Market leadership defined and how I came to rank Nokia number one in 2019 for best competitive position
As we reach the end of 2019 and start of 2020 media sites are producing their annual ranking lists. Top movies of the year. Best song of the decade. Most important English language book of 2019. Why? Because rankings provide an easy way for a reader to digest top performers in a given market. In the industry analyst field, we do something similar.
For radio access network vendors there are several ways to rank them or measure market leadership. Market share being the most common way. Other metrics for measuring vendor leadership include number of contracts or technology-relevant patents. All of these have value, but they alone do not tell the entire picture. Not every vendor values the same thing so direct comparisons can be incomplete. For example, in market share one vendor may lead in shipments as it has a low-price strategy, while another may value revenues over shipments and focus on that metric. Other vendors because of a geographic or other financial KPIs may discount both market share measures. The vendor that de-emphasizes market share to meet other KPIs is no less a leader than the one that does the opposite.
When I do my annual vendor rankings, I prefer to use multiple metrics to show how vendors lead in different ways. I use market share revenue, contract wins, and what I call vendor market position. By this measure Nokia leads.
Read the full report RAN Vendor Update 2019.
Vendor market position
For this ranking I use two metrics breadth of portfolio and vendor services, and global reach. As illustrated in the figure above Nokia leads all other RAN vendors in this measure. Only Huawei matches Nokia when it comes to breadth of base station options along with other network elements needed to build a full end-to-end mobile network solution. Ericsson holds its own against Nokia and Huawei in the RAN and packet core areas, but lacks some of the transport and routing solutions supplied by those two vendors. Geographically Nokia can sell into any market, something not every vendor can claim.
Of course, most operators do not single source their networks and Nokia will readily admit this. However, being able to offer an end-to-end solution does give Nokia a competitive advantage as it can legitimately claim deep knowledge of all aspects of the mobile network and how the different network domains are connected. It also gives Nokia more than one way to meet a mobile operator’s network requirements. Where the vendor does not win the radio access network contract, it can still support the operator with transport and routing thus maintaining the vendor operator relationship. With Nokia’s geographic reach the company can legitimately claim it is able to sell more mobile network gear to more operators in more markets than any of its major RAN competitors.
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