Nokia continues to clean house. On Monday Nokia announced that the head of its smartphone division was leaving. This follows a change in CEOs. Rumors are that Nokia’s chairman, Jorma Ollila, will leave later this year.
These moves seem very appropriate given Nokia’s stunning collapse. Several years ago, Nokia was one of the dominant global players in the world of mobile communications. Today, Nokia is being left behind by Apple and Blackberry. The company’s stock price has fallen from a high of about $40 per share to less than $10 per share, reflecting the decline in the business.
One of the reasons Nokia has fallen so fast is that it has a simple branding problem: Nokia isn’t a distinctive brand. It is a brand with positive associations and high awareness, but it isn’t unique.
For many years, Nokia seemed to successfully do what marketing experts say you can’t do: serve all segments in a market. Nokia sold very high-end, technologically advanced phones and simple, inexpensive phones, all under the Nokia brand. The branding structure was very simple: the Nokia brand with a product number, such as N8, the company’s newest smartphone, or E7.
Of course, many branding problems only surface over time. And that is certainly the case for Nokia. By playing in all segments of the market, Nokia watered down its brand, eroding its meaning. What is Nokia, anyway? What would I Nokia smartphone be like? I really don’t know.
Nokia has competitors with very strong brands. Apple has created a remarkably strong brand portfolio with well-defined brands: iPod, iPhone and iPad. Blackberry is a strong brand, too.
The new leadership team at Nokia has a long list of challenges. Developing a more compelling brand portfolio should be one of the top priorities.