Nokia Should Fear Android More Than Apple

Apple and Google/Android have become the GM and Ford -- or Toyota and Honda, depending on what part of the world you're in -- of smartphones. Neither has the most unit sales or marketshare but they're both ascendant. Nokia, Microsoft, Palm (HP) and BlackBerry are either static or declining.

Nokia has largely focused on and been unfavorably compared to the iPhone and Apple by critics and investors. "Three years later the company still has no answer for the iPhone" is the refrain often appearing in Bloomberg or Reuters articles about the Finnish company. But in some sense Android may be a much larger threat to Nokia on a global basis. 

Take a look at the following chart showing smartphone marketshare distribution (based on AdMob network data). This doesn't exactly replicate the actual numbers in these countries but shows you generally where things stand.

Nokia/Symbian strongholds are Africa, Asia and Eastern Europe, Latin America to a lesser degree. The places where Nokia is strongest are largely developing countries in other words.

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The New York Times ran an article this weekend about Android's strategy for emerging markets. In it there was discussion of a range of new, cheap smartphones for these developing markets:

Smaller Chinese manufacturers, which account for about 10 percent of the global supply of mobile phones, are also adopting Android, seeking to gain market share with lower-priced devices.

Many pin their hopes on MediaTek of Taiwan, which supplies chips for lowcost phones sold in Asia, Africa and South America. The company has joined the Open Handset Alliance, the group that promotes Android, Google said. Devices based on MediaTek may cost carriers as little as $70 each . . . 

Apple can't and won't offer lowcost handsets to the market in these places; it's the premium brand and wants to ensure a uniform experience. Eventually we might see a single lower-cost handset from Apple (something like the iPhone Nano perhaps). But that won't be coming very soon, if ever. 

Google by contrast doesn't have any of those same brand-related concerns. If there are lousy Android handsets in the market it doesn't really diminish Android the OS as a whole. There's room for much more experimentation on Android.

Apple has charmed and captured the "high end" of the market. Google and its OEMs are competing there but can also compete at the lower end with lower price points as the Times article suggests. That's the area where Nokia is dominant. But for how much longer?