducing metals for the first time to the Lumia range, Nokia will introduce the Lumia 925 to Europe with Vodafone Group Plc (ADR) (NASDAQ:VOD). Nokia officials believe that the product launches of Nokia’s smartphone are beginning to increase sales in the United States. In comparison, shares of BlackBerry fell by 4.5% after two brokerages expressed disappointment in its U.S. launch of the BlackBerry Z10 smartphone. Nokia has also announced that Vodafone Group Plc (ADR) (NASDAQ:VOD) customers will have exclusive access to a 32GB version of the Nokia 925.