Ignoring consumer demand for clamshell phones has been a factor in a 15% profit fall. But do the problems in Helsinki go deeper than this design stubborness, asks Ben Carter Until recently, the word Nokia conjured up images of cutting-edge mobile phones and innovative design. The brand has dominated the mobile phone market since its first models went on sale at the end of the 80s.

 

For a long time it left its rivals in its wake, but recent events suggest all is not well at Nokia's Helsinki headquarters.

 

Most worryingly the company is losing market share, with sales in Europe, Nokia's biggest market, particularly affected. Its most recent financial results, for the first quarter of 2004, show sales had fallen by more than 2% - down from 6.7bn euros (£4.52bn) in the same quarter last year to 6.6bn euros (£4.46bn) this year. Profits also fell by 15% to 816m euros (£551m).

Why has the trusty nokia phone lost its sway with the consumer? The consensus is that it has taken its eye off design - traditionally one of Nokia's strengths.

 

Sales of clamshell handsets are booming, yet this is an area nokia insisted - rather arrogantly - it was not interested in, and therefore has largely ignored. The policy has backfired. nokia is now busy developing clamshell phones, although it insists on calling them 'fold design' handsets. The company remains bullish and has plans to develop 40 handsets this year, of which a large proportion will be fold design. It is also planning a range of lifestyle phones to provide handsets for a diverse selection of consumers. But the pressure is on. Samsung recently reported record profits from its mobile phone division and according to Strategy Analytics, Nokia's global market share is down to 29.2% compared with nearly 40% a year ago.

 

So how does nokia get back on track? We consulted Mark Griffin, client director at Start Design, which has developed store concepts for Virgin Mobile and won a Marketing Brand Design Award last year for its work for Virgin Atlantic.

 

'Welcome to nokia.com'. But what a welcome. The website's visitors encounter an insipid homepage of corporate blandness that simply does not encourage further exploration. And this mirrors Nokia's plight as a brand.

 

A popular reason given for Nokia's loss of market share is its lack of a clamshell phone. But this is detail. nokia has failed to think fast enough. Design-wise, nokia remains rooted in the 20th century. Five years ago, nokia phones had a 'wow' factor. They were ahead of the pack, you looked forward to a design and were proud to own one. Many of us remain loyal, but we don't have the same swagger as we used to.

 

We call and text, but we don't brag.

 

More recently, the international nokia game was a great piece of imaginative marketing and brand-building. Why did this attitude and edginess not manifest itself in other areas of the nokia brand?

 

In a near-saturated market, nokia is ignoring trends and fashions; its phones lack personality and individuality. Mediocrity is not an option.

 

REMEDY

- Inject fun, humour and brashness into products, advertising and design. Get cocky.

- Build on the reputation of the on-screen navigation and software. 3G will baffle many - make it easy to use.

- Embrace convergent technology, such as cameras, MP3 players and video recorders.

- Form strategic alliances or joint ventures with iconic brands - Apple or Diesel, for example.