MARKETING MANAGEMENT

Marketing Management: Mobile Phone

Mobile Phone Marketing

The mobile phone market

The birth of the mobile communication industry resulted of a professional need, which means that people on the move sometimes had to be contacted urgently. AT&T's Bell laboratories made it possible in 1979 in the United States permitted thousand of people to switch messages in the same tiny bandwith. The Nordic area was also one of the pioneers, establishing cellular services in 1978 with the Nordic Mobile Telephone.

In 1982 was introduced the GSM( Groupe Spécial Mobile) by France Telecom Research & Development in order to establish an European standards system. In 1985, the European Commission decided to impose this standard, and in 1987 thirteen countries signed a memorandum concerning the implementation of the GSM, which has become in 1989 the "Global System for Mobile Communications".

The goals of this system consisted in two points:

Mobile phones are standardized and work on every operator' networks.

The network' elements (basic stations, switches...) are standardized, so it could be several suppliers and the competition can take place.

The American market had also his standard which called "TDMA".

By the beginning of 1993 was cellular service in place in more than 90 countries, resulted in several kinds of products like cellular phones obviously, but also pagers and PDAs( personal digital assistants). Pagers can received short messages in data and voice, and PDAs consisted in sending facsimile and e-mail, and eventually voice communication. But our interest will be focused on cellular phones because first, they have the advantage to provide an instant confirmation of receiving messages, and secondly, the main activity of Nokia is to produce them. Even if we will also pay attention to the activity of operating systems, because it's an important field for Nokia who wants to become the number one in the world, and also because it's the main activity of Ericsson, one of the most competitor of Nokia.

Main producers in 1993

The European market was already dominated by the Nordic region suppliers, which were the Swedish L.M.Ericsson and the Finnish Nokia Mobile Phones. But the world leadership was Motorola, of course because of the importance of the American market. At the end of 1993, the world market shares were represented by 36% for Motorola, 20% for Nokia and 10% for Ericsson. The other European producers were Siemens and Technophone Ltd, but they were especially focused on their own market, which were Germany and United Kingdom. There were also other small companies like Storno and Cetelco, and Majors like Philips and Bosch which were under original equipment manufacturer agreement.

In the rest of the world (Asia for example), we could find Japanese producers like Panasonic (representing 4% of the world market in 1993) and Nec.

This period was really difficult for small producers, because the time of life for a phone model was very short, between six months and a year, because of a new more sophisticated version. The three largest firms innovated in a very fast way compared to the small ones, which couldn't managed to ...