Stephen Elop explains why Nokia continues to pursue the US market

Why Nokia continues to pursue the US market despite limited success

Recent and historical results from Nokia in USA makes it clear that it is not one of the company’s most successful markets, despite a number of expensive launches with significant promotion by Nokia, Microsoft and even their carrier partners.

In fact in the last quarter (Q2 2013) Nokia sold less than 7% (500,000) of their smartphones in the region, despite running a very US-friendly operating system.

In the recent Financial Call Stephen Elop was asked if there was any further point in investing in this market for such limited returns, but Stephen explained the effects of their activity there had repercussions far beyond the US market.

See the transcript after the break.

Richard Kramer – Arete Research

Stephen, you have now had about eight straight quarters of about 0.5 million units or so in North America. Can you just sort of lay out for shareholders and investors, balancing the signaling value of the U.S. market, whether you can justify the cost of continuing to pursue market share there? And what might happen if that doesn’t improve?

Stephen Elop – President and Chief Executive Officer, Chairman of Nokia Leadership Team, Director

Thanks, Richard. With respect to North America, particularly the U.S. market, we believe quite strongly that the signaling value of that market is high. We measure this quite carefully by studying the influencers on purchases around the world and the extent to which for example a powerful launch of the Lumia 1020 in the United States is reflected around the world and how that gets picked up and everything from press coverage to blogger coverage to the encouragement of developers to build apps for Windows Phone and so on and so forth and it is just an amazing amount of influence coming out the U.S. market.

Now it is a hard market. At the same time, if you look sequentially, we saw improvements in North America which we are pleased to see. In large part, on the back of the 928 going into Verizon and the 520 in T-Mobile and also a number of retail markets. And, of course, we have some very exciting products. Just coming in our product in particular the Lumia 1020 which, for the first time since November, puts some freshness into AT&T as well.

So we think that that’s really important. Also the standard of care that with the U.S. operators put towards quality of products is something that helps us. Going through an AT&T lab approval cycle early on is something that helps us a great deal on a worldwide basis. So we still believe strongly that signalling value, it is a big investment. We have to do better. We have to break through. So we know there is a lot of hard work ahead but we remain committed to the Americas.

So in short competing in the US market helps convince developers and customers, both inside and especially outside of USA, to support the platform, and even helps with quality control.

Given Stephen Elop’s statements, do our readers agree that Nokia should continue to pour resources into USA, or, given that 93% of Lumias are sold elsewhere, should Nokia refocus? Let  us know below.