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Microsoft Is Still Deciding How to Brand Its Mobile Devices

Apr 27 2014, 12:51pm CDT | by

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Microsoft Is Still Deciding How to Brand Its Mobile Devices
 
 

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Microsoft Is Still Deciding How to Brand Its Mobile Devices

Microsoft announced its bid for Nokia on Labor Day weekend in Sept. 2013. Now it is almost May but I learned this weekend from a Microsoft spokesperson that they still haven’t decided on a name. That would certainly explain why they haven’t yet shared that decision with the analytical community  I was misled by the fact that the entity that bought Nokia’s Devices and Services business on April 25th is called Microsoft Mobile Oy. That implied to me that was the brand they were going to use going forward. That is not correct.

Since little information was previously made available explaining any of this you may find the attached text from them of use:

“Microsoft will not be using Microsoft Mobile as a brand name for Nokia; the Lumia and Asha brands and products as well as rest of the Mobile Phone portfolio sold under the Nokia brand will be transferred to Microsoft as part of the transaction. This Nokia branded product portfolio will continue to receive full support from Microsoft. Nokia does continue to own and operate under the Nokia brand, but Microsoft has licensed the Nokia brand for Mobile Phones for 10 years, as well as for the purpose of marketing Nokia branded smart devices for a limited time.

Microsoft Mobile Oy is only the legal entity and Microsoft subsidiary to which the Nokia Devices and Services business was sold. The products and services acquired in the deal are now part of the Microsoft Devices Group, an expanded devices business that includes Lumia smartphones and tablets, Nokia mobile phones, Xbox hardware, Surface, Perceptive Pixel (PPI) products, and accessories.  Any further decisions regarding specific branding will be made further down the road as part of the future integration.”

For those conspiracy theorists who think that Nokia will shortly be producing an Android device on its own, reread this sentence and please decipher it for me what it means: “Microsoft has licensed the Nokia brand for Mobile Phones for 10 years, as well as for the purpose of marketing Nokia branded smart devices for a limited time.“  Any illumination would be helpful.

Followers of Microsoft know that it is a battleship that is hard to turn and not a company very capable of moving quickly. It is also a bank so that it has the resources to be slow and plodding.  That is until it totally misses new markets and opportunities in a rapidly changing world.  Think about Eastman Kodak on that one. It was once rich and dominant and now it has gone through bankruptcy when it couldn’t compete in digital photography after it invented it.

Only time will tell how that plays out in the rapidly commoditizing mobile device market.   Satya Nardella recently  beat out Stephen Elop and Ford’s Alan Mulally (now stepping down soon)  for the CEO spot at MSFT. Elop did chose to follow Nokia and return to Microsoft. Elop received a $25 million payout when he left Nokia which caused quite a stir at the time last fall. Microsoft paid 70% of that amount so they clearly wanted him to come back into their fold.

Nokia  was skidding to disaster and running out of money and products that consumers wanted when Elop arrived in September 2010. Unquestionably, Elop succeeded in infusing a sense of urgency into the speed with which things had to be accomplished at Nokia. With its bank account plunging, Nokia had no choice.  It is going to be most interesting is to see how long the job hopping Mr. Elop stays at Microsoft this time around.  Also important is to see how much as a top officer of the company he is able to influence the slow, plodding pattern with which decisions are made such as what to call this group and how to name its products.  Slow motion was also evident in the selection of Nardella as the new CEO.

Elop at Nokia  developed excellent products which are reliable and easy to use.  They chose to emphasize cameras as a key distinguishing feature and theirs are superior to any other camera in a mobile device out there by a country mile. What they lack and they know they lack is a full suite of Apps developed for their phones.  So for now, Carry On Microsoft Devices Group.

Joan E. Lappin CFA     Gramercy Capital Mgt. Corp.

Mrs. Lappin, Gramercy Capital and/or its clients may  have positions in Nokia and Microsoft at this time. To follow Mrs. Lappin on Forbes.com click on the button at the top of this column.  To follow her on Twitter: @joanlappin  For information about our firm: info@gramercycapital.com

 

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