Motorola, Nokia eyeing each other’s turf

The top two handset vendors made small ripples this week in near-perfect juxtaposition. They both want something the other has-and gettin’ some is going to be difficult.
Nokia Corp. announced yesterday that it will make two of its premium N-series devices available for sale in the United States directly to consumers. The Finnish vendor said the N75 and N76 devices will be available at $430 and $500 respectively through its branded flagship stores and through independent, online retailers. Consumers would need to sign up for service through a domestic GSM carrier for service. (The release made no mention that the N75 has been available at AT&T Mobility since earlier this month.)
The move represents part of Nokia’s strategy to resurrect its U.S. fortunes, where its market share slipped from 20% in Q1 2006 to 10% in Q2 2007, according to Strategy Analytics. (In the same period, Motorola’s U.S. market share grew to 35% from 29%.) The timing of Nokia’s announcement may well be influenced by the impending launch of Apple Inc’s iPhone at AT&T Mobility, at $500 and $600.
Nokia has said it is simultaneously addressing each of the U.S.’s top-tier carriers’ needs while developing its alternative distribution channels. Tero Kuittinen, analyst at Avian Securities LLC., said recently that if Nokia wants to claim 40% global market share-its stated goal-it will have to perform better in the Americas. In the past, Nokia CEO Olli-Pekka Kallasvuo has said the company considers the United States to be more important than its market size, due to its role in global media and as home to Wall Street.
Tis the season for premium handsets-at least for vendors with a following, which Apple can claim. Nokia apparently will have an uphill struggle to establish its brand here, as a recent survey by Anderson Analytics reflected that more than half of college students identified the company as Japanese. That may make Nokia’s press release reference to the “N Series multimedia experience” a bit obscure, unless the vendor can get those college students into a flagship store to find out what the fuss is all about.
There’s also new evidence-as if it was needed-that college students’ views have little relevance.
Motorola, in the same survey, was identified as a Japanese company by 42% of college students, yet its domestic market share, as noted, has risen to 35%.
In turn, Moto’s CEO Ed Zander yesterday told an audience of analysts and media at Lehman Brothers Worldwide Wireless & Wireline Conference in New York that he wants “a piece of that action,” in reference to European sales of high-margin devices. (Motorola, as most know, desperately needs profits.) Motorola’s market share in Europe, traditionally Nokia’s home market, trails both Nokia and Samsung Electronics Co. Ltd., according to Gartner data.
Motorola has been faulted by investors-including dissident investor Carl Icahn, whose effort to gain a seat on the company’s board was narrowly turned back last month-for not having much to offer in the 3G, high-end market that Europe represents.
Meanwhile, earlier this week, Motorola announced that, between announcements in January and this week, it would give its business a $1 billion haircut, much of which will come from 7,500 job cuts, well over 10% of its workforce. Half of those cuts will be complete by month’s end, the other half by next year, the company said. The news failed to move Wall Street.