Copyright©2009GrailResearch,LLCMobilePhonesinChinaAStudyofNokia’sSuccessApril2009|Copyright©2009GrailResearch,LLCApril20092NokiahasledtheChinamobilephonemarketsince2004,andtodaycontrolsnearlyhalfofthevaluablestudentmarket,indicatinghighpotentialforfuturemarketsharegrowth•Nokiaholds32.5%shareoftheChinesehandsetmarket•49.3%ofuniversitystudentscurrentlyownaNokiaphone•72.7%ofallstudentsanticipatethattheirnextmobilephonepurchasewillbeaNokiaNokia’ssuccessisderivedfromtheirconsumer-orientedstrategies:•Prioritizing“peoplefirst”andunderstandingconsumerneeds•Appealingtospecializedconsumergroups•Leveragingbroadchannelsofdistribution•Localizingresearch&developmentcapabilitiesandmanufacturingcentersMobilePhonesinChina–Nokia’sSuccessExecutiveSummarySources:ChinaMobilePhoneSurveyamongCampusStudents,Dec2008,GrailResearch;‘MobilephonemarketshareinQ1,2008’,DCCI(DataCentreofChinaInternet)OverviewandKeyHighlights|Copyright©2009GrailResearch,LLCApril20093CurrentMarketShareandFutureBrandChoiceMobilePhonesinChina–Nokia’sSuccessMarketFactsCurrentPhone2Nokia(249)Samsung(75)Motorola(48)SonyEricsson(38)NextPurchase3Motorola2.8%5.3%16.7%5.3%Nokia85.1%53.3%62.5%65.8%Samsung4.0%33.3%2.1%5.3%SonyEricsson2.0%2.7%10.4%13.2%Others6.0%5.3%8.3%10.5%BrandChoiceforNextPurchase,as%ofCurrentBrandUsers35.3%5.9%9.6%16.7%32.5%15.8%7.5%14.9%9.5%49.3%7.0%4.0%9.3%6.1%72.7%NokiaMotorolaSamsungSonyEricssonOthersTotalMarketShare1StudentMarketShare2StudentFutureChoice3Notes:1SampleselectedbyarigorousprocessaccordingtoCNNICandNationalBureauofStatisticsofChina.2Question–“Whichbrandofmobilephonedoyoucurrentlyown?”;3Question–“Whichbrandofmobilephoneareyoumostlikelytopurchasenext?”;GrailAnalysis,Totalrespondents=505,invalidrespondentsexcluded.Sources:GrailResearchChinaMobilePhoneSurveyamongCampusStudents,Dec2008;‘MobilephonemarketshareinQ1,2008’,DCCI(DataCentreofChinaInternet).NokiaalreadyholdsthelargestportionofmarketshareinChinaandshowshighpotentialforfuturegrowth–particularlyamongstudents,thenextgenerationofpurchasingpower|Copyright©2009GrailResearch,LLCApril2009449%15%10%8%3%15%NokiaSamsungMotorolaSonyEricssonLenovoOthersMobilePhonesinChina–Nokia’sSuccessBrandAwarenessAlthoughseveralmobilephonebrandshavehighlevelsofawarenessoncampus,NokiacontinuestodominatethemarketNotes:1Question–“Whichbrandsdoyouknow?”;2Question–“Whichbrandofmobilephonedoyoucurrentlyown?”;GrailAnalysissamplesizen=505Source:GrailResearchChinaMobilePhoneSurveyamongCampusStudents,Dec2008BrandAwareness1MarketShare299.8%Nokia98.6%Samsung96.6%Motorola88.9%SonyEricsson80.2%Lenovo53.5%Amoi52.7%Haier50.9%Konka|Copyright©2009GrailResearch,LLCApril20095TopFeaturesDrivingSatisfactionwithMobilePhone1ReasonsforSatisfactionwithCurrentMobilePhone,byBrand259.8%31.3%HighQuality33.7%20.8%GoodSignal28.5%16.7%ManyFunctions18.1%18.8%FashionableAppearanceMobilePhonesinChina–Nokia’sSuccessKeyDriver–ConsumerSatisfactionNokiaoutperformscompetitorsonqualityandfunction–themostimportantdriversofcustomersatisfactionHighQuality“Once,myroommatedroppedherNokiafromtheupperbed,andherphonesplitintoseveralpieces,butitstillworkedafterbeingreassembled.”–MobilephoneownerwhoplanstoswitchtoNokiabrandFunctionandFeatures“Nokia’soperatingsystemandqualityarebetterthanthatofothermobilephonebrands.”–Nokiaownerandexpectedrepeatpurchaser44.5%Quality27.5%Function18.5%Appearance4.3%Brand3.4%Price1.7%OthersNotes:1Question-“Whatarethetopthreeconsiderationsforyoursatisfactiononmobilephone?”GrailAnalysissamplesizen=465;2Question–“Whatarethekeyreasonsforyoursatisfactiononcurrentmobilephone?Pleasestateatleast2reasons.”GrailAnalysissamplesizeforNokiausersn=230,Motorolausersn=44Source:GrailResearchChinaMobilePhoneSurveyamongCampusStudents,Dec2008|Copyright©2009GrailResearch,LLCApril20096Nokia’ssuccessagainstcompetitorsintheChinamarketcanbetracedtotheirconsumer-orientedstrategiesandinitiatives…MobilePhonesinChina–Nokia’sSuccessStrategiesforSuccess…“PeopleFirst”PolicyDiverseProductPortfolioBroadDistributionNetworksLocalizedCenters1423|Copyright©2009GrailResearch,LLCApril20097Unlikecompetitors,Nokia’sfirstpriorityinstrategy,planning,anddevelopmentisrespondingtoconsumerneeds1“PeopleFirst”Policy“PeopleFirst”PolicySource:GrailResearchChinaMobilePhoneSurveyamongCampusStudents,Dec200885%ofstudentsthatcurrentlyownaNokiaphoneplantopurchaseaNokiaagain.ThisisthestrongestandmostconsistentdisplayofbrandloyaltyConsumersindicatethatqualityandfunctionarethemostimportantfeaturesofamobilephone–Nokiasatisfiestheseneedsmorethananyothermobilephonebrand|Copyright©2009GrailResearch,LLCApril20098TobetheNo.1internationalenterprise,delightinggovernment,serviceprovidersandconsumers–CompanyStrategyNokia’sstrategyfocusesonpeople,whileMotorola,withhalfthemarketshareofNokia,insteadhighlightstechnologyadvancements1“PeopleFirst”PolicyTechnologyFocusedR&DInvestments•EstablishedMotorola(China)TechnologyLtd.in2004toconsolidateitsR&DcapabilitiesinBeijing•InvestedatotalofUSD800MilliononR&DinChinabytheendof2006TechnologyandCelebrityAdvertising•Highlightscelebritiesandhightechdevel