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Nokia to close flagship US stores

11 декабря 2009

Nokia said Thursday it will close two flagship stores in the US, the latest sign of a change in strategy for the world's largest cellphone maker which has struggled in the North American market.

Nokia also said it will close one of two stores in London and try to find a relocation for its store in Sao Paolo. The US stores set to close are in New York and Chicago. Nokia currently has 12 flagship stores worldwide after the first was opened in Moscow in 2005.

The store closings are part of the global retail strategy and a realignment to focus more on cooperation with operators and other retailers, the company said. Nokia also recently signalled it would shift focus increasingly to applications and software and launch fewer new phones in a drive to boost margins and stay ahead of rivals like iPhone-maker Apple Inc., which has a strong and growing retail presence.

Nokia has had mostly single-digit market share in the US compared with its 37% global share, so it is no surprise that the company wants to redirect its marketing investment in the country from flagship stores to operator-specific activities, said Ben Wood, research director at London-based CCS Insight.

Nokia has failed to sufficiently differentiate its products for US customers, preferring to use its economies of scale to produce similar products for the global market.

"We're continuing to expand in the USA, but consumer purchases are different in North America than in other parts of the world," said Ingrid Peura, Nokia's head of communication in Europe, adding that that 90% of purchases in US are made through wireless carriers dominated by AT&T Inc., Verizon Wireless, Deutsche Telekom's T-Mobile USA and Sprint Nextel Corp.

Verizon Wireless is a joint venture between Verizon Communications and the UK's Vodafone Group PLC.

"We've no plans currently to close any more stores," Peura said.

Compared with Apple's retail stores, Nokia's flagship stores haven't been particularly successful, said CCS Insight's Wood.

Nokia cellphones cater right across the segment from high-end smartphones to low-cost mass-market devices, and in a recent departure it recently launched its Booklet 3G netbook, but it lacks the wide breadth of products that rivals like Apple and global no. 2 handset maker Samsung Electronics Co. Ltd. can bring to a retail store.

Apple already has over 240 stores worldwide, according to its Web site, including 15 in the New York area alone from a total of 221 in the US, 25 in the UK, and stores in Australia, Canada, China, France, Germany, Italy, Japan and Switzerland, and there are unconfirmed press reports that it plans further expansion and openings in countries where it so far lacks a retail presence.

As Nokia shrinks its retail presence, other brands are taking a different path. Microsoft Corp. recently opened its first store in Scottsdale, Ariz. But Amazon.com Inc. recently said it has "no plans to open physical stores anywhere in the world," amid reports that it was scouting real-estate locations around London.

Meanwhile, Nokia last month said it plans to limit the number of new handset launches because hardware is getting less important compared with services like its Ovi online portal, Comes With Music offering and navigation, as a means to differentiate it from rivals. Earlier this year, the company set up a new unit to better integrate services with its hardware.

The mobile-phone industry has suffered from several quarters of falling sales as consumers have reined in spending in the wake of the economic downturn. Research firm Gartner said in October that it expects the handset market to return to year-to-year growth in the fourth quarter as most countries emerge from recession.

Источник: Total Telecom

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