Nokia’s Chinese bet, wholesale
At Nokia World, although more than 7,000 jobs were cut globally, it was announced that China’s workforce would increase by 2,000 individuals. The importance of China's position within Nokia is self-evident. Meanwhile, Nokia announced a global merger and adjustment of R&D bases and staff, with China's status highlighted - Beijing will become Nokia's global innovation center. Nokia stated that Beijing will be the main R&D base for S30 and S40 series and will develop products for Chinese users as well as mobile phone users worldwide using the Windows platform.
Even though smartphones have hit Nokia hard, it remains one of the world's largest smartphone companies. China will become the world's largest single market, contributing more than 38% of Nokia's revenue. Moreover, China has the fastest-growing smartphone user base in the world. However, this market has been severely impacted by giants like Apple's iPhone. On February 11, Nokia and Microsoft announced a broad strategic partnership, adopting Microsoft-developed Windows Phone as their primary operating system for smartphones.
Nokia CEO Stephen Elop understands deeply the urgency of change at this critical juncture. "The first generation iPhone was launched in 2007, and until today, we haven't had a product that matches their user experience." The alliance between Nokia and Microsoft is seen as Nokia's attempt to help itself. Regardless of the cooperation from either side, this marks the formation of the three pillars of the smartphone industry: Microsoft, Nokia, and Android versus Apple. But so far, no truly competitive Nokia products have emerged. Given the vast market demand in China, each product can usually find a segment of the market. For Nokia, Chinese consumers have the highest brand recognition for the company, and survival in the Chinese market is crucial. Clearly, Nokia has recognized this.