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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