The mobile phones market has ultimately reached the saturation point as more and more players, big and small, are foraying into this sector cramping it further. To remain alive in this competitive world, price-cutting is a popular technique followed by major players to outsmart rivals and in the process removing the small fries from the sector. Nokia, the world’s leading cell phone manufacturer is slashing prices of its cell phones, up to 10% for selected music and media phones, giving its rivals a run for their money as they struggle to survive in the shrinking market. The cost-cutting policy of Nokia, although will expand the demand for its product, is costing it dear on the equity market with falling share prices amidst fear of impending decline in profits.
With an empire that covers 40% of the cell phone market, Nokia has a long-term revenue policy in mind that includes hurting its rivals as much as possible. Sony Ericsson, for instance, has made no profit in the April-June quarter and is on its way to cut around 2000 jobs. During the same quarter Motorola, who had already lost a chunk of its customers to iPhone saw its market share fall to 9.4%. However, LG and Samsung are faring pretty well. May be Nokia should explore new markets for its products.