Bottom Of The Pyramid – Nokia’s Second Act

The two-third of world’s 4.6 billon mobile users live in the emerging markets. Millions of these users live below the poverty line and are part of the bottom of the pyramid (BOP). Nokia is the market leader in these emerging markets, at least for now, with 34% market share. It’s clear from rapidly declining Nokia’s marketshare and an appointment of new CEO, Stephen Elop, that Nokia needs a second act. I believe the BOP is what could be the next big thing for Nokia.

The recent NYTimes story highlights a Nokia’s service, to supply commodity data to the farmers in India, using a text message. So far, 6.3 million people have signed up for this service. Nokia is planning to roll out this service, Life tools, in Nigeria as well. This is part of their Ovi mobile business.

I have written before on impact of cloud computing and mobile on the bottom of the pyramid and the importance of public policy innovation in emerging markets. The BOP is one of the biggest opportunities that Nokia currently has. Nokia has been losing marketshare in the smartphone category, and it is going to get increasingly difficult for Nokia to compete with Apple, Google, RIM, and now Microsoft. However, the very same vendors will find it equally difficult to move down the chain to compete with Nokia in the emerging markets.

One of the biggest business challenges to cater to the BOP is not a desire to market or a product to offer, but it is the lack of direct access to these consumers. The people at the BOP are incredibly difficult to reach. I have seen many go-to-market plans fail because it is either impossible or prohibitively expensive to market to these consumers. One of the biggest assets Nokia has is the relationship, the channel, with the people at the BOP. Now is the time to focus and leverage that channel by providing them with the content and the services that could be served on these phones via a strong platform, built for the BOP, and a vibrant ecosystem built around it.

My two cents: exit from the Smartphone category and double down the investment to serve the people at the bottom of the pyramid.

Nokia, that could be your second act.