The Finnish company signs a new agreement, making a comeback doing what they once did best, but is the boat already too far gone?

 Two years after Microsoft’s mistreatment of Nokia’s mobile business, the Finland based company has signed a new strategic brand and intellectual property licensing agreement.  Nokia has agreed to license its brand and intellectual property to the newly created company, HMD global. The company will be developing Nokia branded phones and tablets for the next ten years, running on an Android operating system. For some, the hopes for the perfect Nokia Android phone will finally become a reality. However, will a highly-recognised brand name be enough to disrupt the highly competitive market of smart phones and tablets?

Prior to 2007, and before Apple changed the game by introducing its very first iPhone, Nokia was one of the top 10 brands in the world. The brand equity was stronger than any other brand at the time, defined by its near-unbreakable handsets, stylish designs and a product that consumers trusted. Positive associations to the brand were endless, and every new product introduced into the market was embraced with little hesitation. Some parents had created such a strong bond with the brand that they decided to name their children after the company.   It is likely that the comeback will be based on the hope that consumers remember and embrace the once beloved and trusted brand. After the poor decision to bet on the Windows mobile platform in an attempt to enter the smart phone market, Nokia was eventually forced to reinvent themselves. What was once the biggest mobile phone brand in the world, had become a telecommunications equipment maker, producing mobile network and broadband infrastructure. Having been out of the game for some time, consumers can however be reluctant to re-introduce Nokia into their set of trusted brands. Particularly if the scars endured from the brand’s previous venture into smartphones are still present.

Had Nokia adopted this strategy when the smartphone boom was just starting, as opposed to staying true to its own system, it could have potentially maintained its powerhouse position. The brand equity would not have been compromised, and key competitor Samsung would not have replaced Nokia within the market. However, Nokia’s re-entry in to the smartphone market now, is likely to result in delivering a very similar product to key competitors. Lacking any real innovation and differentiation, the brand has an extremely large task ahead of them. Nokia was once the world’s leading mobile phone maker from 1998 to 2007, but was overtaken by Samsung after failing to respond to the rapid increase in consumer preferences for smart phones. With Apple dominating the high-end market, and Asian smartphone manufacturers such as Xiaomi and Huawei leading the feature phone market, which was once dominated by Nokia, something new must be brought to the market that truly excites consumers for this comeback to be successful. The current smartphone market consists of the same product offerings with a different brand name slapped across the product. The market lacks any real innovation, with profits being difficult to come by. As a result, Nokia’s return to the market can potentially be a simple case of too little, too late. Only time can tell whether this new strategy can return Nokia to its glory days of being the powerhouse brand they once were.

Simon Wang
Strategy Intern 

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Credits: Nokia, The Telegraph UK, The Sydney Morning Herald, ABC News & The Verge.