Nokia Introduces A New Premium Brand Of Handsets
After a few years of intense competitive pressure, Nokia is finding it's market dominance somewhat weighted at the lower-value end of the market. Being the king of commodity handsets is not a bad thing, but there are bigger margins on the high-end. So Nokia is launching a new premium brand, the "N" series of handsets, which will have higher grade body construction, features, and top shelf components like Carl Zeiss lenses. Not unlike Acura, Infinity, and Lexus, Nokia has found it difficult for its brand name to support handsets at $600 (or about 3x the average unit price), so the N-series brand will separate the herd. A similar technique has been used by Sony, Philips, and other tech companies, not the least of which is Nokia itself, which launched the Vertu brand of £15,000 phones in 2002. Siemens launched the Xelibri upscale brand in Jan. 2003, but that didn't help them enough. All in all, we agree with the marketing strategy of different tiered brands. While on a philosophical level, we question the conspicuous consumption of people buying £15,000 phones, on a marketing level we believe a solid brand carries a clear message, and to address a new market segment often will require a different message.
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