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Apple vs Nokia: Competitive Analysis

Apple and Nokia both have strengths and weaknesses in the mobile phone market. Apple's strengths include its strong brand, user-friendly products, and design skills. However, its prices are high and it has a small share of the large phone market. Nokia's strengths are its dominant position in the mobile phone market and profitability. However, its involvement in the music market is limited. In the short term, Apple and Nokia each have strengths, but Nokia is moving into music and has produced a touch phone. In the long run, Nokia may emerge stronger as Apple had to lower phone prices and upset customers with a new version. However, Apple's technology and software were superior. The market is uncertain with new technologies and consumer responses.

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Nisha Nathani
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27 views2 pages

Apple vs Nokia: Competitive Analysis

Apple and Nokia both have strengths and weaknesses in the mobile phone market. Apple's strengths include its strong brand, user-friendly products, and design skills. However, its prices are high and it has a small share of the large phone market. Nokia's strengths are its dominant position in the mobile phone market and profitability. However, its involvement in the music market is limited. In the short term, Apple and Nokia each have strengths, but Nokia is moving into music and has produced a touch phone. In the long run, Nokia may emerge stronger as Apple had to lower phone prices and upset customers with a new version. However, Apple's technology and software were superior. The market is uncertain with new technologies and consumer responses.

Uploaded by

Nisha Nathani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

1. Undertake a competitive analysis of both Apple and Nokia – who is stronger?

Apple strengths: Strong brand name, market leader in music delivery, user-friendly products,
design skills, quality, exclusive contracts, profitable, strong vision
Apple weaknesses: High(er) price, limited distribution, small share of large phone market,
features can be replicated over time.

Nokia strengths: Brand name, dominant position in mobile phone market, good products,
profitable, strong processes to delivery new strategies
Nokia weaknesses: Mature phone market, little involvement in music market to the present, its
new music service has no clear sustainable advantage.

Given Apple’s previous profit record, there is no doubt that it has benefited significantly from its
move into recorded music and the iPod. However, the extension into Apple mobile telephones
remained to be proven at the time of writing. It suddenly faced some very large companies – like
Nokia – with both the resources and the desire to take advantage of the market opportunities.

In the short term, arguably the answer is that they both have their strengths. However, Nokia is
just moving into the recorded music market and it has already produced its own version of the
touch phone. Thus it is worth clarifying the question of ‘who is stronger’ with respect to the time
frame.

In the long run, it may be that Nokia will emerge stronger. At the time of writing, Apple’s
strategy of premium pricing for its phone service had to be revised downwards – it simply was
not hitting its sales targets. In addition, Apple managed to upset some loyal customers by
introducing a new version of its phone that had more features and was also lower-priced. Apple
does not look like a company that is strong in the mobile phone market.

But Apple had one great competitive advantage: its technology and software were superior – i.e.
more user friendly than Nokia. The Finnish company understood the competitive threat from the
new smartphones but failed to recognize that its software was not up to the task. Even in 2013,
Apple has not taken a dominant share of the mobile phone market, but it is highly profitable.

Importantly with regard to assessing who is stronger, it is essential to identify the uncertainties in


the market place – new technologies, responses of consumer electronics companies, etc. These
should add up to major doubts as to how the market will develop. This then raises the question of
what strategy to adopt – an emergent strategy is essential.

2. What are the problems with predicting how the market and the competition will change over
the next few years? What are the implications for strategy development?
The main problems relate to the uncertainties of new technology and the difficulty in predicting
how these will be exploited. An additional problem is the degree of economic uncertainty that
may impact on customer ability to buy phones. The implications for strategy development relate
to the difficulty in using prescriptive processes in this strategic context.

3. What lessons can other companies learn from Apple’s strategies over the years?
Lessons in at least five areas:

1. The benefits of being an innovator and the risks attached with that strategic route – the
iPod itself and the rivals now entering the market.
2. The need to build on the competitive advantages of the company if possible – the Apple
brand name, user-friendly software design, etc.
3. The importance of understanding your customers and their needs – the desire of its young
target group to have a large album list available along with the ability to augment this legally.
4. The value of taking market-based opportunities in order to launch new products – the
recorded music market/download market was arguably ready for this new product and
Apple’s timing was good.
5. The difficulties that can arise as companies move out of their existing product ranges and
begin to compete in other markets – the move into the wider area of consumer electronics and
mobile phones, as explained in the case.

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