People pass a Nokia shop managed by retailer Nosimo at Tverskaya Street, Moscow. Samsung announced Sunday that Nosimo canceled a contract with Nokia and signed an agreement to exclusively sell its products. / Yonhap

Samsung acquires Nokia shops in Russia

By Cho Mu-hyun

Samsung Electronics has gained a strong foothold in Russia by winning over rival Nokia.

According to Samsung, Sunday, Russian retailer Nosimo, which has 43 shops in Moscow and other metropolitan areas, dropped its contract with Nokia to start selling Samsung’s mobile handsets and other non-telecommunications devices instead.

“Samsung Electronics has signed a deal with Nosimo to sell our products exclusively,” said a company official. “Samsung Electronics has been gaining market share in smartphones steadily, to become the No.1 in Russia now. We are a national brand in Russia, and when consumers (there) think about smartphones, they automatically think of Samsung.”

Nosimo has been selling the Finish firm’s premium brand mobiles for 10 years, and was responsible for 10 percent of the company’s revenue annually during that time.

The chain’s shop in Moscow, Tverskaya Street, earned $1 million per month, and symbolized Nokia’s strong presence in the country. The shop that once sold Nokia’s top brands such as Veru is now undergoing renovations, and will put up a Samsung Electronics sign from next month.

“Our results in Russia have been achieved much faster than our foreign competitors. We will continue to focus hard on the Russian market to maintain are good brand image,” the official said. He also predicted that the deal with Nosimo is likely to further the gap between Samsung and Nokia, which has been widening quickly since last year.

From early 2011, Samsung started overtaking Nokia in many different countries, and toppled them in sales in Russia in August, and eventually globally in November. Besides sales, Samsung eventually won in revenue as well starting January.

Samsung credited the rising recognition to its marketing plan that included opening booths in front of stores to allow passersby a firsthand trial of newly released phones, and different sports events.

The Korean company secured a 42 percent smartphone and 40 percent in total mobile phone market share in Russia as of this March, beating Nokia which held 28 and 22 percent in the same categories.

“We are discussing with other premium mobile phone retailers besides Nosimo on changing their brand to Samsung Electronics. We expect retailers in Moscow to change their front signs to Samsung,” said the official.

The company leads the worldwide smartphone market with 29.1 percent for the first quarter of 2012, a rise of 17.8 percentage points from the previous year’s 11.3 percent. It sold 42.2 million handsets, a spectacular rise of 267 percent from the previous year. Samsung and runner-up Apple hold over 50 percent of the market now, with other companies including Nokia, steadily losing ground.

The Finnish firm held 8.2 percent in the first quarter, a steep decline from 23.8 percent last year. Sales were nearly cut in half, from 24.2 million to 11.9 million.

Nokia, which reigned supreme in mobile handsets for 14 years, lost ground to Samsung and Apple when it was late joining the advanced smartphone race that began with the California-based company’s release of the first iPhone in 2007. Nokia had boasted that it decides the “global standard,” but failed to invest in the developing smartphones.

But as time went by, it became apparent to Nokia that Samsung’s Galaxy line and Apple’s iPhone were quickly becoming consumer’s first choice. Stephen Elop, first non-Finnish CEO to head the company, replaced Olli-Pekka Kallasvuo in 2010 to save the reeling corporation from collapse.

Besides its 1100 series, Nokia is yet to release a product that can compete with its rivals’ diverse smartphone brands.