Brands in the News

Nokia Cuts Ovi

16 May 2011  

Today Nokia announced that it was dropping the Ovi brand, replacing it with Nokia.

My opinion: the move makes sense but it doesn’t solve Nokia’s core branding challenge.

Nokia created the Ovi brand for its software products and services. On the Ovi website you can find software for mapping, email, games and music.

The concept of using a new brand for services isn’t necessarily bad; this is what Apple did with iTunes. It is iTunes from Apple and Ovi from Nokia.

The problem is that creating a successful new brand requires a breakthrough idea and an enormous investment. Ovi hasn’t taken off; it lags far behind competition. In addition, Ovi doesn’t appear to have a distinct positioning; it is a bundle of different services and products.

Companies should only introduce a new brand if the opportunity is compelling, the new brand is very distinct from the existing brand and the company has enough money to support it.

Ovi fails to meet two of these criteria; the line between Ovi and Nokia isn’t clear, and Nokia doesn’t have enough money to support it. Nokia is facing massive problems and is short on funds; investing heavily in Ovi isn’t a priority.

Given this, folding Ovi back into the Nokia brand is a reasonable move.

Of course, Nokia has a bigger branding problem and this move doesn’t fix it. Indeed, if anything the move will make it worse.

Nokia needs a distinct positioning in the market. Nokia is huge, but the brand lacks distinction. What precisely is Nokia? In a competitive market, having a brand with clear meaning is critical. Nokia is a nice brand, but it isn’t as focused and powerful as Apple or Google.

Killing Ovi is a smart move but there are bigger challenges ahead.

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