nokia and samsung

RESEARCH METHODOLOGY
PROJECT REPORT

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

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 get more 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 is headquartered in Keilaniemi, Espoo, a city neighbouring Finland's capital Helsinki. Nokia is engaged in the manufacturing of mobile devices and in converging Internet and communications industries, with over 123,000 employees in 120 countries, sales in more than 150 countries and global annual revenue of EUR 41 billion and operating profit of 1.2 billion as of 2009. It is the world's largest manufacturer of mobile telephones: its global device market 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 such as applications, games, music, maps, media and messaging through its Ovi platform. Nokia's subsidiary Nokia Siemens Networks produces telecommunications network equipment, solutions and services. Nokia is also engaged in providing free digital map information and navigation services through its wholly-owned subsidiary Navteq.

SAMSUNG MOBILES
Although its line of sparkling smartphones seems fresh and new, Samsung Mobile has been around since 1983. Samsung Mobile's parent company, Samsung Electronics, was founded in 1969. Once known for its televisions and other home appliances, Samsung recently eclipsed heavyweights Sony Ericsson and Motorola as one of the biggest cell phone manufacturers in the world. A Rough Beginning 1. Samsung Mobile's first ever offering was a car phone it introduced in 1986. Because of poor reception and sales, manufacturing was halted. From this point until the early 1990s, Samsung Mobile would introduce mobile phone models, but sales were low because demand was low. The designs of these early attempts were bulky, and reception was poor. With Motorola holding a sizable advantage over the rest of a fledgling mobile phone field, Samsung nearly dropped its Mobile division. Turning Point 2. In 1993, Samsung Mobile released the SH-700 series, which boasted a smaller and sleeker design and better sound quality. With a better product and a more aggressive marketing campaign, Samsung would reclaim more than half the mobile phone market share in Korea from Motorola. The Global Market 3. Samsung cell phones found its way into American hands for the first time in 1996, when they partnered with Sprint on a line of sleek and compact phones. A few short years later, South America and Japan were enjoying the high-end design of Samsung Mobile phones. Samsung Mobile Today

4. In early 2009, Samsung Mobile's global market share stood at more than 17 percent, second only to Nokia. In the 3rd quarter of 2008, for the first time in its history, Samsung Mobile shipped more than 50 million handsets in a quarter--despite a global recession. Samsung Facts 5. Lee Byung-chull founded Samsung Group in 1938, naming the startup company a Korean word which translates to "three stars" in English. Samsung Mobile enjoys agreements with major cell phone service providers 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.

WHY
The study wishes to find out the Reason for falling market share of Nokia as compared to Samsung .
COMPANY NOKIA SAMSUNG 3Q08 UNITS 117461 71671.8 3Q08 MARKET SHARE 28.20% 17.20% 3Q09 UNITS 113466.2 60627.7 3Q09 MARKET SHARE 36.7 19.60%

COMPANY NOKIA SAMSUNG

1Q10 UNITS 107556.1 68782

1Q10 MARKET SHARE % 25.10% 16.10%

1Q11 UNITS 110105.4 64897.1

1Q11 MARKET SHARE % 30.60% 18.00%

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

WHAT
An analytical study to find out the downfall in the sales volume of Nokia as compared 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 same quarter last year. Through this research Nokia wants to find out the reason for its falling market share by considering following Variables.

OBJECTIVES

The research will find out the possible reasons for the downfall of its market share as 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 the falling market share and take necessary actions. By conducting this research Nokia may also be able to increase and sustain it leadership in Mobile Segment.

VARIABLES
Independent= COGS DEPRICIATION GROSS INCOM NON OPERATING INCOME EQUITY IN AFFILIATES INCOME TAX EPS EPC NET INCOME EBI & TDA Dependent=Market Share

Annual Financials for Nokia Corp. ADS

Fiscal year is JanuaryDecember. All values 2007 EUR millions.

2008

2009

2010

2011

Sales/Revenue

51.06B

50.71B

40.98B

42.45B

38.66B

Cost of Goods Sold (COGS) incl. D&A COGS excluding D&A Depreciation & Amortization Expense Depreciation

34.34B

34.26B

29.09B

30.98B

27.34B

33.13B

32.64B

27.3B

29.21B

25.78B

1.21B

1.62B

1.78B

1.77B

1.56B

579M

723M

603M

599M

Amortization of 627M Intangibles Gross Income 16.72B

894M

1.18B

1.17B

16.46B

11.9B

11.47B

11.32B

2007

2008

2009

2010

2011

SG&A Expense Research & Development Other SG&A Other Operating Expense Unusual Expense EBIT after Unusual Expense Non Operating Income/Expense

9.57B

10.12B

9.32B

9.24B

4.69B

5.14B

4.97B

4.96B

4.89B

4.97B

4.35B

4.28B

218M

417M

236M

240M

(626M)

1.47B

1.83B

520M

626M

(1.47B)

(1.83B)

(520M)

371M

342M

562M

429M

221M

Non-Operating Interest 339M Income Equity in Affiliates (Pretax)

353M

101M

138M

44M

6M

30M

2007

2008

2009

2010

2011

Interest Expense Gross Interest Expense

43M

185M

243M

254M

102M

43M

185M

243M

254M

102M

Interest Capitalized 0 Pretax Income Income Tax Income Tax Current Domestic Income Tax Current Foreign 8.27B 1.52B

0 4.97B 1.08B

0 962M 702M

0 1.79B 443M

(1.18B) 290M

2.21B

1.51B

736M

798M

Income Tax (687M) Deferred Domestic Income Tax Deferred Foreign

(433M)

(34M)

(355M)

2007

2008

2009

2010

2011

Income Tax Credits 0 Equity in Affiliates -

0 0

0 1M

(23M)

Other After Tax Income 0 (Expense) Consolidated Net Income Minority Interest Expense Net Income Extraordinaries & Discontinued Operations Extra Items & Gain/Loss Sale Of Assets

6.75B

3.89B

260M

1.34B

(1.49B)

(459M)

(99M)

(631M)

(507M)

(324M)

7.21B

3.99B

891M

1.85B

(1.16B)

2007

2008

2009

2010

2011

Cumulative Effect Accounting Chg Discontinued Operations Net Income After Extraordinaries Preferred Dividends Net Income Available to Common EPS (Basic) Basic Shares Outstanding EPS (Diluted)

7.21B

3.99B

891M

1.85B

(1.16B)

7.21B

3.99B

891M

1.85B

(1.16B)

1.85

1.07

0.24

0.50

(0.31)

3.89B

3.74B

3.71B

3.71B

3.71B

1.83

1.05

0.24

0.50

(0.31)

2007

2008

2009

2010

2011

Diluted Shares Outstanding EBITDA

3.93B

3.78B

3.72B

3.71B

3.71B

8.14B

7.54B

4.12B

3.76B

268M

SAMSUNG INCOME STATEMENT

Fiscal year is JanuaryDecember. All values 2007 TWD millions. Sales/Revenue Cost of Goods Sold (COGS) incl. D&A COGS excluding D&A Depreciation & Amortization Expense Depreciation 118.22B 2008 2009 2010 2011

152.35B

144.49B

278.76B

465.79B

78.1B

101.77B

98.79B

195.39B

335.4B

77.37B

100.96B

97.81 B

194.39B

333B

733.12M

808.25M

974.46M

1B

2.4B

681.26M

746.47M

901.85M

905.14M

1.56B

Amortization of 51.86M Intangibles Gross Income 40.12B 2007 SG&A Expense 9.46B

61.78M

72.61M

97.2M

836.61M

50.58B 2008 20.24B

45.7B 2009 21.08B

83.37B 2010 39.24B

130.39B 2011 61.61B

2007 Research & Development Other SG&A Other Operating Expense

2008

2009

2010

2011

3.71B

9.35B

8.37B

12.94B 15.96B

5.75B

10.89B

12.71B

26.3B 45.65B

Unusual Expense

96.26M

514.08M

60.81M

(417.51M)

(238.26M )

EBIT after Unusual Expense Non Operating Income/Expense Non-Operating Interest Income Equity in Affiliates (Pretax) Interest Expense Gross Interest Expense

(96.26M)

(514.08M)

(60.81M)

417.51M

238.26M

841.14M

519.99M

478.25M

104.4M

1.73B

828.01M

1.4B

362.14M

313.89M

701.72M

1.21M

10.44M

2.17M

3.56M

30.98M

1.21M

10.44M

2.17M

3.56M

30.98M

2007 Interest Capitalized Pretax Income Income Tax

2008

2009

2010

2011

32.23B 3.31B

31.74B 3.18B

25.4B 2.78B

44.96B 5.45B

71.43B 9.12B

Income Tax 3.19B Current Domestic Income Tax Current Foreign Income Tax Deferred Domestic Income Tax Deferred Foreign Income Tax Credits Equity in Affiliates Other After Tax Income (Expense)

3.59B

3.29B

6.99B

11.63B

125.91M

(410.26M)

(506.52M)

(1.54B) (2.5B)

(6.15M)

(3.89M)

(3.96M)

2007 Consolidated Net Income Minority Interest Expense Net Income

2008

2009

2010

2011

28.92B

28.55B

22.61B

39.51B

62.3B

(21.15M)

(82.82M)

5.51M

(18.76M)

323.25M

28.94B

28.64B

22.61B

39.53B

61.98B

Extraordinaries & Discontinued 0 Operations Extra Items & Gain/Loss Sale Of Assets Cumulative Effect Accountin g Chg Discontinued Operations Net Income After Extraordinaries

28.94B

28.64B

22.61B

39.53B

61.98B

2007 Preferred Dividends Net Income Available to Common EPS (Basic) Basic Shares Outstanding EPS (Diluted) Diluted Shares Outstanding EBITDA 0

2008 0

2009 0

2010 0

2011 0

28.94B

28.64B

22.61B

39.53B

61.98B

33.54

32.80

26.04

46.18

73.32

862.76M

873.02M

868.07M

856M

845.32M

33.54

31.65

25.56

45.61

71.91

86.6B

90.74B

88.66B

86.71B

86.85B

31.39B

31.15B

25.6B

45.13B

71.19B

ANALYSIS(NOKIA)

ANALYSIS(SAMSUNG)

INTERPRETATION
From the above analysis of NOKIA and SAMSUNG we can say that there exist a correlation between Independent and dependent variable as follows :

FOR NOKIA :
1.market share and COGS had a positive correlation as there level of significance is 0.071. 2.market share and eqity in affiliates had a positive correlation as level of significance is 0.068. 3.market share and Gross income had a positive correlation as there level of significance is 0.111. 4.Market share and Income tax had a positive correlation as there level of significance is 0.200. 5.Market share and EPS had a positive correlation as there level of significance is 0.007. 6.Market share and Net income had a positive correlation as there level of significance is 0.0001.

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

FOR SAMSUNG:
1.market share and COGS had a positive correlation as there 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 positive correlation as there level of significance is 0.579. 4.Market share and Income tax had a positive correlation as there level of significance is 0.688. 5.Market share and EPS had a positive correlation as there level of significance is 0.727. 6.Market share and Net income had a positive correlation as there level of significance is 0.707. 7.Market share and EPI had a positive correlation as there level of significance is 0.718.

FINDINGS
1.From the above correlation we can say that NOKIA market share is declining on the basis of COGS as the correlation is 0.071 and on the other hand SAMSUNG is catching up fast against NOKIA as the level of significance on the basis of correlation is 0.629. 2. From the above correlation we can say that NOKIA market share is still on the better half on the basis of equity as the correlation 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 market share is declining on the basis of GROSS INCOME as the correlation is 0.111 and on the other hand SAMSUNG is catching up fast against NOKIA as the level of significance on the 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 correlation is 0.200 and on the other hand SAMSUNG is catching up fast against NOKIA as the level of significance on the basis of correlation is 0.579.

5. From the above correlation we can say that NOKIA market share is declining on the basis of EPS as the correlation is 0.007 and 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 market share is declining on the basis of NET INCOME as the correlation is 0.001 and on the other hand SAMSUNG is accelerating against NOKIA as the level of significance on the basis of correlation is 0.707. 7. From the above correlation we can say that NOKIA market share is declining on the basis of EPI as the correlation is 0.089. and on the other hand SAMSUNG position is improving against NOKIA as the level of significance on the basis of correlation is 0.718.

SUGGESTIONS
1.Nokia should go for advancement in technology with a low price product as in this competitive market as its market share is falling continuously. 2.Nokia should come out with improve quality product. 3.Nokia should plan for optimum utilization of resources to reduce its expenses in various fields. 4.Nokia should plan for much better operating cycle/cash conversion cycle/inventory management. 5.Nokia should observe the competitive market strategies adopted by SAMSUNG so as to increase its market share and profitability level. 6.Nokia should aim for negative working capital.

CONCLUSION
NECESSITY IS MOTHER OF INVENTION this is true everywhere.In the study first of all we tried to find out the causes of the decrease in the market share of NOKIA.We got the answer after analyzing last few years 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 stake and also to improve its profitability to regain its position in the market.

BIBLIOGRAPHY
1.Moneymantra.com 2.Financialguru.com 3.Google.com 4.Moneycontrol.com 5.Relevant newspaper and articles. 6.Investopedia.com 7.Nokia.in 8.Samsungmobile.in 9.indiatimes.com