Leader of the pack

Finnish vendor Nokia has established a formidable lead on its rivals in the Middle East mobile handset and accessories market.

  • E-Mail
By  Michael Thorne Published  September 4, 2006

|~|Maalouf200.gif|~|Nokia area director of Marketing for the Middle East and Africa Eddie Maalouf says the region’s handset market is rapidly evolving. |~|We’ve said it before and we’ll say it again; the market for mobile handsets in the Middle East is booming. A recent report from Arab Advisors Group, published in July’s edition of ECN, suggested that cellular operators added around 34 million subscribers to mobile networks in the Middle East in 2005, which is a lot of new business. Mobile phone vendors are flooding the market with new handsets, each one designed to captivate consumers with a combination of technology, practicality, size and clever branding. Most, though not all, seem to be succeeding in generating significant capital, driving renewed investment and increasingly focussed commercial strategies targeting the region’s consumers. Nokia has dominated the Middle East market in terms of unit sales for much of the past decade, targeting the consumer market with a comprehensive range of handsets from basic entry-level units to top-end smartphones and achieving market leadership in most segments. Recent reports have suggested that Nokia has suffered from sliding sales in a number of established markets, including the US. However, in the Middle East, the company’s market share continues to grow. In the second quarter of 2006, Nokia’s handset sales rose by 39% in the Middle East and Africa, compared to 26% globally. This achievement has triggered a major rethink in regards to the company’s corporate structure in the region, which has had knock on effects for its channel partners. The most significant move that Nokia made as a result was to separate its Middle East and Africa operations from its European operations. This has established the company’s Dubai offices as its regional headquarters, free to initiate dedicated commercial strategies independent of those instigated by its European operations. “We have revamped our regional commitment compared to a year ago, when we had only two offices in the MEA; one in Jebel Ali Free Zone, Dubai and one in Johannesburg, South Africa,” Nokia’s area director of marketing, MEA, Eddie Maalouf, tells ECN. “Now we have restructured the way we approach the market, dividing it into thirteen distinctive country clusters. We have already opened new offices in Pakistan, Iran, Saudi Arabia, Dubai, Lebanon, Egypt, Morocco, Senegal, Nigeria, Kenya and Mozambique.” Maalouf stresses that this reflects both the increased importance of the MEA markets globally in addition to their comparatively disparate nature. “Now we are delivering product to over 60 markets directly from the factories, which we’ve never done in this region. To be able to do this you need to make sure that you have enough business planning and there’s significant growth on the horizon for you to be able to justify delivering to each of these remote markets.” ||**||Targeting emerging markets|~|n91-200.gif|~|Nokia's N91 multimedia handset.|~|Emerging markets are key to Nokia’s strategic plan for the region as it looks to leverage its increased regional investment to target the under-serviced markets of East and Central Africa. “One of the most important things we have done strategically is to understand the equity that comes from the entry-level handset market. It’s not about the price; it’s about how much you can deliver to a consumer at a specific price point,” Maalouf explains. “We have managed to build equity in the emerging markets with our entry-level models.” Maalouf says the expansion of cellular services across the Middle East has created a host of commercial opportunities for handset vendors. “Identifying growth pockets in each market and putting in a value proposition is the key to a successful commercial strategy,” he says. Nokia recently conducted an extensive global segmentation study, identifying common consumer trends across various markets before relaying this information back to its R&D facilities, with each key global region’s demands considered in subsequent handset design processes. While Maalouf remains reluctant to rule out establishing a manufacturing base in the Middle East in the future, he says the company’s current global manufacturing capacity is more than capable of handling any additional demands from the region. Nokia operates a multi-distributor set up in each of its markets in the Middle East and focuses on developing extensive distribution networks in each country to maximise its presence in the retail sector. “We don’t ‘condition’ the market at all,” Maalouf explains. “Most of our partners represent multiple brands. We believe that the depth of our product portfolio and the value-added services we offer make us stand out from the crowd. “You’ll find distributors that span more than one country and maintain different roles in various markets,” Maalouf explains. “We have fantastic distribution partners that have played a key role in helping us achieve great success in the Middle East. Key to this has been their ability to adjust their strategies according to the demands of the market. We can change as a company but if the distributor and the landscape do not change then nothing is going to happen from a business perspective. “The market has matured considerably in the last ten years and now there is an openness to adapt competencies from Western markets. Complacency in this business has become unacceptable. The industry is evolving at a rapid rate which is leading to a new era of professionalism across every sector of the channel.” Maalouf claims this new way of thinking has led retailers and distributors to take a more sophisticated approach to their respective business dealings, from logistics to point-of-sale strategies. “We’ve witnessed it in the UAE retail sector. Many retailers, particularly those based in Dubai, now rival Western European chains in terms of their professional approach to the sector,” he says. “Even from five years ago, it’s incredible how fast the sector has evolved and matured.” “Retailing is no longer just about box moving. Channel partners are trying to bridge the gap between manufacturers and consumers in terms of offering real value. This is no longer just happening at the top end of the market, but is occurring to the entry-level sector also.”||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code