What to expect from Nokia-Microsoft brand dilemma

Last week, one of the best known names in technology launched a new product, the N1 Tablet. It comes from Nokia, the Finnish company that once had 40 per cent of the mobile phone market.

You can already buy another Nokia tablet, the Lumia 2520, and of course any number of Nokia phones. But these all come from the US’ Microsoft, which acquired the Nokia mobile phone business for £4.6 billion (Sh648.5 billion) last year.

Confused? You are not alone. This situation begs a few questions, such as what exactly are you getting when you buy a Nokia device, what does the brand now mean and what did Microsoft think it was getting for its money?

Nokia, a company which can trace its history back to 1865, is still a sizeable telecommunications business providing network equipment and mapping services. But the sale of the division that made its brand a household name appeared to signal the end of its ambitions to be a consumer business.

Now, just months after that sale was completed, it is marching back onto the consumer stage with a tablet.

“Many people think we have disappeared off the planet,” admits Sebastian Nystrom, head of products at Nokia Technologies. “That’s not true.”

He maintained it was a strength for his company that Microsoft was also producing products that bore the Nokia name: “Microsoft’s success is really our success.”

Microsoft is saying little on the record about the re-emergence of Finnish Nokia as a consumer brand.

But having licensed the Nokia brand as part of the takeover, Microsoft seems to be in a hurry to drop it as quick as possible. It is already disappearing from the top-end Lumia range, and it is likely to go from the budget Asha and Nokia X phones.

Extraordinary decline

What all this signals is that the value of the Nokia brand has suffered a quite extraordinary decline.

Interbrand, which compiles an annual list of the world’s most valuable brand, had Nokia at number five in 2009, but by 2013, it was down to 57. Even that looks high, considering that Microsoft apparently sees no value in continuing to use the name.

Interbrand’s Chief Executive Jez Frampton says Nokia lost its way because it lost touch with what its customers wanted.

“Nothing kills a great brand faster than a bad product. They weren’t delivering the kind of design, the kind of experience that customers wanted.”

Still, Nokia has years of experience and plenty of engineering skills at its disposal as it attempts to reconnect with consumers. But when it comes to marketing its new tablet, the strategy seems to be to copy the number one brand. Visitors to the website promoting the N1 may think they have come to the Apple Store.

With millions still using Nokia phones, and many more nostalgic about phones that used to last a week without recharging, the name is not going to disappear in a hurry. But a return to the glory days of 2009 when the brand was worth as much as Apple and Samsung combined seems a distant fantasy.

— Agencies