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					Mobile Industry Report

          A.Srikant Patro
          Satyanarayana murthy.G
          Kalse Asha Raosaheb
It gives us great pleasure and deep satisfaction in presenting this
report of our case study work undertaken as a part of MBAP-AIT
course, arranged in order to gain an insight into the presented
knowledge domain.

We take this opportunity to express our sincere gratitude to several
people with whose help and encouragement, we have been able to
complete the case study successfully.

We would like to thank Mr. Srikanth Acharya for taking great pains
and helping us around in this term in particular and the entire case
study duration in general. We will remain indebted to him throughout
our career for he has been an inspiration and guide through the entire
case study process in short Thank You Sir.

                                                    Thanking all
                                                    A.Srikant Patro
                                                    Kalse Asha Raosheb
                          Table of Contents

Chapter -1
    • Introduction
    • History of Mobiles in globally
    • Trends in mobile


    • Mobile manufacturers in India
    • New emerging markets


    • Macro Environment


    • Micro Environment


    •   The inner and outer world of NOKIA


In today's world, most people communicate through the use cellular phones. It's
hard to believe that fifteen years ago cell phones were a rarity. With rapid
consumerism sweeping the country, India has emerged as the second largest
mobile handset market, poised for explosive growth by 2007. Industry observers
are of the view that market within the first quarter of 2006 could well become a
global hub for mobile handset manufacturers. With an eye on the impending
growth opportunities, the report "mobile industry" analyzes the current market
scenario and the technological developments driving the demand graph.A mobile
phone, also known as a cell phone, cellular phone, mobile, or hand phone, is an
electronic telecommunications device with the same basic capability as a
conventional fixed line telephone, but which is also entirely portable and is not
required to be connected with a wire to the telephone network.

 Most current mobile phones connect instead to the network using a wireless
radio wave transmission technology. The mobile phone communicates via a
network of base stations which are in turn linked to the conventional telephone
network. In addition to the standard voice function of a telephone, a mobile
phone can support many additional services such as SMS for text messaging,
packet switching for access to the Internet and MMS for sending and receiving
photos and video.
Some of the world's largest mobile phone manufacturers include Alcatel,
Audiovox, Fujitsu, Kyocera (formerly the handset division of Qualcomm), LG,
Motorola, NEC, Nokia, Panasonic (Matsushita Electric), Philips, Sagem,
Samsung, Sanyo, Sharp, Siemens, SK Teletech, Sony Ericsson, and Toshiba.
There are also specialist communication systems related to, but distinct from
mobile phones, such as satellite phones and Professional Mobile Radio. Mobile
phones are also distinct from cordless telephones, which generally operate only
within a limited range of a specific base station
History of mobiles globally:

The mobile revolution

From 1910s to the mid-1990s, the United States dominated the mobile business.
It was the delay in the commercialization of the cellular technology.

From 1947 to 1983 - that opened the window of opportunity to mobile challengers
in Europe and Asia.

In the 1990s, Euro-Nordic operators and equipment manufacturers dominated
mobile innovation. Since the late 1990s, Japan has excelled in mobile service
innovation and South Korea in broadband innovation. In contemporary mobile
competition, it is global scale that matters, Big is beautiful.

   •   Rise and decline of US leadership

Pioneered by Guglielmo Marconi, wireless telegraphy created the first customers
and business models in the industry, particularly in the maritime sector.

Over time, it was superseded by AM and FM communication, which provided a
substantial military advantage to US defense forces during the Second World
War. After the War years, these technologies led to mobile industrial services
and the first consumer test markets.

The cellular concept was discovered as early as 1947 at the Bell Labs, in the US,
but the commercialization followed only in the 1980s with analog cellular
networks. These services appealed primarily to automobile drivers and corporate

Things changed with the digital transition, which was driven by the European-
based standard (GSM) and pioneered by Euro-Nordic operators and vendors,
such as Nokia and Ericsson. At the turn of the 21st century, service innovation
migrated to Japan, where NTT DoCoMo pioneered user-friendly, high-speed

Meanwhile, South Korea engaged in broadband innovation. Amid the boom and
bust of the technology sector in 2001-2003, the industry witnessed a dramatic
period of innovation and globalization — particularly via new massive growth
markets, first in China and now in India.
Since 2001, worldwide mobile markets have witnessed the first transition to the
multimedia cellular, known as UMTS in Europe and 3G in the US.

Even today the US market remains the most lucrative in the world, but China's is
the most populous. As mass compensates for per capita over time, the latter will
become the wealthiest.

   •   Why America lost leadership

At its peak, the US leadership in the wireless industry covered the entire value
system, embodied by America's largest corporation — AT&T. The leadership was
eclipsed because of the conflicting objectives of the federal regulators and the
Department of Justice's antitrust division.

The regulators promoted equity (which justified the perceived need for natural
monopoly), whereas the concern of the DoJ was efficiency (which justified the
promotion of competition). As long as regulators reigned over antitrust
authorities, the monopoly system remained intact. When the roles were reversed,
the monopoly system fell apart. The tensions were defused with consent decrees
(1913, 1956), but ultimately they undid the Bell System (1984).

In the post-War era, the advanced Euro nations and Japan not only caught up
with America, but also benefited from increasing diffusion of US wireless R&D.
Furthermore, US regulatory policies proved misguided.

The idea of inter-country roaming came about naturally in Northern Europe,
where Nordic countries, with their similar cultures, promoted open exchange of
ideas, products and services.

In the US, broadcasters and defense forces have dominated large chunk of
spectrum, which has not been the case in Europe or Japan. Conversely, in
Europe and Japan, licensing policies have caused less turmoil.

Finally, in the US, charging policies (MPP, or mobile party pays) slowed down the
rise of the mobile business, whereas in Europe and Japan, different policies
(CPP, or calling party pays) have ensured faster growth.

   •   Mobile service innovation

By the end of 2004, there were more than 16 million 3G/UMTS customers
subscribing to 60 networks based on WCDMA technology in 25 countries, and
many more networks were either in advanced testing or in pre-commercial
launch phase.
Due to NTT DoCoMo's early lead, Japan accounted for 53 per cent of the global
3G/UMTS market, while Europe contributed a further 42 per cent to the global
WCDMA base.

In service innovation, NTT DoCoMo has shown the way since the launch of its
high-speed services (i-mode, 1999; FOMA, 2001). These services have inspired
operators worldwide, but such achievements cannot be easily replicated globally.

In Europe, Vodafone, after exploring DoCoMo's success drivers in Japan,
pioneered its own service portfolio (Vodafone Live!); in the US, Verizon Wireless
followed with its services (Get It, V Cast).

The arrival of dynamic mobile content, particularly mobile phone television,
provides new opportunities to US media and entertainment. Yet, these prospects
are not as promising as some US players would like to think. Unlike classic
Hollywood cinema and popular US television, mobile multimedia can be a very
local medium.

Just as mobile users in Silicon Valley are unlikely to get excited over Chinese
SMS campaigns, mobile users in Bangalore or Mumbai may not be particularly
intrigued by local news in New York City or Los Angeles.

Trends in mobiles

   •   From mobile devices to multimedia, mobile TV

Among equipment manufacturers, the US-based Motorola has made a great
comeback under Ed Zander's leadership. The design of cell phones has
undergone a metamorphosis, through the ingenious brand language of moto-
morphing. During the past year or two, the ultra-thin Moto Razr V3 has electrified
users in lead markets.

After years of R&D investments, Microsoft's mobile devices - from smart phones
to game devices such as Xbox 360 - are capturing market attention.

As the Internet has diffused worldwide, the US-based IT enablers are also
promoting complementary solutions, from Wife to WiMAX. With increasing
consolidation, the leading mobile operators are gradually catching up with
developments in the cutting-edge markets of Western Europe and Asia-Pacific.
Last January, Verizon's `V Cast' began to offer multiple channels of mobile
multimedia, including CNN and MTV.

In the coming years, true mobile TV will replace on-demand video, it is the
"Global multimedia next big trend.
                       Chapter - 2

Mobile manufacturing in India:

India has become the second largest mobile handset market in the world. the Indian
mobile handset market is now worth about US$ 2 billion, but will surge by over 60
percent in two years.

the Indian mobile subscribers are willing to pay for upgrades, value-based services,
and advanced models that offer better services.
The growth has caught the imagination of global handset majors. More than a dozen
large electronic manufacturing service companies are sprucing up plans to set up their
handset facilities in India. Apart from this India is going to produce low cost mobiles
keeping in mind the rural sector.

New emerging companies in India

About LG:
Korean consumer electronics major LG Electronics. LG has a facility in the outskirts of
Delhi and is setting up another near Pune. By 2010, LG aims to produce 20 million
mobile phone units of which 50 per cent will cater to the export market. The facility
will involve an investment of US$ 60 million by the year 2010.

About Nokia
Nokia, a leader in India's US$2.5 billion mobile phone market, is building a unit in
Chennai. The manufacturing unit will be Nokia’s tenth mobile device production facility
globally. Nokia anticipates investing an estimated US$100- 150 million in the India
production plant.

Nokia in Chennai

Nokia is going to establish a high end base station controller manufacturing unit
in Chennai; they wanted to invest Rs 650 cr at Sriperumbudur, north of
Chennai. With a work force reaching approximately 2,000 employees and
production goes to full scale.

With an estimated production of 20-40 million handsets per annum, this whole
operation would start in Q1, 2006.
About Elcoteq

Elcoteq, a Finnish firm, the world's third-largest supplier of handsets to original
equipment manufacturers (OEMs), has already set up a facility in Bangalore.
Elcoteq’s Indian plant is relatively small compared to its plants elsewhere – it will
produce about 4 to 6 million handsets in a year, similar in size to the company’s
unit in Russia. But it could set a trend for smaller manufacturers to begin looking
at India. More importantly, Elcoteq is also trying to integrate the manufacturing
process with the local supply chain. Plastics, electro-mechanical/mechanical parts
and packaging materials will be sourced from local firms with whom Elcoteq is in
discussions. Once key components are made in India, it will achieve globally
competitive costs and show the way forward for other manufacturers as well.

About Motorola:

Motorola established its R&D facility in Bangalore in 1991 and has identified
India as a Research and Development (R&D) engineering.

From the manufacturing point of view, India is being looked at as a potential service
centre for the global mobile phone market.

For example: For manufacturing activity, Motorola is also looking at Chennai as a base
for opening a global mobile networks operation centre, which would carry out work
for mobile operators in the Asia-Pacific region, Europe, the Middle East and Africa.

ICT –Information Communication and Technologies

ICTs refer to the various technologies that enhance the creation, storage,
processing, communication and dissemination of information. ICTs also refer to
the different infrastructures used in these processes, their applications and the
numerous services these infrastructures render.

These are the following technologies as the elements of ICTs:

 •   Media of Communication (e.g. radio, television)
 •   Information machine (e.g. Computers)
 •   Telecommunications technologies and equipment (Satellites, fiber optic
     cables, phones, Facsimile machines)
Telecommunications infrastructures in particular have become the driving
forces of ICTs
These are the capability to link all various ICT elements together:

1. Facilitating public and private sector activities in areas such as:

   •   Public administration: ICTs facilitate the provision public information
       that is useful to the community at large. E.g. e-Government

   •  Urban and Rural Development:
     ICT applications are useful in facilitating development programs in
   many countries. E.g. The establishment of telecasters in rural
   communities can facilitate economic empowerment.

   •   Transport.
        In the transport sector, ICT applications can be used to improve
road, air and rail transportation.

2. Improving the quality of life for citizens such as:

   •   Health: E.g. Telemedicine
  •   Education: E.g. Libraries have migrated from the traditional system to
      web-based systems applications like, E-Learning, etc.

         •   Agriculture: There are expert system designed to handle
             agricultural issues such as water utilization and management, pest
             control, harvest management and so forth.

         •    Environment: E. g: GIS is an automated system that enables the
             capture, storage, checking, integration, manipulation, analysis,
             display, and modeling of complex spatial data

3. Sharing Knowledge and Improving Access to Information

      E-mail, The web and other platform of information communication

  4. Facilitating Activities in the Business Sector such as:

  •   Manufacturing ICTs applications are linking the process chains in
      manufacturing as opposed to improving or facilitating single steps in the
      production lines. For instance, the use of Computer-aided-design (CAD)
      has improved the design stages of machine tools.
   •   Electronic Commerce

    • Travel and Tourism
ICTs in this industry consist of various components that include computerized
reservation systems, teleconferencing, video, video brochures, management
information systems, airline electronic information systems, electronic funds
transfer, digital telephone networks, smart cards, mobile communication, e-mail,
and Internet.
        Chapter - 3

Macro environment:
The macro environment is the nation, region, society and community within which
the organization and its micro environment or industry ‘sits’. Some organizations
such as transnational and global corporations/bodies (e.g. Nokia, LG, Elcoteq,
Motorola) operate in many macro environments.

During your mobile report study, we are exposed to a wide range of tools and
frameworks designs to assess all two environments. We don’t want to pre-empt
all the possible techniques that we will be exposed to in the wide range of
courses that there are a number of particular tools that you will potentially cover.

PESTILE analysis a tool for examining the macro environment. Whether
operating in only one, a number or many such countries/markets/communities,
etc, a set of key factors or forces are said to impact on an organization’s strategy.

These are summarized by the acronym PESTILE which stands for:

   • Political forces and issues

   • Economic trends and forces

   • Socio-culture changes and trends

   • Technological changes and trends

   • Legal and regulatory issues and forces

   • Environmental changes and forces (i.e. the natural

Political forces and issues:
Policy makers are mulling over the question: can we trust the private sector serve
the interests of the people? Our industry is under close scrutiny. For its
performance. Especially, for its attitude towards the interests of the consumer.
And the world is watching: Is the Indian economy is resilient enough to absorb
the impact of dramatic technological revolution sweeping the globe. What we do
and how do we do will have far reaching bearing on these issues.
India's future is critically dependent on two factors.

    1. The pace and success of economic reforms.

    2. Countries ability to empower the Indian people with new technological
       tools of the knowledge age.

This will improve the image of our industry. This will give him strength to push
forward his progressive policies and garner support for them. This will give a big
boost to the reform processes.

Economic trends and forces:
Economic Factors the current economy in the India is very strong, boasting high
employment and a high average age. In such situations the public have
increased disposable income enabling a trend to spend money on luxury items.
Should the economy begin to slow down and many of the population fearing
recession, sales of mobile phones would suffer.

Businesses and individuals unsure of their financial standing would begin to
spend less on items not deemed necessary.

The way of avoiding such dramatic affects of economic change is to perceive the
goods as 'must have' products. Marketable to businesses as a return on
investment due to increased efficiency could be argued. This is less likely to be
adopted by individual users.

Socio-cultural changes and trends:
With the emerging trends in the mobile industry, with the effect of globalization
and liberalization there are great amount of technological and socio-cultural
change in the Indian counter Indian counter part. There has been both an
positive and negative effect of the introduction of mobile industry in India, even
though the positive changes and effect r more than the negative effect but they
have an effect on each other.

   •   There is increasing concern with the number of masts being erected which
       form the networks supporting the mobile phones.
   •   As the number of mobile phone users increase; the public are becoming
       concerned of the impact masts are having upon their immediate
       environment. Although masts have reduced in height, this reduction has
       been accompanied with need for them to be closer to the user.
•   It is necessary to be sympathetic to these concerns and where possible
    disguising the masts will show an increased attention to the public.

•   Public users have a desire to request information and receive this
    immediately; this has become a priority in today's fast moving society. This
    means people have less patience to wait for the information desired and
    this is reflected in the culture of mobile phone use.

•   The government has invested in independent research into health affects
    of mobile phones. The outcomes have been inconclusive, however
    scientists have stated the use of mobile phones does affect brain activity.
    This is not proof of damage, however the government is keen to have an
    answer and this could affect the use of future mobile phones.

•   The intervention of government noticing the escalating crimes focused on
    or around mobile phones has an impact on their development. The
    phones have to be less appealing to thieves by some form of internal
    security as phone thieves begin to target children equipped with a mobile
    phone by parents or guardians for safety reasons

Companies must, therefore, awake to this ground reality. should be able to
take new technological advancements and their fallout in our stride. Better
product and service offerings at cheaper prices will be the order in the
industry. There is no sense in lamenting and resisting this inevitability. The
speed of technological innovation and product improvement and lower prices
will be unrelenting. We will be living in a situation of continuous uncertainty.
There is an urgent need to prepare carefully to meet this eventuality

According to us the companies have to come up with new strategies to over
come these socio cultural problems, as to satisfy their needs and demand.
Technological changes and trends:

Technology has shown a tremendous change in the entire trends of both the
ends of human imagination. The computer industry has pocketsize computers
that are mobile. And the communications industry has mobile handsets that

Two factors related to the technological changes in the mobile industry are

   1. Technology

   2. Competition


   •   Capacity:     New technologies such as optical fiber have enormous
       capacity to carry information. The emerging new aspects of
       communication like EDGE technology, GPRS , MMS, etc also have
       created a revolution in the industry.

   •   Digitization: Telecommunication networks are becoming         totally digital,
       so that any type of information, including voice and video, may be sent as
       a stream of bits in a compressed form and reconstructed for use at the
       receiving end.

   •   Ubiquity : Advances in wireless technology such as cellular radio,
       Personal Communications Services (PCS), and low earth orbiting
       (LEO) satellites will provide mobile and personal communications virtually

   •    Convergence: The convergence of telecommunications, data
       processing, and imaging technologies has ushered the era of

•    Microwave systems transmit voice and data through the atmosphere as
     super-high-frequency radio waves

•    One particular characteristic of the microwave system is that it cannot
     bend around corners; therefore microwave antennas must be in "line of
     sight" of each other

•    The following are some of the characteristics of the microwave system:

1. High Volume
2. Long distance transmission
3. Point to point transmission
4. High frequency radio signals are transmitted from one terrestrial
   transmitter to another
5. Satellites serve as a relay station for transmitting microwave signals over
   very long distances.

Satellite System

•     Satellites work by receiving and Transmitting radio signals from one earth
     station to another

•     Satellite system has the advantages of transmission from point to
     multipoint systems, which means transmissions can be beamed to areas
     that are geographically dispersed.

•     Has the potential to beam signals across different countries; this has
     improved international telephony enormously

•    Has also improved television signal transmission as well

There was a time when telecommunications seemed to be natural monopoly
worldwide. Now, the trend is changing; more and more national governments are
liberalizing and introducing competition.

The liberalization of the telecom sector has brought competition to the telecom

With the increase in demand of communication in the country there is an adverse
affect on the no of industries coming up with their product. This in turn leads to
the competition between them so as to survive them selves in the market.

The competition between companies like Nokia, Samsung, Motorola, etc has
created a great rivalry between them against the product, technology, and the
hold in the market all these has a great impact on the competition between the

Legal and regulatory issues and forces:

Why do we need regulation?
Regulations are the set of dos and don’ts that are being implemented on different
sectors of industry for their safe operation in the market. The set of regulations
are all about the following:

   1.   serve and protect public interest
   2.   allocation of scarce resources
   3.   provision of services
   4.   universal service and universal access
                             Serve and protect
                              public interest:
                               Affordable Prices and
                                 quality of service

                                                         Allocation of
                                                       scarce resources:
Provision of services:                                  Spectrum allocation
   From stagnant monopoly       Regulatio
     to active competition

                               Universal service
                             and Universal access
                              Types usually distinguished:

 The industry-specific                  Multi-sector Regulators          The economy-wide
       regulator                      (Public Service Commissions)      competition regulator

 Regulates one sector (Telecom)            Regulate telecom and          Uses competition law to
     and may also regulates               other industry sectors:         regulate all sector in
adjunct sector such as broadcasting     Electricity, Water, transport    an economy or country

The regulatory body holds well with the following industry specific

   1. Determine the size of the telecom market (providing licenses)
   2. Foster healthy relations between the different companies (Overseeing
       interconnection agreement)
   3. Address consumer complaints and solve them.
   4. Protect consumers against high prices,
   5. Poor quality of service, inadequate infrastructure, limited services, unsafe
   6. Resolve disputes, regulate for fair competition (avoid the abuse of
       dominance in the market place)
   7. Ensure efficient use of the frequency spectrum
   8. Encourage investment, innovation and optimum growth of the sector
   9. Administer the numbering plan so that there are sufficient numbers
   10. Monitor compliance with national and international telecommunications
       equipment suppliers and service providers
Forms of regulators

Mode1- Government owns and operates the network, while also assuming
the roles of policy maker and regulator.

Mode2- Networks are privately owned and operated, but the government,
through one entity, makes the policy for and regulates the market.

Mode3- Networks are privately owned, while the government sets policy for
the industry. Regulation is given to an independent body that either reports to
the government or acts as an independent commission.

Mode4- This is the model in which networks are privately owned, with little
specific industry regulation. National competition laws regulate all sectors and
telecommunications disputes are settled by the courts.

Environmental changes and forces:

Environmental changes may not be a major effect on the mobile industry in
India. As there are no major environmental issues to be covered, the trends of
its manufacturing process. As far as possible the whole manufacturing
process of a mobile industry, they should not affect the environment as such.

Indian companies as well as the Government have been proactive in taking
appropriate steps to tackle security concerns. Many Indian companies are
aware of and are opting for international security standards such as ISO
17799, BS7799, COBIT and ITSM. NASSCOM, with the Indian government,
has laid the foundation for the required legal framework.
            Chapter - 4

Micro environment:

The Microeconomics of Competitiveness is concerned with the determinants of
competitiveness and economic development viewed from a bottom up,
microeconomic perspective. While sound macroeconomic policies, stable legal
and political systems, and the accumulation of factors of production affect the
potential for competitiveness, wealth is created at the microeconomic level. The
strategies of firms, the vitality of clusters, and quality of the business environment
in which competition takes place are what ultimately determines a nation’s or
region’s productivity and wealth.

Increasing competition is a key trend in mobile markets today. To prepare for a
highly competitive environment, mobile operators must analyze the driving
forces behind the competition and learn from highly competitive markets. the
lessons learns can then be translated into proactive measures in other areas
than price competition.
“Five forces model” developed by Michael Porter. This model is used to analyze how
the competitive environment impacts on the market for mobile industry. Apart from
the five forces, the aspect of fixed mobile convergence is also taken into account. For
the forces relating to suppliers, buyers and substitutes, it is increasingly difficult to
distinguish between fixed and mobile perspectives, making it necessary to add
Convergence aspects to the model.

“Five forces model” is illustrated above.

Five competitive forces

• The regulatory environment largely defines the threat of new entrants to the mobile
voice market.

• The degree of rivalry among competing operators depends on the number of players
active in the market and the distribution of market share among these players. Growth
in mobile voice traffic is of significance since, in highly penetrated markets, subscriber
gains are achieved mainly from competitor churn.

• Bargaining power of buyers increases as markets mature with better informed buyers
and reduced buyer switching barriers due to the introduction of mobile number

• Substitutes to mobile voice are mainly fixed telephony and Voice over IP (VoIP)
telephony, with the main threat being lack of substitution to mobile voice.

• With a growing number of equipment suppliers, bargaining power over mobile
operators depends on growth in the equipment market. The bargaining
Power of suppliers also relates to who is buying, e.g. a major global operator or a small
niche player.

Threat of new entrant:
This is perhaps the most dominant force influencing the nature of the competitive
landscape. High barriers to market entry discourage new competitors, lowering
overall competition within the market.

The most common barriers to entry are high capital requirements (such as
investment in manufacturing plant and equipment), scale economies (where the
cost of producing a product decreases as volume increases), product
differentiation (where existing products have high consumer loyalty), government
regulation, and absolute cost (where one or more competitors have non-
replicable advantages, such as proprietary technology or access to cheaper raw
In future various mobile industry opportunities and challenges exist in the areas of
markets, value systems and technologies.

In future the traditional rapid market growth by subscriber numbers can not
continue for a very long time and the growth must be found from replacing the
equipment and extending to new not well identified areas without just a single
prominent market opportunity. In the access side it may lay in 3G, new local
area radio technologies,new wide area radio technologies, unlicensed spectrum
radio technologies or in the intelligent management of several of these. In
the services side the market opportunities may lay in VoIP, music, TV, telematics, just
to mention some. In the mobile devices side it may lay in new experiences or
applications facilitated by integrating new functions and features. To make the picture
even more fragmented, the opportunities will vary among the geographical markets.
Due to all of these, the mobile industry will most probably see many market
flops. The sooner the bad candidates can be rejected the better.

The mobile industry value system may change due to horizontal layering of the
technology, new vertical functions in the subscriber services and revolutionary
changes in service provision. All of these pose opportunities and threats for
the traditional big mobile industry players. They are threats will materialize if they don’t
adapt to the changes.

New technology layer manufacturers may capture high value adding links in the value
system. New vertical functions may capture the brand and initiative of the mobile
device development. Revolutionary changes like bypassing traditional operators in
large scale may lead to a change in dominant infrastructure architecture and be an
advantage for the IT technology.

Bargaining Power of suppliers:

Suppliers, too, can influence the competitive landscape by increasing input cost
prices, restricting supply or altering the quality of raw materials. If there are
fewer suppliers, or intense demand (as in the case of the resources industry),
then suppliers are well positioned to dictate trading terms.

Bargaining Power of customers:
Consumers compete with industry participants by demanding cost reductions,
improvements in service and quality, and playing competitors off against one
another. The greater the degree of 'consumer power', the more competition
there is (eroding profitability). One of the primary sources of consumer power is
access to information about competing products. Where information access is
symmetrical, consumers can more readily compare products and prices.
Witness, for example, the dramatic changes to the travel industry occasioned by
increased consumer access to fare and flight details via the web.
Threat of substitutes:
 In all markets there is a degree of product substitution. Consumers can
substitute one brand of dog food for another, in the same way different model
cars, mobile phones and TV sets are substitutable. The easier it is for
consumers to substitute one product for a rival product providing the same
function, the greater the competition and the harder it is to extract premium
profit margins

Rivalry among existing competitors:
The degree and nature of competition among rivals in a growing market with a
myriad of equal-sized competitors will differ considerably from that of mature
markets with fewer, larger competitors. It is important to understand the locus of
competition - price, service, advertising, or product innovation - and how this
competitive dynamic will change in response to new entrants (e.g. aggressive
price discounting or advertising battles). Here each and every industry in
specific has a competitor for it self. To face the challenges and competition from
competitors have to come up with new strategies and market improvement
 Chapter - 5

The inner and outer world of NOKIA:

This report accounts for Nokia understands of the environmental aspects of its
product and operations, its policy and strategy for counteracting adverse
environmental impacts, and the systems and resources in place for implementing
that policy and strategy.

Nokia’s approach to environmental issues is based on life cycle thinking covering
the environmental impact of its products Nokia’s own activities focus on design
assembly and marketing of products. Global warming and depletion of non
renewable natural resources make up the global backdrop of nokia’s
engagement with the environment.

At Nokia, environmental activities are integrated into business activities.
Products and operations at nokia have an impact on two global environmental
issues in particular, climate change and the depletion of natural resources.

All Nokia production sites had certified ISO 14001 environmental management
Systems (EMS) by the end of the year 2000. . For these facilities Nokia will not
Seek external certification but will instead rely on internal verification.

Design for Environment activities are integrated in the product creation
processes of the business groups. The two current focus areas are recyclability
and the material content of products. Nokia is well prepared to meet the
requirements of new legislation under preparation in Europe and elsewhere.

Nokia aims to reduce the environmental impact of its products over their entire
life cycle. Our work is based on a continuously developing understanding of the
environment- talk aspects and impacts of the complex process chain and
extensive supplier network characteristic of the communication industry.
Nokia’s research and development organization keeps close contact with
independent research institutions. The aim is to stay abreast of advances in
basic research and to identify new environmental issues with a possible bearing
on Nokia’s business operations.

Nokia welcomes efforts to find commonly acceptable metrics for eco-efficiency
and has participated in the testing of various proposed metrics.
Life-cycle thinking

The life cycle of products begins with the extraction of raw materials and ends
with recycling and waste treatment and the reintroduction of materials into the
economic system.

The environmental aspects of Nokia products are linked with the use of materials
and energy at the different stages of their life cycle. The environmental impacts
are associated with resulting waste and airborne and waterborne emissions.

Environmental policy:

Nokia’s commitment to continuous improvement in environs- mental issues is
stated in our environmental policy, published in 1994 and revised in 2002.
Environmental and business men are jointly responsible for implementing the

Management of external and internal stakeholder relations runs through all
Nokia operations. In this report, we discuss only those issues of stakeholder
relations relevant to Nokia’s environmental management and performance.

Internal stakeholders:

Nokia’s environmental performance rests on the competence and motivation of
its personnel. At Nokia, the environment is everybody’s responsibility and an
integral part of daily business. Various surveys are conducted to evaluate the
commitment of our personnel on environmental as well as business and social

 External stakeholders:
Nokia is engaged in a continuous dialogue with its external stakeholders to stay
abreast with issues they see as important now and in the future, as well as better
understand what is expected of Nokia and how this can be achieved.

Nokia in society

In investor relations, our focus is sustainable shareholder value. To underline this
commitment, Nokia has successfully sought inclusion of its share in indexes that
are based on evaluating our performance against various criteria of sustainable

Nokia engages in extensive dialogue and involvement with governments and
inter-governmental organizations (IGO). These include the United Nations,
European Community and the International Chamber of Commerce (ICC).

Management principles:
Nokia applies global operating standards for business practices, transfer of
technology and management systems throughout its business units. These
standards are applied when establishing a new site in any country. Nokia has a
large number of contract manufacturers who share the company’s technology
and expertise. The company encourages its contractors to adopt Nokia
guidelines insofar as they are applicable, taking into account local

Participation in research projects

Nokia’s business groups have been actively involved in a range of end-of-life
research activities during 2001–2002. Nokia Mobile Phones has investigated
electromagnetic shielding and recyclability
Micro environment:
 Supplier Network Management

 Nokia designs and manages its products with a view to their total life-cycle
 environmental impact. A large part of the environmental impact of Nokia
 products arises from the activities of its suppliers. Sound supply chain
 management is important since Nokia increasingly purchases supplies from
 around the world.

 Environmental Management Systems

 Nokia uses certified Environmental Management Systems
(EMS) as a management method for controlling and improving the stages of the
product life cycle covered by its own operations.

Analysis confirms that energy consumption is one of the most important
environmental aspects of Nokia’s production. The main environmental impacts of
energy consumption are airborne emissions from energy production at power
plants that supply Nokia with the electricity and heating energy it uses.

Water at Nokia sites is mainly used for sanitary and catering purposes, with only
small volumes used in the production processes. As a result, total water
consumption at a plant depends on the number of employees

End-of-Life Practices

End-of-life Practices (EoL) are aimed at the collection of equipment at the
end of its service life with a view to recovering its material and energy
content as well as ensuring the safe treatment of substances that may
cause harm to people or the environment if not disposed of properly.
Risk management
Nokia is adopting a common and systematic approach to management of all
kinds of risks across all of our businesses, platforms and processes. The Nokia
Risk Policy approved by the Nokia Board provides the basic guidelines of what
risk and risk management means in practice for Nokia. Risk management is not
a separate process or action but a normal business and management daily
practice and is a normal management capability.

Recycling recovers value
There were 380 million mobile phones put on the market in 2001. They
contained approximately 100–200 tons of lead, which is about the same amount
of lead as is contained in about 1 000 starter batteries. These 380 million phones
correspond to about 40–50 000 tons of waste, which is a small fraction of the
estimated 150 million tons of electronic waste generated every year.
Their goal is to be the industry benchmark in environmental performance,
integrating environmental thinking into our strategy and operations, and making
the environment everybody’s business.

 India being such a developing country, still has to get its pace increased to meet up the
 global challenges in the mobile manufacturing industry.although there is an steady rise in
 the growth in the demand of the mobile phones in the country but there is slow growth in the
 manufacturing of these hand sets. Since both the Macro and the Micro environment makes
 a great impact on the growth. So for any mobile manufacturing industry ,rendering its
 service in India will have to concentrate on all the factors which adversely affect the growth
 of the industry.


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