> Anyway Vodafone may not need to arm twist Nokia as they will likely have
> the Japanese manufacturers offering to custom build the phones.
> Just as KPN does (CNN - 27 Aug)
I am talking about European Markets (specifically UE).
It is an ongoing battle. Between operators' purchasing power and Nokia
leveraging on consumers' demand for their products. Nokia has worked very
hard to build brand awareness in Europe.
Operators may have a hard time pushing other phones. Nokia's brand loyalty
is too strong but at the end of the day operators decide which phone to
subsidize and no brand loyalty is too strong when you have to pay $100 more
for it.
On the other hand, it may still work out for Nokia because 3G phones will be
sold first to early adopters and status segments which are brand loyal. The
first 3G phones also unlikely to get subsidies from the operator. Either
they will be given for free to testers or they will be sold at a premium. In
this case, with no subsidies, brand will outweigh other factors.
Worrisome for Nokia is how conservative they are and when will they have
their phones ready. If GPRS is an indication they may leave the market to
others for the first six months to a year and only enter it when they think
it is mass market ready so they can coordinate wide distribution for
availability with a heavy communications campaign.
In any case, the real arm twisting will start when Operators and Nokia begin
spending their communication budgets in a big way. Co-Op marketing will be
very important as some of the 3rd tier Operators in Europe will have no
brand recognition at all and will depend more on Nokia for promotions.
Jorge Alonso
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Received on Sat Sep 8 21:02:36 2001