Nokia and the 'death' of the pure-play mobile brand

Nokia: sale of its handset business marks a turning point for the pure-play mobile brand
Nokia: sale of its handset business marks a turning point for the pure-play mobile brand

The sale of Nokia's handset business to Microsoft will go down as a key moment in mobile history and could mark the end of the pure-play mobile brand.

As HTC continues to struggle and BlackBerry puts itself up for sale, the once mighty titans of the mobile industry are shadows of their former selves.

Samsung and Apple remain the only companies that are able to make a profit from handset sales alone, due to their sheer scale.

So where does the future of the mobile market lie?

Kevin Chesters, the executive planning director of McGarryBowen and former planner on the Nokia account at Wieden + Kennedy, claims Nokia’s position is a "cautionary tale".

Dominant companies can fall from grace quickly in the technology space, with Chesters citing the example of Netscape, which used to have around 85% of the browser market share in 1997, before being sold for a dollar about six years later.

Chesters said: "Nokia’s position today is a cautionary tale because everyone thinks if they are at the top now, they will be at the top forever.

"There were many moments where Nokia could have turned this around. They had their record quarter in smartphones less than three years ago. There was a little touch of arrogance and believing they will always be there."

Nitin Bhas, senior analyst with Juniper Research, pointed out that Nokia’s downfall came about from not carrying its iconic phone brand into the smartphone market, resulting in Nokia having an estimated 65% decrease in smartphone shipments in 2012 compared to 2010.

Bhas said: "This does effectively mark the end of the pure-play mobile brand. Nokia has been struggling to position itself going forward against the likes of Samsung and Apple."

The success of mobile brands now lies in the ecosystem. Chesters pointed out Nokia failed to keep up with the cyclical nature of the mobile industry.

He argues that 20 years ago, consumers cared most about the network, with young people choosing Orange and businessmen choosing Cellnet.

Later, Motorola revolutionised this when people started making their decisions primarily on the phone manufacturer rather than the network, while now the operating system is the key factor.

The rise of the mobile internet in mid 2011 drove the rising dominance of operating systems such as Android or iOS.

Chesters said: "History will show if Nokia had invested in its Symbian operating system it would have done better than what it has done."

Martin Garner, vice-president of CCS Insight, said HTC could be the next acquisition target as traditional mobile companies struggle.

He said: "Now more than ever it is important to compete as a bigger ecosystem. If you are a pure play manufacturer, that’s a little harder to do."

Nokia’s handset business will benefit from being part of Microsoft believes Garner, because they will be able to "do more joined-up marketing and put more money behind it".

Questions remain over the Nokia brand itself. Microsoft has a ten-year licensing agreement to carry the Nokia name on handsets running off Windows Phone.

However, it is unclear what will happen to the parts of the Nokia business that have not been bought by Microsoft and whether there will be a clash of brand names when the ten-year licence deal runs out.

Garner said: "Microsoft would be mad to ditch the Nokia brand in the short term because there are very strong brand values attached to it."

The mobile market is an unpredictable place, so it is hard to second-guess what will happen to the Nokia brand, but the mobile market is set to be revolutionised again.

Expect handsets to now drive ecommerce sales rather than be a means to an end themselves, with Amazon and its loss-leading Kindle device the classic example of how commerce companies will lead the future of mobile devices. 

Discussion

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now

Latest

Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Toyota achieves the impossible by calming angry Roman drivers
Tom of Finland's 'homoerotic' drawings made into stamps
YouTube reveals user habits to appeal to 'older' marketers
Ex-M&S marketing chief Steven Sharp consulting at WPP
Wolff Olins reveals new CEO after Apple poaches Karl Heiselman
Glasgow offers £30,000 prize to best digital idea for 2014 Commonwealth Games
Google's revenues surge but shares drop as it grapples with transition to mobile
Facebook beats Twitter to most 'marketing friendly' social media site crown, says DMA
Fableists believe children like Finn should be outdoors enjoying life
Homebase, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message
Lynx unleashes £9m 'Peace invasion' campaign
Social Brands 100 Youth: Pizza Hut most social youth brand in UK
Cheryl Cole is wild and arresting in new L'Oreal work
Morrisons told not to show alcohol ads during YouTube nursery rhymes
O2 head of brand Shadi Halliwell departs after 23 years at company in restructure
Tesco hit by further sales decline as it turns to digital Clubcard and social network
Branding guru Wally Olins dies aged 83
Duracell short film captures epic Transatlantic voyage
Ash runs Tinder experiment to show smokers are less desirable to opposite sex
British Airways teams up with Gerry Cottle Jnr for summer of rooftop film screenings
Arklu says 'girls can be superheroes too' with doll design competition
Coke enters squash market with Oasis Mighty Drops
Virgin Galactic signs up Land Rover as space flight sponsor
Motorola marketer Andrew Morley departs as Google gears up for sale to Lenovo
US Airways apologises after tweeting obscene image at a customer
Mumsnet admits users' emails and passwords accessed via Heartbleed bug