Holiday shoppers provide smartphone companies with a major opportunity for maximizing sales and this holiday season might see a tilt from Apple to Nokia this year as the latter presents its first major advantage over the former – it has much better LTE (Long Term Evolution) connectivity.
As it turns out, handsets by Apple, like the iPhone 5, have limited themselves to fewer frequency ranges than handsets by Nokia, like the Lumia 920, and not only does this set Apple back in terms of potential sales but it provides Nokia with an excellent opportunity to improve market share in Europe. Nokia, which was once a global leader in the mobile phone handset market, is now struggling to recover increasing losses and rapidly diminishing revenue flow as companies like Samsung and Apple dominate the industry with their respective operating systems, Android and iOS.
This holiday season, Nokia has seen a much greater number of sales in Europe, where nearly 90% of the smartphone market belongs to Apple and Android, and has reportedly seen much better success than companies like Apple in the holiday season. Neil Mawston, an analyst at Strategy Analytics in London, posits that Apple handsets have prioritized their designs around the US for its broader coverage and greater potential customer base. Operators in Europe provide LTE services on a different frequency than that of the US and the iPhone 5 only works on two European carriers – Deutsche Telekom AG in Germany, and Everything Everywhere in the U.K. Nokia, on the other hand, has avoided this mistake and this might prove to be a smart move since Western Europe’s smartphone shipments reached 28.1 million units last quarter compared to 26.7 million units sold in the US.
However, there is still some scepticism about Nokia’s rising influence being a worthy threat to any of the two major companies in the industry. Kai Korschelt, a Deutsche Bank AG analyst in London, points out that Nokia still has to compete with the already advanced momentum that both Apple and Samsung have had over it. He also aptly points out that German stores selling out all of their Nokia handsets need not necessarily indicate a healthy demand but may just point to limited supply, and that most of the purchases and generated buzz may just be coming from loyal Nokia users and electronics enthusiasts. According to Kai, the Finnish company may have to build a bit more traction amongst users if it stands a chance in the highly competitive and duopolistic smartphone market.
Nokia’s stock is down almost 90% since the first iPhone released but there is reason to be optimistic as its shares rose 21% in the last fortnight owing to increased sales of the Lumia 920 in Germany.
