Nokia stoops to instalments as urban India becomes key market
Published: 21 August, 2009
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Comments from the CEO of Nokia, Olli-Pekka Kallasvuo, this week touring India, have triggered oceans of copy as he pushed two very clear messages - first that Nokia was getting into the hire purchase business for phones in rural Indian markets and second that Nokia was definitely planning to enter the Netbook market.
You could argue that Nokia tablets mean that the Finnish giant is already in the Netbook market, but clearly its joint work with Intel, only recently announced, has caused greater speculation that it will go down a more traditional design route, perhaps with a single Linux variant to emerge out of its own Maemo and Intel's Moblin, which may perhaps run on either Intel Atom platforms or Arm based devices.
But Kallasvuo also talked openly about a trial it has carried out in financing, which it now plans to extend throughout 12 Indian states. It partnered with a local finance organization which ran a pilot across 2,500 villages in the southern states of Andhra Pradesh and Karnataka. Under the scheme Nokia handsets were purchased by charging customers 100 Rupees ($2) a week for up to 25 weeks.
As India soaks up 10 million new phones a month, many of these sales in rural areas, it is stretching the ingenuity of even the world's biggest phone maker, to come up with ideas on how to get them funded within the rural community.
"There is a lot of opportunity here (in India) and we need to make mobility more accessible to all people, including those in rural areas, which is the next frontier to be conquered," Kallasvuo said to the Economic Times.
Kallasvuo went on to say that he expects 500 million mobile phone users in India by 2010, and believes that much of that growth will take place in non-urban markets, pointing out that rural penetration in India is still very low at 13%.
He also said that India is also a good market for smart phones, acknowledging that most people thought it was a low-end market but saying that the N97 and N86 were selling nicely there.
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