Nokia Appoints Carat as Global Media Agency

No. 1 Handset Marketer Facing Pressure as Market Share Slips

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BEIJING ( -- Nokia Corp. is moving its $415 million global media business to Aegis Group's Carat network.

Carat will be Nokia's single global partner for media planning and buying, a senior marketing executive at Nokia in Beijing confirmed.

The shift to Carat will be completed in most regions in the third quarter of 2009, with the exception of India, the Middle East and North Africa, which will have longer transitions.

Nokia's previous media agency, Group M's MediaCom, resigned the business earlier this year following, according to company sources, a contentious negotiation about costs and remuneration. WPP-owned MediaCom had held the business since early 2006.

The mobile-phone manufacturer declined to confirm the other media networks in the pitch, but they are believed to include Interpublic Group of Cos.' Universal McCann, Publicis Groupe's ZenithOptimedia and Omnicom Group's PHD.

Nokia said in a statement, "The objective of the review was to identify the optimal media solution for meeting Nokia's evolving requirements for consumer-led, innovative and creative outcome-based media planning and buying across the globe."

The review focused on digital-media capabilities "to accelerate Nokia's move into solutions marketing. We believe that innovation will be an important component to improve the effectiveness of media communications in the future," said Pekka Rantala, senior VP-global head of marketing at Nokia's headquarters in Espoo, Finland, in the company's statement.

"We were impressed by the quality of the agencies' responses and the depth of capabilities that the agencies showed in being able to contribute to Nokia's business needs. Carat will add value especially in strategic planning and offer strong digital capabilities," Mr. Rantala said.

As part of Aegis Group, Carat is supported by Aegis's global digital-media network Isobar. In China, Nokia's single biggest market and the largest mobile-phone market in the world, Isobar owns leading digital-media agency Wwwins Consulting.

Nokia is one of the leading handset makers in the world but faces declining sales, even in China, putting pressure on the company's senior executives to cut costs and focus on Nokia's top-selling smartphones and music phones.

According to a recent report by research firm Gartner, Nokia had 36.2% market share worldwide in the first quarter of 2009 and accounted for about 97.4 million of the 269.1 million mobile phones sold globally. But that's down from 39.1% of the market and sales of 115 million units in the first quarter 2008. Worldwide, mobile-phone sales fell 8.6% during the same period.

Samsung, the No. 2 brand, boosted its market share to 19.1% in early 2009 from 14.4% in the first quarter of 2008, while third-ranked LG went from a 8.0% market share to 9.9%, pushing Motorola into fourth place. Motorola's market share fell to 6.2% from 10.2%, according to Gartner.

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