The Nokia brand still has value, but it's not enough to rebuild the company

Nokia has been synonymous with mobile phones for generations. Sadly, a number of foreseeable blunders and a failure to innovate in time doomed the company to non-existence.

Within a few short years, from 2010-2014, the company lost over 90 percent of its market-share and much of its brand value. For many today, the little brand value that remains is rooted in nostalgia (and memes) than actual value.

Let the good times roll

I have fond memories of my Nokia phones over the years. I remember the gaming prowess of the N-Gage QD (I still haven’t found a better version of Snake on any device) to the unprecedented value offered by the now legendary Nokia 1100. I remember the chunky monster that was the N72, the awesome camera of the N93 and last hurrah that was the N95.

Oh, and who can forget the indestructible Nokia 3310?

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I also remember the terrible XpressMusic 5800 (Resistive touch? Phooey!), the lack-lustre N83 and the gorgeous, but ultimately disappointing, Lumia 800.

If there’s one thing that sticks with me though, it’s the fact that Nokia’s phones were always rugged, reliable devices that stuck with me through thick and thin. They could take any amount of abuse, abuse that I’d be horrified to subject any of today’s phones to.

Since the iPhone’s launch in 2007 and the meteoric rise of Android since early 2010, however, I don’t think I’ve ever given Nokia much thought. The company made great phones, but then Google and Apple completely redefined the mobile phone.

Abandon ship

Stephen Elop, Nokia’s CEO from 2010 to 2014, admitted this as well. In his now famous “burning platform” memo, Elop compared Nokia to a burning oil platform with the employees faced with a choice of either perishing in the flames or jumping into the cold water below.

Image: Reuters

Image: Reuters

“We fell behind, we missed big trends, and we lost time,” he said.

In the memo, he outlined how Nokia lost so much ground in such a short span of time. In a period of just two years, the iPhone had taken over the high-and smartphone space, Android had taken over the mid-range devices space and MediaTek, which had started licensing cheap chipset designs, had helped flood the low-end market with phones.

Blaming Nokia’s culture for not innovating fast enough, he added that the company was fighting the wrong battle, that the war was now about ecosystems, not devices.

“We're going to have to decide how we either build, catalyse or join an ecosystem,” he stated.

We all know what happened after that. Nokia stopped work on its in-house MeeGo OS, sold itself to Microsoft and started building Windows Phone-toting Lumia phones, the first being the Lumia 800.

“Differentiate”

Elop believed that “differentiating” the company from the competition was key to its success. “Entering the Android environment late, we knew we would have a hard time differentiating,” he told Cnet in an interview in 2012.

The Microsoft buy-out and Microsoft’s initial, aggressive push for Windows Phone adoption brought some relief to the company. The Lumia 820, 920 and 1020 series saw a taste of success, but fortunes again declined thereafter.

By 2015, Microsoft’s Mobile Devices Group — that oversaw Nokia — had shut down and Stephen Elop, who was heading the division, was axed.

Since then, Nokia’s manufacturing, sales, business and Nokia-branded feature-phone division were sold off to FIH Mobile, a subsidiary of Foxconn and the rights to the Nokia brand name and certain standard essential patents were sold to HMD Global.

The new Nokia

The Nokia that we see today is, surprisingly, largely the same company that it was before Elop. HMD Global is a Finnish company that is largely comprised of ex-Nokia employees and FIH Mobile still has strong ties to the old Nokia.

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HMD Global is a separate company, however, and Nokia has a seat on its board of directors, form where it overseas quality control of future Nokia-branded products.

The new Nokia-branded phones are designed by HMD Global and FIH Mobile handles manufacturing and distribution. Nokia, as a company, only checks to see if the phone is worth putting its name on. Nothing more.

The Nokia 6 is the first real smartphone that resulted from this convoluted partnership. As we’ve mentioned in the past, the Nokia 6 seems like a well-built, well-designed phone, on paper at least.

The Nokia 6 is new, a true refresh. Just look at HMD’s and Nokia’s websites. The company isn’t resting on its laurels, nor is it harping on its past. The website simply states, “We believe that technology can enhance and improve the lives of billions of people around the world. In 2017 we will enter the global smartphone market with the next generation of Nokia phones running Android.”

Has Nokia learnt its lesson?

Elop’s argument for shifting to Windows Phone seemed like a good idea at the time, but in hindsight, cost the company dearly in terms of experience in the Android space.

And what happened to “differentiating” itself from everyone else? The market today, if anything, is even more heavily flooded with devices of all shapes and sizes.

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Image: Reuters

It’s virtually impossible to carve out a niche for yourself.

The likes of Xiaomi and OnePlus are hanging on to the sub-Rs 15,000 and sub-Rs 30,000 space, Samsung and Apple are fiercely defending the high-end market and any number of perfectly capable smartphones are filling in the gaps.

What’s Nokia’s USP? What is HMD Global hoping to sell us?

Is it all in the name?

Nokia only stands out for its name. If I saw a Snapdragon 430 powered phone for Rs 17,000 from an unknown company called HMD, I’d dismiss the company outright. With the likes of Asus and Lenovo slugging it out and not getting anywhere, what chance does HMD have?

HMD has invested heavily in the new phone. In fact, the company claims to have set aside over $500 million over the next three years just for these new devices. Without the Nokia brand name, all this effort will mean nothing.

super-mario-run

Take Super Mario Run, for instance. It’s a great game but is ridiculously overpriced. Without the Nintendo and Mario branding, however, would you ever bother with the game? Isn’t Pokémon Go simply Ingress with a Pokémon skin?

I have high hopes for Nokia, if only because I hope that the company will stick to its ideals of “quality, superior craftsmanship and relentless focus on the consumer experience”. Android needs that, now more so than ever.

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The Nokia name stands for a lot, as does Nintendo’s, and for some, that’s enough. But is it enough to make a successful smartphone? Will we be able to look beyond the spec war and pay a premium for design and build quality in the budget space? To put it another way, would you buy a Nokia 6 for Rs 17,000 when you can get a more powerful Redmi Note 4 for say, Rs 12,000?

Honestly, I’m not so sure. One thing I can say for sure is that the Nokia 6 looks far more enticing than the Asus ZenFone 3 Max or Lenovo K6 Power.

There is a market for Nokia’s brand name, but I have a feeling that it’s not big enough. I only hope that time will prove otherwise.


Published Date: Jan 10, 2017 10:09 am | Updated Date: Jan 10, 2017 10:09 am