Nokia seeking fresh revenue routes in difficult times

AFTER THE BOOM:THE BOTTOM line is the most important thing for Alan O'Hara, general manager of Nokia in Ireland. O'Hara says the firm's focus used to be on the number of phones it could ship to retailers, but the recession, combined with market saturation, has changed things somewhat.

The result is that the company is left seeking new routes to revenue at a very difficult time for sales of any consumer goods.

O’Hara says the Vat increase in last year’s budget was particularly unhelpful, while the income levy has compounded the situation.

“Naturally this has affected consumer trends, leading – quite understandably – to prudence in monthly expenditure.”

Specifically for his firm, O’Hara expects consumers to replace their handsets less often.

“Although mobile phones are now regarded as a necessity, an upgrade to a new model, for example, is perceived as a luxury.”

Nokia’s response, says O’Hara, lies in services. In short, you convince the customer they need a new service on their phone (such as e-mail or music) and then they decide they need a new phone to facilitate it.

“We have to change the model,” he says, acknowledging that the firm probably will not see volume growth this year. Instead it expects a 15 per cent drop, while a “dip in revenue” is also on the cards.

Taking account of general economic conditions, Nokia has reduced its staff numbers in the past year, cutting one employee in marketing and another in finance.

This leaves the firm with a lean workforce of 14 in Ireland, but O’Hara points out that many more are employed on an outsourced basis in areas such as customer care.

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