Business Technology

Sunday 31 August 2014

The end of the line for the once mighty Nokia brand

Adrian Weckler

Published 11/05/2014 | 02:30

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The Nokia Oyj Lumia 1520 smartphone. Microsoft is to phase out the Nokia name.
The Nokia Oyj Lumia 1520 smartphone. Microsoft is to phase out the Nokia name.

SO Nokia is to bite the dust. With very little public attention, Microsoft – Nokia's new owner – announced that it is to phase out the name 'Nokia' altogether from the handset phone business.

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The move won't happen overnight, says the software giant. But in a few years, if the Finnish (and now American) firm still has phones for sale in shops, they won't be called Nokia.

Microsoft has already started the branding transition by switching the handset division's name to 'Microsoft Mobile' at a corporate and supplier trade level.

Executives say that this may not be the ultimate name for the phone. But the globally recognised name of Nokia appears now to be on death row.

Any patriotic European will lament this turn of events. How has it come to this?

Five years ago, Nokia was the pride not just of European telecoms, but of European industry in general. It was a world-beating corporate goliath, feared and respected by all of the world's global players. It had hundreds of millions of customers who were reluctant to switch away from the brand.

Yet here it now stands, enfeebled and about to have its brand disembowelled.

Was it Nokia's arrogance in ignoring touchscreen phones? Was it complacency in underestimating the power of the mobile web and apps? Was it fear to switch away from what it thought to be a tried-and-trusted formula of button phones, texting and corporate contracts?

Most Irish adults will remember owning a Nokia. At one point, the brand had an astonishing 60 per cent market share among Irish mobile users. Taoiseach Enda Kenny is rumoured to still own one of the older models.

Irish people might also remember the relative strengths of these old-fashioned devices. Their batteries typically lasted two full days (or more). Because they did not need to be super-sleek, many had extruding antennae which fundamentally improved the handsets' reception prowess. Finally, they were tough as nails – no cracked screen epidemic plagued us seven years ago.

But, ultimately, these phones became old hat because they didn't do what ordinary people increasingly wanted them to do.

From the moment the iPhone was launched, Nokia got caught in a fairly lame game of catch-up. Its initial response was to create awkward touch-screen phones using Ovi, an overarching platform incorporating Nokia's answer to apps. The company had a window of about two years to get a viable alternative together, but failed because of a mixture of conservatism and arrogance in dismissing the new breed of smartphones.

By 2009, when Android smartphones were starting to establish themselves as credible rival devices to the iPhone, it was starting to look very worrying for Nokia. Yet the company, which still held a third of the world's entire mobile phone customer base, refused to change course.

Five years later, what was once the world's greatest mobile phone firm was sold to Microsoft for a fraction of the sum paid for Whatsapp – a messaging app.

Two years ago, the company made a bold decision to ditch its own smartphone operating system and turn to Microsoft's emerging Windows Phone platform. The subsequent phones, branded 'Lumia', made a good start but have stalled in sales recently. Most analysts see a very tough road ahead for these Windows Phone mobiles against the might of Apple's iPhone and, in particular, Android devices.

So could Nokia soon be looking down the barrel of a BlackBerry-style annihilation? Fondly remembered but firmly a thing of the past?

Microsoft has taken the first step down this regrettable path, with the mooted elimination of the Nokia brand. It remains to be seen whether the remaining remnants of the once-great mobile company can survive in any shape or form.

Sunday Indo Business

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