Nokia Drops All But The Richest In Japan
Handset maker exits the under-$5K market.
Finnish handset-maker Nokia decided to virtually pull out of Japan on Thursday, admitting defeat in the face of a dwindling market.
The one counterintuitive exception: Nokia will continue to sell its ultra-high-end Vertu phones in Japan.
Yahoo! BuzzVertu sells handcrafted phones, packed with precious metals, at the kind of prices that would make a billionaire blush--or at least think twice. A typical Vertu has a price tag of $5,000-$10,000, and it has offered models that ranged up to $310,000. Each phone boasts a concierge service for its users at the touch of a button, though presumably the average Vertu user might have a personal concierge to start with.
"There is definitely a market in Japan for Vertu," said Carolina Milanesi, an analyst with Gartner Research. But she said that Nokia had done the right thing in pulling its other models from the Japanese market, given its weak share.
Nokia (nyse: NOK - news - people ) 's decision to stop selling phones and end marketing activities in Japan did not come as a surprise -- Nokia's market share was barely 1.0%. Japan is a very mature market, dominated by local manufacturers and network operators like NTT DoCoMo (nyse: DCM - news - people ). Consumers also have little desire to upgrade and replace their phones. With the country in recession, Nokia was unlikely to want to plow more money into a sinking ship.
Shares of Nokia ended flat at 11.30 euros ($14.57), in Helsinki on Thursday. Swedbank analyst Jan Ihrfelt said he did not think the announcement would influence investor sentiment; he told Forbes.com that even rivals like Sony Ericsson were having difficulty making progress in Japan.
A representative of the joint venture between Sony (nyse: SNE - news - people ) and L.M. Ericsson (nasdaq: ERIC - news - people ) said there were no plans to shelve activities in Japan. But she admitted there would be a "shift" to a more research-focused business, creating a "center of excellence" for high-end handset development.
Also on Thursday, Nokia said it had begun shipping its answer to the Apple (nasdaq: AAPL - news - people ) iPhone: its touch-screen 5800 model. Although most of Europe and the United States will have to wait till 2009 before they get their hands on it, markets including Russia, India, Hong Kong and Spain will have the phone before the year is out. As Forbes.com revealed last month, Spanish network operator Telefonica (nyse: TEF - news - people ) will offer the 5800, as well as the iPhone, in Spain.
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Finnish handset-maker Nokia decided to virtually pull out of Japan on Thursday, admitting defeat in the face of a dwindling market.
The one counterintuitive exception: Nokia will continue to sell its ultra-high-end Vertu phones in Japan.
Yahoo! BuzzVertu sells handcrafted phones, packed with precious metals, at the kind of prices that would make a billionaire blush--or at least think twice. A typical Vertu has a price tag of $5,000-$10,000, and it has offered models that ranged up to $310,000. Each phone boasts a concierge service for its users at the touch of a button, though presumably the average Vertu user might have a personal concierge to start with.
"There is definitely a market in Japan for Vertu," said Carolina Milanesi, an analyst with Gartner Research. But she said that Nokia had done the right thing in pulling its other models from the Japanese market, given its weak share.
Nokia (nyse: NOK - news - people ) 's decision to stop selling phones and end marketing activities in Japan did not come as a surprise -- Nokia's market share was barely 1.0%. Japan is a very mature market, dominated by local manufacturers and network operators like NTT DoCoMo (nyse: DCM - news - people ). Consumers also have little desire to upgrade and replace their phones. With the country in recession, Nokia was unlikely to want to plow more money into a sinking ship.
Shares of Nokia ended flat at 11.30 euros ($14.57), in Helsinki on Thursday. Swedbank analyst Jan Ihrfelt said he did not think the announcement would influence investor sentiment; he told Forbes.com that even rivals like Sony Ericsson were having difficulty making progress in Japan.
A representative of the joint venture between Sony (nyse: SNE - news - people ) and L.M. Ericsson (nasdaq: ERIC - news - people ) said there were no plans to shelve activities in Japan. But she admitted there would be a "shift" to a more research-focused business, creating a "center of excellence" for high-end handset development.
Also on Thursday, Nokia said it had begun shipping its answer to the Apple (nasdaq: AAPL - news - people ) iPhone: its touch-screen 5800 model. Although most of Europe and the United States will have to wait till 2009 before they get their hands on it, markets including Russia, India, Hong Kong and Spain will have the phone before the year is out. As Forbes.com revealed last month, Spanish network operator Telefonica (nyse: TEF - news - people ) will offer the 5800, as well as the iPhone, in Spain.
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