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Microsoft shouldn't ditch the Nokia brand

Column Would undo the Finnish phone firm's success in the smartphone market
Fri Oct 25 2013, 15:20
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THIS WEEK I was in Abu Dhabi for Nokia World 2013, the firm's first big event since Microsoft acquired its devices business at the beginning of September

When not being thrown around the desert in the back of a Jeep or burnt to a crisp while sitting in the shade, I was keeping a close eye on all things Nokia. Tuesday was the firm's big day, with Nokia CEO Stephen Elop taking to the stage to showcase the company's latest products.

It wasn't a typical Nokia announcement, however. The firm showed off its first 'phablet' device, the Nokia Lumia 1520. With a 6in screen, the device is 1.3in larger than any Nokia Lumia phone to date, and it's also the first of the Finnish phone firm's Windows Phone devices to boast an HD 1080p screen and a quad-core processor under the bonnet.

Nokia's most interesting unveiling came next, with Elop taking the wraps off the Nokia Lumia 2520, the company's first tablet device. While this in many ways sees Nokia directly competing with Microsoft's own Surface tablets, it also sees something new being brought to the table, with Nokia bringing its high-end Lumia design and application credentials to the market, making the Lumia 2520 in my opinion the most impressive Windows tablet device yet.

When not showcasing Nokia's latest devices, Elop was quoted as saying that Nokia still does not know whether it will retain its brand going forward, with Microsoft yet to decide whether it will scrap the brand in favour of its own for future smartphone and tablet devices.

In a statement, Nokia said, "In factual terms, Microsoft intends to buy the right to use the Nokia brand on its phones for 10 years. There’s a commitment now that this will happen for the Asha and feature phones business going forward. On smartphones, it’s more complicated and we’ll be seeking to create a unified brand across Lumia and other Windows based devices. But we’re still a long way from when that decision has to be made.”

While it's likely that Microsoft is far from making a decision, it's a worrying prospect that the firm would even consider replacing the Nokia brand with its own, especially when it comes to smartphones and tablets.

Sure, Microsoft announced today that Surface revenues were up, but it also famously took a $900m hit on poor sales of its debut tablet. It's also yet to make its mark in the smartphone market, with another firm's brand, namely Nokia's, being what has sold Windows Phone devices. 

Nokia might have lost the lead in the smartphone industry, but it has built a solid reputation over time, be it with the Nokia 3310 back in the day or most recently the Nokia Lumia 1020 smartphone, heralded by many as the best cameraphone device on the market.

The brand has done a lot for Windows Phone, too. Recent figures show that Nokia phones account for 85 percent of the Windows Phone market, which means the rest of Microsoft's partners - including HTC, Samsung, Huawei and ZTE - have hardly made a dent.

This means it's thanks to Nokia that Windows Phone now holds a double-figures stake in the UK smartphone market, with Kantar Worldpanel Comtech revealing earlier this month that the operating system now has a 12 percent share. The analyst also credited Nokia - not Microsoft - for this growth, saying "Windows Phone's latest wave of growth is being driven by Nokia's expansion into the low and mid-range market with the Lumia 520 and 620 handsets," again confirming the strength of the Nokia brand. 

The Microsoft brand, on the other hand, seems somewhat dated, and I think it's fair to say that most don't have a favourable opinion of it. With Nokia's hardware and software prowess behind it, potential Microsoft branded Lumia phones likely wouldn't be much, if any, different from the Nokia Lumia devices on the market today. But in my opinion, not as many people would be buying them.

Sure, the Xbox is popular, but the Microsoft brand is tarnished by other issues such as the Windows 8 backlash, NSA snooping revelations or the success, or lack thereof, of its own Microsoft branded Surface tablets. 

Putting this brand on Lumia smartphone and tablets could undo the hard work that Nokia has so far done for Windows Phone, and might be one of the biggest mistakes Microsoft could make. µ

 

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