"We all agree that size matters in business. It’s not everything, but it counts for a lot. It has allowed Nokia to spread mobile communications technology at ever more affordable prices to people in every corner of the world."
Sunday, January 31, 2010
Apple as the 'Largest Mobile Devices Company'--Nokia Disputes the Claim
When launching iPad on Wednesday, Steve Jobs claimed that Apple is "the leading mobile devices company" by using a very broad definition of the market that include iPods, iPhones and Macbooks (which are all portable devices). But that definition is too broad for Nokia that has now lashed out at Apple for the claim. In a blogpost, Nokia claims that it is bigger when we use the more conventional yardstick, namely: the number of devices (units) sold. In the same blog, Mark Squires notes
Bragging rights are important but more seriously, is Apple right in claiming that it is the biggest mobile devices company based on revenues by including iPods and Macbooks in addition to the more narrowly-defined definition of mobile phones? How relevant is it for strategic analysis and comparison?
Subscribe to:
Post Comments (Atom)
It adds another dimension to the Apple vs Nokia battle. This article has two challenging questions: First, whether Macbook is a mobile device and Second, whether no. of items sold OR total revenues should determine market leader.
ReplyDelete1. In order to define a mobile device, major attributes are size and portability and Macbook is definitely portable.
2.Considering Apple's products are competing in the high end of the market, no. of units sold should not be the criteria to determine the market leader. A low priced Nokia mobile definitely has a bigger target market than a iPhone and therefore the no. of items sold will definitely be more. In order to compare "apples to apples", total Revenue should be the parameter. However, the challenges are the Dollar Revenues(Apple's) vs. Euro Revenues(Nokia's) comparison and dissecting the annual report of these companies to find out exact revenues of the different items (For instance we also have to categorize Nokia Netbook as a mobile device).
This first struck me as a mildly silly display of corporate chest-thumping. I mean, if Starbucks and Dunkin' Donuts were arguing over who was New England's leading coffee retailer, would anyone really care?
ReplyDeleteBut I suppose market share considerations, and in particular perceptions of being a market leader, matter more for tech companies because of all the network effects that can lead to winner-take-all markets or at least to powerful bargaining positions when you're making deals with companies that operate in other layers of the stack--component manufacturers, wireless providers, application developers, etc.
And this "mobile device" market seems particularly contentious because it's so fluid and no one knows who will come out with the next game-changer. We can't even agree how to define the market. The term is new and strangely vague--if someone had asked me a few years ago about a "mobile device," I might have thought they needed a bicycle or something. But now we have smartphones and laptops and netbooks and notepads and a very few laggards like me who are reasonably happy to organize our lives with a day planner and #2 pencil.
I have no idea where the "mobile device" market will be in five years, but it looks like Apple and Nokia are among those hoping to dominate it.