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i would agree with what alot of you are saying about se playing in the higher end market. however se aint making bigger money out of this sector. there profit margin is only 8% were as nokia are making 19% and this is nearly 10% down on previous years.
its fine to be in the higher end but you have to make it pay and so far the figures dont suggest that
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Posted: 2004-12-15 20:44:44
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@whizz its really interesting that u mention it, cos india is a huge market. Guess other countries suffer with the same problem. This message was posted from a T68
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Posted: 2004-12-15 20:54:54
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This market has HUGE potential. We have almost 44 million cellular subscribers right now. This, in a country of almost 1.2 billion! Most of these are low end users who just use their phones for text messaging and calls nothing else! Only in cities do people use cams and data services. That too mostly young people. This message was posted from a T230
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Posted: 2004-12-15 21:05:55
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this phenomenon can be explained using the 'rule of 3' in business. there was this london school of economics professor called sumantra ghoshal who postulated this survival of 3.
according to him, in every market, there exists three main players.here's how he explains competition between them in modern market dynamics: which can be further extrapolated into mobile phone manufacturing entities.

the company who has the highest marketshare,i.e nokia... the second highest marketshare i.e samsung/motorola. and finally, third placed se. here, the difference between marketshares of 2nd and 3rd places is significantly larger when compared to 1st and 2nd.

nokia will always try to keep ahead of samsung/moto, considering them as its main rival. it's marketing strategy is basically... "sell more... stay ahead".

samsung/moto compete with each other and of course nokia... it's main marketing strategy will be "it has all the features that nokia doesn't..."

at 3rd place, se serves a very niche high end market. since its share of high end phones is significantly larger, it works on profit margins rather than volumes. here, basic strategy would be "sell less.. make more money off each sale".

since samsung/moto doesn't consider se as its nearest competitor, se can manage to still be a pretty big fish in a small pond. (high end market).


but these dynamics are only short lived...and pretty soon if se starts selling more than nokia, it definitely will have to have a different approach to its current strategy.


hope it helps.

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Posted: 2004-12-15 21:06:01
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@slattery69

The high-end market has only recently become a market worth focusing significant attention on. I think we shall be waiting for some time yet before we see the high-end market reaching the stage where it is capable of matching the profit margins that the lower end of the mobile market currently offers.
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Posted: 2004-12-15 21:07:45
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@scotsboy.. usually high end products command a premium over lower end ones. the profit margins on these are higher as well.

take the case of intel. the intel centrino chips that are currently shipped with laptops, consists of wi fi enhancements within the pentium chip.. this is sold at cost price. this is done so that intel can expand the market of wifi enabled laptops. its a 2 fold strategy..
1. the profit margins on selling a centrino chip is higher than selling a normal pentium destop chip.
2. since the market for wifi devices grow, intel will more wifi enabled products. thus increasing its own profitability.

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Posted: 2004-12-15 21:13:36
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@scotsboy
thats a fair point but i do think you have to set your stall out early and try to dominate and dictate the margin of a new sector. granted its will be difficult for them to enter the low price point and dictate as other players are already well established.
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Posted: 2004-12-15 21:16:44
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@whizz and thats a very important point what se seems to forget. This message was posted from a T68
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Posted: 2004-12-15 21:23:34
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unless u have insider info into what's going on in the mind of CEO, marketing strategies to us laymen might seem haphazard!

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Posted: 2004-12-15 21:34:14
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@Plasmadog,

Great posts. I have been trying to say for a while that SE is currently not concerned about the lower end market just as yet simply because it has enough early adopters out there to buy the higher priced phones. Early adopters can sometimes make or break a company or brand and SE is trying to leverage that. The same can be said of Apple. They are using the iPod series as a stepping stone to get people to look at the Mac and it is working. People are beginning to realize that just like the iPod, Mac's are better than Windows machines, no viruses, and they just work. Apple has had an up-take somewhere around 25% in higher Mac sales by current and ex-Windoze PC users. The reason. The iPod. I have had an iPod with both the PC and a Mac and the iPod and Mac seem to be a much better fit. Not to say that they do not work with Widoze, but they seem to be like peanut butter and jelly. With this in mind, Apple set out to quietly show that if you have an iPod, why not relook the Mac as well and it is working. If you look at Apples share prices and speculation on its stock, you will see that the current Apple marketing strategy has paid off.
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Posted: 2004-12-15 22:00:12
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