Introduction Nokia

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nokia and samsung

RESEARCHMETHODOLOGYPROJECT REPORT

Akash gulati (09) Abhishek kumar(05)Abhishek Mehrotra (06)Bhabani Prasaddehuri (14)4/13/2012


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INTRODUCTION

Nokia Powerful technology brand.

'Nokia' one the world's most valuable brand has distinct personality. The slogans.'We call this human technology', 'only Nokia human technology enables you to getmore out of life' and 'connecting people' emphasize human side of technology,thereby resulting in brand personality of trusted friend.

Nokia Corporation is a Finnish multinational communications corporation that isheadquartered in Keilaniemi, Espoo, a city neighbouring Finland's capital Helsinki.

Nokia is engaged in the manufacturing of mobile devices and in convergingInternet and communications industries, with over 123,000 employees in 120countries, sales in more than 150 countries and global annual revenue of EUR 41billion and operating profi t of 1.2 billion as of 2009.

It is the world's largest manufacturer of mobile telephones: its global devicemarket share was 30% in the third quarter 2010.

Nokia produces mobile devices for every major market segment and protocol,including GSM, CDMA, and W-CDMA (UMTS). Nokia offers Internet services suchas applications, games, music, maps, media and messaging through its Oviplatform. Nokia's subsidiary Nokia Siemens Networks producestelecommunications network equipment, solutions and services.

Nokia is also engaged in providing free digital map information and navigationservices through its wholly-owned subsidiary Navteq.


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SAMSUNG MOBILES Although its line of sparkling smartphones seems fresh and new, SamsungMobile has been around since 1983. Samsung Mobile's parent company,Samsung Electronics, was founded in 1969. Once known for its televisionsand other home appliances, Samsung recently eclipsed heavyweightsSony Ericsson and Motorola as one of the biggest cell phonemanufacturers in the world .

A Rough Beginning

1. Samsung Mobile's first ever offering was a car phone it introduced in1986. Because of poor reception and sales, manufacturing washalted. From this point until the early 1990s, Samsung Mobile wouldintroduce mobile phone models, but sales were low because demandwas low. The designs of these early attempts were bulky, andreception was poor. With Motorola holding a sizable advantage over the rest of a fledgling mobile phone field, Samsung nearly dropped itsMobile division.

Turning Point

2. In 1993, Samsung Mobile released the SH-700 series, which boasteda smaller and sleeker design and better sound quality. With a better product and a more aggressive marketing campaign, Samsung wouldreclaim more than half the mobile phone market share in Korea fromMotorola.

The Global Market

3. Samsung cell phones found its way into American hands for the firsttime in 1996, when they partnered with Sprint on a line of sleek andcompact phones. A few short years later, South America and Japanwere enjoying the high-end design of Samsung Mobile phones.

Samsung Mobile Today


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4. In early 2009, Samsung Mobile's global market share stood at morethan 17 percent, second only to Nokia. In the 3rd quarter of 2008, for the first time in its history, Samsung Mobile shipped more than 50million handsets in a quarter--despite a global recession.

Samsung Facts

5. Lee Byung-chull founded Samsung Group in 1938, naming the start-up company a Korean word which translates to "three stars" inEnglish.Samsung Mobile enjoys agreements with major cell phone serviceproviders such as T-Mobile, AT&T, Sprint and Verizon Wireless.In early 2009, Samsung Mobile and T-Mobile introduced the Memoir,a cell phone with a "Best in Class" 8-Megapixel camera.


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WHY

The study wishes to find out the Reason for falling market share of Nokia ascompared to Samsung .

COMPANY3Q08 3Q08 3Q09 3Q09UNITS MARKET SHARE UNITS MARKET SHARE

NOKIA 117461 28.20% 113466.2 36.7SAMSUNG 71671.8 17.20% 60627.7 19.60%

COMPANY1Q10 1Q10 1Q11 1Q11UNITS MARKET SHARE % UNITS MARKET SHARE %

NOKIA 107556.1 25.10% 110105.4 30.60%SAMSUNG 68782 16.10% 64897.1 18.00%

Nokias market share has dropped to 25 percent, pretty on par with its market sharein 1997. Between Q1 2010 and Q1 2011, Nokias share fell 5.5 percentage points.While Nokias share was plummeting, worldwide mobile devices sales jumped 19percent year-over-year.

WHAT

An analytical study to find out the downfall in the sales volume of Nokia ascompared to Samsung

Nokia sold 117.5 million units, compared to 113 million the year before, giving it

a market share of 28.2 percent, a decline of nearly eight percent over the samequarter last year. Through this research Nokia wants to find out the reason for itsfalling market share by considering following Variables.

OBJECTIVES


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The research will find out the possible reasons for the downfall of its market shareas compared to Samsung.This research may also help Nokia to realize its areas of concentration and make segment for ultimately solving the problem.

By this research Nokia may also be able to find the possible solution for thefalling market share and take necessary actions.

By conducting this research Nokia may also be able to increase and sustain itleadership in Mobile Segment.


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VARIABLES

Independent= Dependent=Market Share

COGSDEPRICIATION

GROSS INCOM

NON OPERATING INCOME

EQUITY IN AFFILIATES

INCOME TAX

EPS

EPC

NET INCOME

EBI & TDA


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Annual Financials for Nokia Corp. ADS

Fiscal year is January-December. All valuesEUR millions.

2007 2008 2009 2010 2011

Sales/Revenue 51.06B 50.71B 40.98B 42.45B 38.66B

Cost of Goods Sold(COGS) incl. D&A

34.34B 34.26B 29.09B 30.98B 27.34B

COGS excludingD&A

33.13B 32.64B 27.3B 29.21B 25.78B

Depreciation &AmortizationExpense

1.21B 1.62B 1.78B 1.77B 1.56B

Depreciation 579M 723M 603M 599M -

Amortization of

Intangibles627M 894M 1.18B 1.17B -

Gross Income 16.72B 16.46B 11.9B 11.47B 11.32B


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2007 2008 2009 2010 2011

SG&A Expense 9.57B 10.12B 9.32B 9.24B -

Research &Development

4.69B 5.14B 4.97B 4.96B -

Other SG&A 4.89B 4.97B 4.35B 4.28B -

Other OperatingExpense

218M 417M 236M 240M -

Unusual Expense (626M) 1.47B 1.83B 520M -

EBIT after UnusualExpense

626M (1.47B) (1.83B) (520M) -

Non OperatingIncome/Expense

371M 342M 562M 429M 221M

Non-Operating InterestIncome 339M 353M 101M 138M -

Equity in Affiliates(Pretax)

44M 6M 30M - -


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2007 2008 2009 2010 2011

Interest Expense 43M 185M 243M 254M 102M

Gross InterestExpense

43M 185M 243M 254M 102M

Interest Capitalized 0 0 0 0 -

Pretax Income 8.27B 4.97B 962M 1.79B (1.18B)

Income Tax 1.52B 1.08B 702M 443M 290M

Income Tax -Current Domestic

2.21B 1.51B 736M 798M -

Income Tax -Current Foreign

- - 0 - -

Income Tax -Deferred Domestic

(687M) (433M) (34M) (355M) -

Income Tax -Deferred Foreign

- - 0 - -


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2007 2008 2009 2010 2011

Income Tax Credits 0 0 0 0 -

Equity in Affiliates - - 0 1M (23M)

Other After Tax Income(Expense)

0 0 0 0 -

Consolidated NetIncome

6.75B 3.89B 260M 1.34B (1.49B)

Minority InterestExpense

(459M) (99M) (631M) (507M) (324M)

Net Income 7.21B 3.99B 891M 1.85B (1.16B)

Extraordinaries &DiscontinuedOperations

0 0 0 0 0

Extra Items &Gain/Loss SaleOf Assets

0 0 0 0 0


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2007 2008 2009 2010 2011

CumulativeEffect -AccountingChg

0 0 0 0 -

DiscontinuedOperations

0 0 0 0 0

Net Income AfterExtraordinaries

7.21B 3.99B 891M 1.85B (1.16B)

Preferred Dividends 0 0 0 0 0

Net Income Availableto Common

7.21B 3.99B 891M 1.85B (1.16B)

EPS (Basic) 1.85 1.07 0.24 0.50 (0.31)

Basic Shares

Outstanding 3.89B 3.74B 3.71B 3.71B 3.71B

EPS (Diluted) 1.83 1.05 0.24 0.50 (0.31)


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2007 2008 2009 2010 2011

Diluted SharesOutstanding

3.93B 3.78B 3.72B 3.71B 3.71B

EBITDA 8.14B 7.54B 4.12B 3.76B 268M


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SAMSUNG INCOME STATEMENT

Fiscal year is January-

December. All valuesTWD millions.

2007 2008 2009 2010 2011

Sales/Revenue 118.22B 152.35B 144.49B 278.76B 465.79B

Cost of Goods Sold(COGS) incl. D&A

78.1B 101.77B 98.79B 195.39B 335.4B

COGS excludingD&A

77.37B 100.96B97.81B

194.39B 333B

Depreciation &AmortizationExpense

733.12M 808.25M 974.46M 1B 2.4B

Depreciation 681.26M 746.47M 901.85M 905.14M 1.56B

Amortization of Intangibles

51.86M 61.78M 72.61M 97.2M 836.61M

Gross Income 40.12B 50.58B 45.7B 83.37B 130.39B

2007 2008 2009 2010 2011

SG&A Expense 9.46B 20.24B 21.08B 39.24B 61.61B


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2007 2008 2009 2010 2011

Research &

Development3.71B 9.35B 8.37B 12.94B 15.96B

Other SG&A 5.75B 10.89B 12.71B 26.3B 45.65B

Other OperatingExpense

0 0 0 0 0

Unusual Expense 96.26M 514.08M 60.81M (417.51M) (238.26M)

EBIT after UnusualExpense

(96.26M) (514.08M) (60.81M) 417.51M 238.26M

Non OperatingIncome/Expense

841.14M 519.99M 478.25M 104.4M 1.73B

Non-OperatingInterest Income

828.01M 1.4B 362.14M 313.89M 701.72M

Equity in Affiliates(Pretax)

0 0 - 0 0

Interest Expense 1.21M 10.44M 2.17M 3.56M 30.98M

Gross InterestExpense

1.21M 10.44M 2.17M 3.56M 30.98M


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2007 2008 2009 2010 2011

Interest

Capitalized- 0 0 0 0

Pretax Income 32.23B 31.74B 25.4B 44.96B 71.43B

Income Tax 3.31B 3.18B 2.78B 5.45B 9.12B

Income Tax -

Current Domestic

3.19B 3.59B 3.29B 6.99B 11.63B

Income Tax -Current Foreign

- 0 - - 0

Income Tax -DeferredDomestic

125.91M (410.26M) (506.52M) (1.54B) (2.5B)

Income Tax -Deferred Foreign

- 0 0 - 0

Income TaxCredits

0 0 0 0 0

Equity in Affiliates 0 (6.15M) (3.89M) 0 (3.96M)

Other After TaxIncome (Expense)

0 0 0 0 0


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2007 2008 2009 2010 2011

Consolidated Net

Income28.92B 28.55B 22.61B 39.51B 62.3B

Minority InterestExpense

(21.15M) (82.82M) 5.51M (18.76M) 323.25M

Net Income 28.94B 28.64B 22.61B 39.53B 61.98B

Extraordinaries &DiscontinuedOperations

0 0 0 0 0

ExtraItems &Gain/LossSale Of

Assets

0 0 0 0

CumulativeEffect -Accounting Chg

0 0 0 0

DiscontinuedOperations - - 0 0

Net Income AfterExtraordinaries

28.94B 28.64B 22.61B 39.53B 61.98B


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ANALYSIS(NOKIA)


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ANALYSIS(SAMSUNG)


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INTERPRETATION

From the above analysis of NOKIA and SAMSUNG we cansay that there exist a correlation between Independentand dependent variable as follows :

FOR NOKIA :

1.market share and COGS had a positive correlation asthere level of significance is 0.071.

2.market share and eqity in affiliates had a positivecorrelation as level of significance is 0.068.

3.market share and Gross income had a positivecorrelation as there level of significance is 0.111.

4.Market share and Income tax had a positive correlationas there level of significance is 0.200.

5.Market share and EPS had a positive correlation asthere level of significance is 0.007.

6.Market share and Net income had a positivecorrelation as there level of significance is 0.0001.


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7.Market share and EPI had a positive correlation asthere level of significance is 0.089.

FOR SAMSUNG:

1.market share and COGS had a positive correlation asthere level of significance is 0.629.

2.market share and eqity in affiliates had a positive

correlation as level of significance is 0.04.

3.market share and Gross income had a positivecorrelation as there level of significance is 0.579.

4.Market share and Income tax had a positive correlationas there level of significance is 0.688.

5.Market share and EPS had a positive correlation asthere level of significance is 0.727.

6.Market share and Net income had a positivecorrelation as there level of significance is 0.707.

7.Market share and EPI had a positive correlation asthere level of significance is 0.718.


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FINDINGS1.From the above correlation we can say that NOKIA marketshare is declining on the basis of COGS as the correlation is0.071 and on the other hand SAMSUNG is catching up fastagainst NOKIA as the level of significance on the basis of correlation is 0.629.

2. From the above correlation we can say that NOKIA marketshare is still on the better half on the basis of equity as thecorrelation is 0.068 and on the other hand SAMSUNG level of significance on the basis of correlation is 0.04.

3.From the above correlation we can say that NOKIA marketshare is declining on the basis of GROSS INCOME as thecorrelation is 0.111 and on the other hand SAMSUNG iscatching up fast against NOKIA as the level of significance onthe basis of correlation is 0.579.

4. From the above correlation we can say that NOKIA market

share is declining on the basis of INCOME TAX as the correlationis 0.200 and on the other hand SAMSUNG is catching up fastagainst NOKIA as the level of significance on the basis of correlation is 0.579.


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5. From the above correlation we can say that NOKIA marketshare is declining on the basis of EPS as the correlation is 0.007and on the other hand SAMSUNG is better against NOKIA as the

level of significance on the basis of correlation is 0.727.

6. From the above correlation we can say that NOKIA marketshare is declining on the basis of NET INCOME as thecorrelation is 0.001 and on the other hand SAMSUNG isaccelerating against NOKIA as the level of significance on thebasis of correlation is 0.707.

7. From the above correlation we can say that NOKIA marketshare is declining on the basis of EPI as the correlation is 0.089.and on the other hand SAMSUNG position is improving againstNOKIA as the level of significance on the basis of correlation is0.718.


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SUGGESTIONS

1.Nokia should go for advancement in technology with a low priceproduct as in this competitive market as its market share is fallingcontinuously.

2.Nokia should come out with improve quality product.

3.Nokia should plan for optimum utilization of resources to reduce itsexpenses in various fields.

4.Nokia should plan for much better operating cycle/cash conversioncycle/inventory management.

5.Nokia should observe the competitive market strategies adopted bySAMSUNG so as to increase its market share and profitability level.

6.Nokia should aim for negative working capital.


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CONCLUSIONNECESSITY IS MOTHER OF INVENTION this is true everywhere.In thestudy first of all we tried to find out the causes of the decrease in themarket share of NOKIA.We got the answer after analyzing last fewyears market structure and companys income statement that demand

of NOKIAs product is decreasing and its competitor Samsung is gaining

fast in the race and so we gave suggestions to improve its market stakeand also to improve its profitability to regain its position in the market.


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BIBLIOGRAPHY1.Moneymantra.com

2.Financialguru.com

3.Google.com

4.Moneycontrol.com

5.Relevant newspaper and articles.

6.Investopedia.com

7.Nokia.in

8.Samsungmobile.in9.indiatimes.com

Documents

Introduction Nokia