At the beginning of September 2013, Nokia’s mobile division was acquired by Microsoft. At the time, the Nokia brand was still one of the greatest names in the mobile industry, with more than 30% of the world’s market share. The decline had started years before, though, and it’s questionable if such a scenario could have been avoided at all.
Nokia once held 40% of the global market
The fact Nokia sold its mobile business to Microsoft was unexpected, but in some way, the reason made sense. The company couldn’t compete with growing iPhone and Android eco-systems with its obsolete Symbian operating system, but it still had a good base to make plenty of improvements.
Microsoft purchased Nokia for 5,44 billion euros, approximately one-tenth of its former net worth measured by market capitalization. What’s more intriguing, is the amount of money Microsoft spent on the Nokia mobile was less than it had paid for Skype before that.
Way before Microsoft even acknowledged its intentions with Nokia phones, Stephen Elop, the guy who came from Microsoft, became Nokia CEO under foggy circumstances. Namely, many people asked themselves how is it even possible for a former Microsoft employee to come to such a high position in Nokia?
Microsoft killed Nokia for the first time
Well, shortly after, it was obvious. By killing Symbian, and leaving Windows Phone as one and the only platform to make phones, Elop virtually ruined every effort of former Nokia’s leadership to re-write Symbian OS and try to improve user experience.
When it became obvious that forcing solely Windows Phone, which couldn’t achieve even 2% of the global market share, resulted in additional losses, Elop stubbornly rejected any idea or the possibility of introducing Nokia phones based on Android.
The market share decline caused additional losses, which consequently reflected a significant share price drop. Microsoft was apparently in the right place at the right time and took advantage of the situation. Or maybe, Microsoft was the cause this situation in the first place? Eventually, we will have seen that Microsoft actually lost 8 billion euros.
HMD as a new hope
Microsoft’s Nokia adventure lasted the next three years. In 2016 Nokia brand used on smartphones was sold to HMD, a completely new name in the mobile industry. In the beginning, HMD really made efforts to utilize the glorious Nokia brand. Android was instantly adopted as the prime platform, and it looked like things were going pretty well.
But not every story has a happy ending, and some others seem not to have one at all. HMD’s struggle with Nokia phones is entering its 8th year now, and it’s still nowhere. The contract expires in 2026 which is three years away. In recent years, we’ve been witnessing a decline in the Nokia Mobile product line, which has been reduced to a narrow portfolio of cheap phones. What’s more concerning, plenty of them are dummy ones.
I’m not implying that such phones don’t have the potential in emerging markets, but this is definitely not a good idea to build the brand, especially the one with the Nokia name. The brand which once held 40% of the global market, and was the symbol for the industry, ended up in a shithole, and became a synonym for cheap phones.
Is HMD done with Nokia?
The saddest part of this story was this year’s MWC in Barcelona with the HMD’s booth. In the pre-pandemic era, HMD used to rent glamorous booths in attractive fair locations, which you couldn’t enter without an invitation. A little bit arrogant, isn’t it?
This year, while the Nokia Networks had a glamourous booth of enormous size, Nokia Mobile, i.e. HMD, was located in Pavilion 6. For those unfamiliar with the matter, this location at the fair is far away from serious manufacturers’ booths, which are usually located in Pavillion 2 or 3. When I finally found the HMD’s booth after a long walk, I was stunned. They were located among accessories manufacturers, and the size of the very booth was comparable to those of the hot dog vendors.
At that moment, I realized that HMD is done. There is still a chance for miracles, though. For instance, if some other company buys the Nokia name, invests new millions, and starts to make some serious products. But after all these years, will the Nokia brand still matter? I don’t think so, and I wish I was wrong.
The new generations of consumers, which ought to be the base of such product development will hardly remember the once-famous Nokia brand.
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