Restrengthening Brand Nokia

Nokia, the
handset market leader, has once again stood by its reputation. The Finnish giant
has recalled certain Nokia branded chargers, manufactured by a third-party
supplier. In India, this charger exchange program is limited to charger model
AC-3E only, manufactured between June 15 to August 9, 2009, for a Nokia mobile
phone-Nokia 7210. However, globally the exchange program includes AC-3U, AC-3E,
AC-4U series.

In an issued statement the company said,
"During a routine quality control process, Nokia identified a potential product
quality issue with certain chargers manufactured by one of its third-party
suppliers. The plastic covers of these chargers could come loose or
separate-exposing the charger's internal components and potentially posing an
electric shock hazard, if certain internal components are touched while the
charger is plugged into a live socket."

While Nokia did not divulge the number of
customers affected, reports have estimated the recall applies to 14 mn chargers
worldwide. The numbers of people affected in India would be small.

Nokia, as per VOICE&DATA estimates, had a
market share of 64% by the end of FY 2008-09. Nokia, is still the market leader
in the country, but its growth rate is falling down. The company had registered
a growth of 10% in the last financial year. Its closest competitor, Samsung grew
by 72%, with an innovative and attractive product line.

This product recall will strengthen
Nokia's brand image in the country. Whether this exercise will be able to
catalyse sales figure-which is heading south, for the handset manufacture-can
only be told in the coming times.

"It will obviously strengthen the
company's brand image among users. It will boost its reputation and customers'
confidence too. But, I doubt how much of it would convert into sales, as buyers
consider various factors while buying, brand value is only one of them," says
analysts associated with a leading research firm, pleading anonymity.

These chargers were manufactured this year
by the battery making arm of Shenzhen based BYD. The company is owned by Wang
Chuanfu, the second richest man in China. Moreover, the US millionaire, Waren
Buffett's MidAmerican Energy owns a 9.9% stake in BYD, which stands for 'Build
Your Dreams'.

It is worth mentioning that BYD also makes
chargers for Motorola. The company will cover the costs of the recall.

Interestingly, BYD's success is largely
driven by automobiles-not rechargeable battery or mobile phone component sales.
Revenues from cars account for 55% of BYD's sales.

Nokia's last recall was in 2007, when it
found 40 mn lithium-ion batteries produced by Japanese manufacturer, Matsushita
Battery Industrial that posed a risk of overheating. During charging, a short
circuit can occur which may pose an overheating risk. So far, about 100 separate
incidents have been reported. Although there were no serious injuries or
property damage being reported. At that time (FY 2007-08) Nokia had a market
share of 62.5% with a growth of 30%.

Akhilesh Shukla

akhileshs@cybermedia.co.in