This is less of a blog and more of a case study spurred on by a recent announcement about a brand that once dominated a market. A brand that was, in recent years, beaten by its competition, resulting in an almost complete fade out from the consumer market. This case study is still happening and some of the questions posed in this blog will remain unanswered for some time. However, in the next few years we might just see how the power of a brand, even a forgotten one, can bring a business back from the ashes.
If I haven’t lost you, then I’ll give you the premise as to why I’m attempting to summarise a very long and very complicated history. This blog stems from a recent article by the BBC which discusses how a small team are trying to resurrect from the ashes, one of the largest, well-known brands in telecoms history – Nokia. This got me thinking. Can you ever kill a brand? What are the challenges this team faces? Why do they believe this is even possible?
You may have noticed that for some time now, Nokia have not been selling any smartphones. This is partly because in 2014, Microsoft acquired Nokia's mobile device unit for $7.2 billion. The Nokia-Microsoft partnership failed to make any headway in the competitive smartphone market. These articles do however highlight something that many people still recognise - Nokia was once a global player, an innovator, and a brand loved by many.
I was (pre iOS and Android) a die-hard Nokia fan, as were many people of my generation. Some of the older handsets are still considered the greatest phones of all time, pioneers of the mobile phone industry we know today. In particular, and from my history, the indestructible and ever-lasting Nokia 3210, the super-slick Nokia 8110 which featured in the 1999 Matrix movie, and the feature-rich and impressively spec'd Nokia N95 8GB. Specific handsets aside, in the early 2000s Nokia supplied 40% of the world’s mobile phones, creating Finland's first globally recognised consumer brand.
So what happened?
Everything... times changed, events ensued, and in short, none of these acted in Nokia’s favour. Although Nokia’s feature-phone business was still going strong, particularly in the developing world, their smartphones failed to secure any real market share. This was primarily a result of the launch of Apple’s iPhone. The launch of Android shortly after saw a shift towards consumers favouring one of two operating systems – iOS or Android. Eventually, the remaining operating systems (such as Blackberry OS) lost consumer interest, which left a number of companies wondering what was in store for the future of their telecoms divisions.
A very brief history
Below are some of the key milestones in the mobile phone industry, and demonstrates the rate at which the industry has developed into what we know today…
1973 – the first mobile phone call was made by a Motorola engineer.
1983 – Motorola released its first commercially available mobile phone, the Motorola DynaTAC 8000X.
1985 – the first mobile phone call in the UK is made.
1992 – the first text message is sent.
1998 – the first 3G networks are launched.
2002 – the first camera phones.
2003 – the Nokia 1100 is released which remains the best selling phone of all time.
2005 – Google acquires Android.
2007 – the first iPhone.
2008 – the first Android phone.
2008 – Microsoft kills off Windows Mobile due to an inability to compete with iOS and Android, and begins development of their new mobile operating system, Windows Phone.
In 2008, Apple's App Store launched and in 2009, WhatsApp was released.
Around 2009 was the start of the ‘Smartphones Patent Wars’. A term used to describe a period of unprecedented global technology patent disputes. Mobile phone manufacturers partnering together or suing one another to secure and expand their market share. These wars publicised many interesting facts about the telecoms industry. The value of the mobile phone market, how the history of mobile development is relevant to current market shares, and how the future of the mobile industry will be shaped by the manufacturers who continue to innovate in the field.
It is because of Nokia’s involvement in this history, and thier former success in the mobile phone sector, that a dedicated team have taken an extraordinary decision to resurrect the Nokia consumer brand and re-enter the mobile, and in particular, smartphone market.
So why does Nokia stand a chance?
Obviously, it’s all very early and hypothetical at this stage. Small news even. In truth, no one knows if they do stand a chance. Where so many have or are failing, this team believes they have the winning ingredients to once again walk tall with the mobile giants. They are relying on the brand reputation which, despite failures in recent years, is still admired by many. In fact, Nokia developed 8 of the top 10 best selling mobile phones of all time. The scale of the market for the low-end range of mobiles should enable them to turn a profit, allowing additional funds to be pumped into developing high-end smartphone ranges. Finally, they are building a dedicated, experienced, and modern team who have the belief that they can once again make Nokia the heavyweight champions of the world. This confidence alone could take them a long way.
Many would be reluctant to say this would suffice, and I would be inclined to agree. However, it is the typical iceberg analogy. The 10 percent above the surface we know and understand, but only a small proportion will know what’s lurking under the surface. There is always so much more driving business and commercial decisions which, collectively, may just be enough to make this resurrection happen. Plenty of passion, strong partnerships and an impressive marketing campaign would all help. The key ingredient will always be a new device which reflects the quality and innovation for which Nokia once represented. One that can bring swathes of forgotten fans back from the competitors that once killed it off.
Nokia as a brand
The acquisition of the Nokia brand looks to be a key driver. Otherwise, why not go it alone under a completely new brand name and style? All the combined elements which has led to this commercial decision; a once positive consumer perception, an excellent brand reputation, and a loyal fan base. It really does go to show that a brand goes well beyond just a name. What they realised is, like many types of assets, a brand can be repaired, rebuilt and improved. Think Skoda for example. This is another great example of a company who kept their brand, regardless of how it was perceived, and turned it into a dominant player, creating a product which performed better than ever.
History also dictates that innovation and intellectual property also play a critical role in the ongoing success of a business. It’s not enough that the handsets will be manufactured by Foxconn (who also make components and hardware for many other smartphone retailers), but there needs to be something new, something innovative, something to reshape the current landscape to drive the new generation of customers who are loyal to the devices they are currently using back to Nokia. This is what happened to Nokia when the iPhone was first introduced.
The challenge for almost every tech company, however small or established, is the rate at which innovation is progressing. Sometimes, an entire industry can be reshaped in ways which are impossible to predict, simply by someone entering with a ground-breaking concept. This is the driver, the one way that a startup (regardless of whether it was once the dominant player) will be able to compete – by changing the way the world perceives the industry.
Most of the current major tech companies managed this in one way or another. Driverless cars, a near infinite e-commerce platform, or a simple way of hailing and paying for a cab, order food, or find a place to crash for the night. As the smartphone industry is saturated with companies failing to make any meaningful headway or turn over a significant profit on the sale of each handset, companies are becoming increasingly reliant on the ability to develop and license the latest technologies. This is where opportunities for real profit margins lie. Nokia may have a further trick up its sleeve, perhaps realising that smartphone functionality alone is no longer enough. Customers are wanting more. With the development of smartwatches, connected homes and the Internet Of Things generally, there is certainly opportunity to develop a brand and range of products to increase integration and operation between such devices.
So what’s next?
It will be interesting to see if such a seemingly impossible challenge is actually possible. Can a brand really live forever? The cards are certainly stacked against Nokia, but, just maybe, they can pull something magical off, not only for their benefit, but for the benefit of consumers and the industry as a whole.