Nokia focuses on rebuilding in China, signs $320m deal with top Web retailer 360Buy

Nokia focuses on rebuilding in China, signs $320m deal with top Web retailer 360Buy

Nokia has signed an agreement with Chinese ecommerce site to sell up to $320 million (RMB 2 billion) worth of phones next year in a bid to reassert itself in the country.

The cooperation makes 360Buy an officially licensed Nokia vendor and the handset maker’s largest ecommerce partner in China. With the announcement, the site has begun pre-sales for the Lumia 920 and 920T. At $738 (RMB 4,599), the device lands at the high-end of the market, though it’s still cheaper than the iPhone 5, which retails for $849 (RMB 5,288). 360Buy will also soon launch the Nokia 2050.

For years, Nokia enjoyed a strong lead in China, but sales in the country have fallen apart as Android, and to a lesser extent the iPhone, have taken over.

Let’s use some cold hard numbers to put Nokia’s China business into perspective. In the third quarter of 2010, the company sold 20.2 million handsets in the Greater China region. During the same period in 2011, sales fell 21 percent to 15.9 million. In Q3 2012, Nokia managed just 5.8 million mobile device sales in Greater China, a precipitous drop of 64 percent year-over-year.

By comparison, Apple recently announced it had sold over 2 million iPhones in mainland China in just two days with last week’s launch of the iPhone 5. Nokia says it sold 2.9 million Lumia devices – globally last quarter.

Of course, Nokia isn’t just struggling in China. Mobile device sales volumes for the company declined across the board year-over-year from Q3 2011 to Q3 2012, but the Greater China region represented the largest drop, both in terms of percentage and units.

$320 million over one year isn’t going to singlehandedly save Nokia – the company had an operating loss of $754 million alone last quarter, but it’s still a substantial figure that should help cauterize bleeding in the region. 360Buy has established itself as one of the strongest ecommerce players, so the agreement should be a helpful one. The site runs an extensive delivery network that it recently opened up to third-party vendors.

When China Mobile hinted that it would release a version of the Lumia 920 custom-fitted for its proprietary 3G network back in October, I described the deal as a potential game changer. China Mobile is, after all, the world’s largest carrier with more than 700 million subscribers. Also, device competition on China Mobile isn’t as fierce as other markets because of the proprietary nature of the network. The iPhone, for instance, has yet to make its way onto China Mobile, despite it being available on the country’s two other networks – China Unicom and China Telecom.

With 360Buy offering a strong lifeline in China, now all Nokia has to do is figure out its production issues.

Image Credit: Spencer Platt/Getty Images

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