Nokia Pulls Out of Japanese Handset Market

November 27th, 2008 at 12:00 am

nokia japan

Japan, Land of the Rising Sun, is the fourth largest market for mobile in the world.  Some 85% of the Japanese population have a mobile phone and most of them change phones every year.  This makes Japan a market that phone manufacturers want to penetrate and dominate.  However, the Japanese are keen mobile phone users, usually always staying technologically ahead of the entire world.  That means that non-Japanese phone makers are having a hard time keeping up with Japan made gadgets.

Foreign companies, excluding Sony Ericsson, only occupy around 5 percent of Japan’s mobile phone market, according to IDC Japan, a research firm. Japanese manufacturers, in turn, have only a small presence outside their home market.

Finland-based Nokia, the world’s largest mobile phone manufacturer, has been in the Japanese market for quite sometime.  Unfortunately, not even them can dominate in the small technologically advanced country.  Today they announced that they will stop selling mobile phones in Japan except for its luxury Vertu brand after struggling to expand its presence.

"In the current global economic climate, we have concluded that the continuation of our investment in Japan-specific localized products is no longer sustainable," Nokia executive vice president Timo Ihamuotila said in a statement.

A huge blow to the Finns but as a consolation, other brands aren’t making a dent in the Japanese market either.

Nokia, which has a world market share of about 40% aimed to increase their market share in Japan to at least 10% .  However, in the last business year, they only managed to take around 0.3% of the Japanese market.  This absurdly bad performance caused them to back away from the Japanese market and set their sights somewhere else where the users do not demand too much high technology and don’t necessarily have money.