Editorial

Why Microsoft should license the Nokia brand for smartphones

Nokia has been the driving force behind mobile adoption in the majority of the world's markets and to a larger extent in developing nations where consumers are much more price sensitive and loyal to their trusted brands, due to the quality of service and brand value developed over the years.

The recent acquisition of Nokia's mobile devices division by Microsoft has posed a big question for consumers around the world regarding the identity of the once iconic mobile brand, as Nokia announced that it will be licensing its brand for use on low-end phones which have been referred to as "mobile phones" by the company. 

Nokia has been the de facto brand for most consumers in the market for a high quality device with the promise of great service, as reflected by the high satisfaction numbers in various surveys. The majority of users outside of the developed world for whom the iPhone is way beyond reach find Nokia's products and services more than satisfactory.

In some cases, such as HERE Maps and Nokia Music (now known as MixRadio), Nokia has appealed to the needs of local users even more than the premium experiences provided by the iPhone or high end Androids.

Now, Microsoft doesn't enjoy the same reputation with consumers in the markets that Nokia has championed during its lifetime. This leads to the bigger challenge for Microsoft, which is trying to gain a larger chunk of the smartphone marketshare for the Windows Phone operating system. 

The considerable growth that Windows Phone has seen can most definitely be credited to Nokia's brand value rather than Microsoft's, in the markets where it has been successful over the last couple of years. Consumers who have purchased Windows Phone based Lumias have shown their trust in the Nokia brand in contrast to other Windows Phone OEMs such as Samsung or HTC, which is proved by Nokia's share of the Windows Phone market, which currently stands at over 90 percent.

All these factors bring up the same question over and over again, "How can Microsoft manage to sell Windows Phones without the Nokia brand if they decide to leave the name behind?" It has been reported that Microsoft will be licensing the Nokia brand for a period of ten years for lower end devices, while Microsoft will own the Lumia and Asha branding according to the terms of the deal between the two companies.

The U.S. has not been a successful market for Nokia for a long time, and despite efforts such as "Operation Rolling Thunder," Nokia still remains to get a bigger chunk of the smartphone pie in the country. Microsoft has been traditionally focused on the US market as it has regularly launched products exclusive to the American market. 

However, narrowing the focus on just one nation at the expense of traditional Nokia markets such as India, Brazil, South Africa and numerous European countries which have shown double digit growth for Windows Phone and surpassed iPhone in overall adoption, would be a very bad move for Microsoft going forward.

With the relatively weak reputation of Microsoft among consumers, especially in developing markets, and excitement for products from Apple and Google, it would be wise if Microsoft licensed the Nokia brand for smartphones as well, and prolonged the transition towards a newer sub-brand (Lumia/Surface) till things get brighter for Microsoft's mobile operating system.

Microsoft could also examine the possibility of licensing the Nokia name in countries where it would make sense, similar to what Lenovo is planning to do with Motorola Mobility in the United States after completing its acquisition. 

Images via TechGig, Geekazoid and Fonearena

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Hello,

I will take this one step further.

Microsoft should provide--free of charge, or at least with very generous licensing terms--all of the Nokia design elements, manufacturing processes and other technologies to all other Windows Phone manufacturers. But only for use in devices which run Windows Phone (Windows RT?) and they are willing to guarantee a certain quality level on. In other words, the devices can't run Android, BlackBerry, other derivations of Linux and so forth. This would allow all the companies that make or have made Windows Phone devices, such as Acer, Alcatel, Asus, Fujitsu, HTC, LG, Samsung, ZTE, etc. the chance to build very high-quality Windows Phones without having to worry about competing with Microsoft. They could even try to create their own premium brands, with Microsoft's Lumia line setting the bar for the bare level of features and quality. If all of the manufacturers were to offer something "better than" Microsoft's product, that would probably help drive sales and also help them compete better against the Android market, which is something of a race to the bottom for manufacturers, in terms of profit.

Regards,

Aryeh Goretsky

Nokia has been the driving force behind "Pre-smartphone" mobile adoption in the majority of the world's

fix'ed


The considerable growth that Windows Phone has seen..

Wait, 0 - 3.5% in four years is considerable growth? Not in my book. And considering that about 80% or more of that is in the very low end market, it's not very profitable either.

This wouldn't make any sense. Why would you buy a brand to dilute it? There would be no benefit to Microsoft for doing this...

I like the Nokia brand and logo -- I think there is significant value there. I find very few people with a negative opinion of Nokia as a company, or with Nokia hardware.

For the first time, I think, ever, our local news station had a tv piece on Windows Phones (the Lumia 1020, specifically), and it was very positive. Essentially, short of a DSLR, the reviewer said it had the best camera, period

Well, Nokia is under the shelter of MS now and what bigger brand can promote it. Nokia has setback in smartphones business and should use aggressive approach to back into game where it was dominated them 5 years ago.

I agree with tropolite's comment on how Microsoft is still dealing with the damage from the various *bundling* investigations of over a decade ago - it seems that some folks are all too willing to brand Microsoft with a Scarlet Letter for it, and basically classify the entire company as unredeemable, while companies that have done far WORSE (such as Nike) are given passes.

I'll never forgive a company for the unspeakable act of bundling a web browser with an operating system. Such behavior is reprehensible and beyond redemption.

Lord Method Man said,
I'll never forgive a company for the unspeakable act of bundling a web browser with an operating system. Such behavior is reprehensible and beyond redemption.

Then you obviously never did web development...

Fighting IE6 has caused the suicide of many web designers and devs...

LogicalApex said,

Then you obviously never did web development...

Fighting IE6 has caused the suicide of many web designers and devs...


Better yet, if I were MS, after all the hating of people that they bundled IE with Windows... I would've not bundled any browser with Windows and prevent OEM's from adding them too.

Good luck haters

vcfan said,
I found this article pretty funny, considering this
Yes with APply-ifying statements like "With PC shipments falling over 10 percent last year, according to Gartner"

The above means that currently Windows PC still outsell -say- Mac by a ration of about 6:1 and there are several very valid reasons why less hardware is sold, the general state of economies worldwide for one. By the end of the year there will be 500 million consumer PCs (at least) running Windows 8 .. Not quite the number Apple is expecting to see for OS X devices.

Also the notion that these consumer products are a core product for MSFT is a false one and people should try and understand these are far from a major impact on MSFT numbers no matter how they turn out.

Then it seems the MSFT shareholders are not interested at all in innovative and groundbreaking and will shoot down or basically make anything remotely special go away as fast as possible.

Everyone already calls Windows Phone devices from Nokia only "Lumia". It doesn't really matter if it is built by "Microsoft" or "Nokia".

Microsoft should simplify their product portfolio: "Asha" for cheap phones. "Lumia" for smartphones and "Surface" for PCs.

Enron said,
Good, I can't wait. I want the next version of the 1020.

Same. That will be the phone to get! (as long as it has 1080p, slightly larger display but still under 5", faster hardware and hopefully a smaller bezel).

I agree with the article to a degree where licensing the Nokia brand would be wise to do as the brand itself has a solid reputation worldwide (aside from the US it seems).

And I would give Microsoft the benefit of the doubt. Looks like there's some that just cannot shrug off the Microsoft of 10 years ago. Microsoft with a new business focus, massive rollout of numbers of new products of all types, a new CEO, COO, Chairman of the Board, and refreshed customer focus.

Microsoft, show us how you're changing for the better.

Its Microsoft, they'll mess it up like always do even though this is the obvious way to go, t they'll name it some ridiculous name then retract it for an equally stupid but shorter, unrecognizable name later. End of WP is nigh.

I don't know, MS have had a lot better names lately. And "Nokia Lumia 1520" doesn't exactly roll off the tongue. Theres so many Lumia phones with odd numbers, it confuses people.

MS could actually improve this now by starting over with a far more simple naming scheme that still uses the Lumia name. They could have a high end phone and just call it "Lumia".

On the other hand, without the use of the Nokia name it will definitely hurt sales, especially in the UK and Europe.

I'm really worried that MS will **** this up. WP is finally gaining traction, but if I know MS right, they'll start ignoring anywhere else but USA, England and Germany, all the while making ridiculous names for the new phones.

"Microsoft Lumia Professional".. or "Microsoft Lumia with Windows Phone 8.1"

XorpiZ said,
I'm really worried that MS will **** this up. WP is finally gaining traction, but if I know MS right, they'll start ignoring anywhere else but USA, England and Germany, all the while making ridiculous names for the new phones.

"Microsoft Lumia Professional".. or "Microsoft Lumia with Windows Phone 8.1"

I really hope that they let Elop continue to run the "Nokia Division" and keep the MS culture as far away from it as possible.

from the marketing team: Microsoft Lumia for Windows Phone 8.1 with Office Mobile 2014 not to be confused with the upcoming Microsoft Surface Professional phone for Windows Phone 8.1 with Office Mobile 2014

It may be smart to keep the Nokia brand in Europe and other parts of the world, but in the US... I don't think it matters. In fact, a new brand (or using "Lumia") might actually be beneficial in the US, where most people think Nokia is a Japanese brand and have no special fondness for it.

However, it then leads to the issue as to WHY MIcrosoft's reputation is so poor, despite the relative success of Windows Phone (especially WP8).

Microsoft outside the US has a lot of bad rep while Nokia is one of the most trusted brands. Your link uses a sample of US adults.

SVG said,
Microsoft outside the US has a lot of bad rep while Nokia is one of the most trusted brands. Your link uses a sample of US adults.

so lets exclude one of the biggest smartphone markets in the world,which is a region nokia has never cracked,even when they were the top smartphone vendor in the world?

Why they shouldnt:

Nokia is the sole company that made something out of WP8 and on its own carried WP8 to over 10% market shares in some countries. Without Nokia, WP8 would be NOWHERE.

And most people bought a Lumia because it is a Nokia. Stick Microsoft infront of the name...... and most people won't get it. Especially outside the USA Microsoft has a bad name.

Anyways, personally I'm very interested in this but still think its one of the dumbest things Microsoft has done in the last 5 years.

EDIT: balmer keeps reminding me of Woody from Psych..
http://static1.wikia.nocookie....husa/images/b/b4/Woody.jpeg

Shadowzz said,
Why they shouldnt:

Nokia is the sole company that made something out of WP8 and on its own carried WP8 to over 10% market shares in some countries. Without Nokia, WP8 would be NOWHERE.

And most people bought a Lumia because it is a Nokia. Stick Microsoft infront of the name...... and most people won't get it. Especially outside the USA Microsoft has a bad name.

Anyways, personally I'm very interested in this but still think its one of the dumbest things Microsoft has done in the last 5 years.

EDIT: balmer keeps reminding me of Woody from Psych..
http://static1.wikia.nocookie....husa/images/b/b4/Woody.jpeg

So you're saying they should NOT license the Nokia brand because it's a known brand for many people and lots of them buy it because it's Nokia? How is that a reason NOT to license the brand name?

Because they're not holding on to the Nokia name for the Lumia lines.

I sold phones to average joe's the last 6 months.... Except maybe 3 or 4 during that whole time, who wanted a new Lumia because of Windows Phone or whatever....
The rest got a Lumia simply because they already owned a Nokia and wanted a new one but in smartphone way. And yes I know it only counts for my country, but I doubt this will be very different in most markets where WP8 has marketshare. (besides US of A maybe)

Shadowzz said,
Because they're not holding on to the Nokia name for the Lumia lines.

I sold phones to average joe's the last 6 months.... Except maybe 3 or 4 during that whole time, who wanted a new Lumia because of Windows Phone or whatever....
The rest got a Lumia simply because they already owned a Nokia and wanted a new one but in smartphone way. And yes I know it only counts for my country, but I doubt this will be very different in most markets where WP8 has marketshare. (besides US of A maybe)

The article was saying that Microsoft should License the Nokia brand, i.e. use the Nokia name. That would mean that the people you mentioned, who will buy a Nokia because its a Nokia will be more likely to buy the phone than if it had Microsoft's brand behind it.

You seem to be agreeing with that statement but are also saying that they shouldn't license the Nokia brand. Maybe go back and reread the article?

No. I get what he is saying. If they start to license the brand then the weight and power that the name has will diminish. It is not about agreeing that the Nokia name sells, it is about people buying Nokia because it was made by Nokia. People have trust in the build quality that Nokia have, and licensing the name out to other phone manufacturers will risk shattering that trust in the brand.

This, it's not that I personally don't trust Microsoft and its build quality of their products. I know they're usually rock solid. Microsoft holds a lot of grudge and dislike. Nokia is, at least on this side of the ocean. Seen as a quality brand. It's the company behind the name, not just the name itself.

I think its a bad move from Microsoft, better keep the partnership, bring it even closer. But taking over, no. But the future will tell

Shadowzz said,
This, it's not that I personally don't trust Microsoft and its build quality of their products. I know they're usually rock solid. Microsoft holds a lot of grudge and dislike. Nokia is, at least on this side of the ocean. Seen as a quality brand. It's the company behind the name, not just the name itself.

I think its a bad move from Microsoft, better keep the partnership, bring it even closer. But taking over, no. But the future will tell

I cannot understand what you are saying.

You do know that 99% of the people who made Nokia phones and Lumia now work for Microsoft, right? So you're saying those people shouldn't continue to use the Nokia name because they will give it a bad name? What? It is the same people making the products.

I think this guy is unaware that MS has taken over 30,000 employees from Nokia's mobile division.


My opinion is that they will treat the Lumia brand the same way they treat Xbox, Kinect, and Surface -- they will not put the Microsoft name on the product. The word "Lumia" will replace the word "Nokia" on the phones.

Edited by Avatar Roku, Feb 7 2014, 7:52pm :

He is saying that now Microsoft has taken over, the integrity of the Nokia brand may get muddied up by the Microsoft association. (e.g. We know its still the same teams making the phones, the common consumer may not.) Microsoft at this point need to be very careful about how they handle things with their devices division.

If they let them keep going as normal with just a little more say in how things tick with windows, like they did with Skype, then things should be OK. But if they take over and pump Microsoft branding and politics into the mix then how things will flow is uncertain.

The main question is, have Microsoft shaken off its baggage with it structure shake up? The way i see it. If it all falls under the Microsoft name, it can go one of two ways.

1. People look at the quality devices coming out of Microsoft, boosting their image as an innovative company.

2. Even though the products are quality. People see the Microsoft branding and become wherry and skeptical about the product.