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Nokia shutters Shanghai store as Chinese stay away in their billions

Smell of death putting them off, perhaps

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Nokia has closed its flagship Shanghai retail store in an attempt to trim costs and concentrate on other sales channels as it looks to arrest an alarming decline in smartphone sales in the world’s biggest market.

State-run news agency Xinhua posted some snaps of the shuttered store – which was opened in 2007 to much fanfare as the firm’s largest in the world – on Nanjing East Road this week.

The Finnish giant sent the following tinned statement to El Reg:

Nokia is focusing on growing its presence in operator and third-party retail outlets, rather than through our own physical stores. We are, of course, also continuously beefing up our online presence. With this in mind, our store in Shanghai was closed on 31 March.

The story of Nokia’s decline in China in many ways mirrors its malaise on the global stage. Once pre-eminent in the feature phone space, it has been unable to win hearts, minds or wallets in the People’s Republic with its Windows Phone-based Lumias as more users upgrade to a smartphone.

According to some estimates, the Finnish phone maker now sits in seventh place in China, with just 3.7 per cent of the smartphone market in 2012.

Research from TRENDforce last November seems to show, worryingly for Mr Elop, that foreign rivals Samsung and Apple - and local upstarts including Huawei, Lenovo and Xiaomi - are producing more desirable handsets.

That analysis also suggested that brand recognition for Nokia as a smartphone producer collapsed from 91.6 per cent a year ago to 38.2 per cent in 2012.

Europe’s largest technology company is still plugging away though, announcing two budget Lumia devices at the Mobile World Congress in February – the 720 and 520 – that it hopes will win over Chinese punters.

It has also signed a potentially lucrative deal with China Mobile, which will see the world’s largest mobile operator (by subscriber count) flog the two handsets as well as a variant of the flagship Lumia 920 modified for the local market. ®

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