China is expected to play a big role in determining the success of Nokia Corporation (ADR)(NYSE:NOK) and Microsoft Corporation(NASDAQ:MSFT) in their bid to be significant players in the smartphone industry.
The country is now the world’s largest smartphone market and is rapidly shaping up as an important determinant of success for manufacturers of smartphones.
Finish handset maker Nokia, which is making a comeback bid in the smartphone segment with its new range of Lumia handset is leaving no stone unturned to ensure that it gets the best launch in the country.
Last week it launched its Lumia 920T in China, in a tie-up with China Mobile, the largest carrier in the world. The strategy worked, gauging by the response to the phone, which saw it being sold out in a mere two hours while the event itself drew large crowds.
Nokia is also partnering with the second largest Chinese carrier, China Unicom which is rumoured to sell the flagship 920 for free on a three-year contract.
Microsoft is partnering Nokia with its new operating system Windows Phone 8 and is equally anxious for success in China, as a toehold in that country will give it the leverage that it is looking for.
The subscriber base that the companies are looking at is huge – 950 million subscribers of whom only about 16 percent use 3G at present. That presents a huge opportunity.
While the high-end Lumias may be out of reach of the vast majority of the population, Nokia is hoping to create enough of a brand equity in the country so that it can sell its inexpensive versions of the Lumias such as the 820 and 620.