With a 40 percent market share in 2007, Nokia was the largest phone brand in the world. However, beginning in 2009, the company saw a sharp decline in sales. Its market share fell to 3.1 percent by 2013. The adoption of Microsoft's Windows operating system, which found it difficult to compete with Android's user-friendly interface, and Nokia's failure to recognize the transition from feature phones to Android-based smartphones were the two main causes of this decline. A major setback occurred in 2014 when Nokia sold its smartphone division to Microsoft. Following Microsoft's failed attempts to revitalize Nokia's brand, HMD Global purchased the manufacturing rights for Nokia phones in 2016. Nokia's first Android smartphone was introduced by HMD in 2017, but the company had trouble breaking into the cutthroat smartphone market, managing to secure a mere 1 percent of the market that year. Despite these challenges, Nokia found success in the feature-phone market. With 10.1 million feature phones shipped in 2021, it gained an 18% market share. The business also concentrated on lowcost smartphones, competing in the entry-level to lower mid-range market with companies like Xiaomi and Motorola. Nokia had recently developed a new smartphone Nokia P1 5G that has premium features comparable to contemporary iPhone and has priced it at 50% of iPhone’s price. Nokia India’s head, Khanna, is currently faced with the difficult decision of whether to position Nokia as a moderate phone maker and keep producing low-cost smartphones or to turn its attention to producing high-end smartphones competing with iPhone and Samsung. Nokia's future in the fiercely competitive mobile phone market will be decided by this strategic choice that Khanna make.

Learning Objectives

1. Evaluate product line extension and premiumization strategies in the context of heritage brands in the mobile phone [technology] industry
2. Analyse product line extension opportunities and risks for established and then failed brands re-entering into premium market segment
3. Understand brand positioning and repositioning strategies for once market leader brands trying to stay relevant in contemporary markets
4. Develop strategic recommendations for growing market share in highly competitive mobile phone segments