Friday, December 8, 2023

Death of a brand: 5 Branding lessons from the demise of Nokia

The journey from the 5th most valued brand in the world to the desperate brand on sale, the stock traded from $40 to a paltry $2, valuation of $150 billion to $12 billion, and the global share of smartphones from 50% to little over 3%, the share of Indian market from over 60% to mere 10%, formidable player to a marginal operator in mobile handsets segment… This is the picture that transformed from 2007 to 2012, in the period of mere five years. The Indian market share of phones further plummeted to 1.83% in 2019. This is the story of Nokia.

Finally, the inevitable in September 2013, was a $7.2 billion deal by Microsoft, to buy Nokia’s handset and services division. Interestingly, this value is about the same as Apple made a profit in the second quarter of 2013. This fate of Nokia was looming for a long. You can imagine the enormity of the problem by the fact that once Nokia’s capitalization was $10 billion more than Apple; and by the time of 2012 it turned to be $600 billion less than Apple.

This is the story of the dramatic rise and sudden fall of an iconic brand. Nokia symbolizes the ERA in mobile telephony. The era ended with the selling of the handset division to Microsoft in 2013. With lots of ups and downs and shaky management of Nokia, Microsoft finally sold Nokia to HMD Global in 2016. Microsoft also subsequently abandoned its mobile business in 2017.

There are valuable lessons to be learnt from the demise of Nokia. Nokia faltered on many accounts before eventually ending its dream run in the lap of Microsoft and HMD Global. Nokia phones today are a mere flicker of their heydays of the late 1990s and early 2000s.

The lessons are equally relevant to brands across all categories and markets.

Don’t become complacent: 

Complacency is the key to failure. It’s the other word for severely underestimating the competition. Nokia is the victim of acute complacency, an outcome of its dream run over a decade. It seemed too big to fail, too successful to falter; but it paid the price for ignoring the obvious.

Brands should keep their hunger on. They should keep the adrenalin up to remain aggressive. They should remember that market spares none. Apple seems to learn it the hard way, while Samsung learnt the lesson early on.

Don’t hesitate to cannibalize your own business or they will become the food for competition: 

Nokia needed to cannibalize its own businesses to make the way for the future. It seemed to be stuck in a time warp.

Steve Jobs once said, “If you don’t cannibalize yourself, someone else will”. Apple masters this strategy. Samsung followed.

Brands should cannibalize their own business to make a place for better successors. If they don’t do this, some other brand will do.

The other brand that came to my mind is Gillette. It created a market by moving gradually up the ladder, by cannibalizing its own business in the process. Its brand, Fusion Proglide became the fastest brand to reach a billion-dollar sale by cannibalizing most of the market of Mach3, its other successful brand. The catch – Fusion Proglide is 40-50% more expensive than Mach3.

Accept and act that the future can be way different than today: 

Symbian was never the OS of the future. Nokia failed to see the future coming. The world was moving from keypads to touch phones, hardware excellence to ecosystem prudence, closed system to open system software. When Nokia woke up from slumber, it was too late to do the correction. The market slipped irreversibly to Apple iOS and Google Android.

Brands should always keep a keen eye on the future. Remember, your current plans should be driven by future strategies.

I see a recent example of anticipating the future when Tata launched the Nexon EV and Hyundai launched its EV segment cars, clearly anticipating the declining future of gasoline cars. Tatas and Hyundais of today probably will move swiftly to the green technology of the future; better than the players who are dozing off in their current success comfort. Some will be Nokia’s of the future.

Be flexible and agile: 

Mobile phones have one of the fastest cycles of obsolescence. Nokia realized this mantra too late to implement. Nokia had one of the largest workforces and the longest churning period for getting new products to market.

Samsung has been successful in being agile and flexible. It has one of the shortest product development cycles enabling it to launch models in record time.

Nimble feet brands accommodate the changing needs of customers and they do this really fast. Apple and other manufacturers have learnt the lessons a hard way from Samsung.  

Communicate, Communicate, and Communicate: 

Nokia couldn’t strike a chord with its customers when it changed its gears to smartphones. It couldn’t instil confidence and trust. There was a severe lack of dialogue with its customers. Customers started drifting away to Apple, Samsung, and other formidable players.

Successful brands talk to their customers. The information flow and consistent communication is the key to their success. Brands should communicate about their past glory, their current readiness and their future aspirations. Communication is the prime need to connect with customers, who are eventually responsible for making or breaking the brands.

The Nokia may be relegated to the annals of history, or it may rise again if HMD Global decides to work for the return of this iconic brand’s past glory.

Whatever happens, it is for sure that Nokia, once the way of life, has blundered seriously on many counts. It’s for other brands to learn the lessons and protect their turf from the likes of Apples and Samsungs.

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Hardeep is an entrepreneur, marketer, blogger, an ardent reader and avid writer. He expresses his unbiased views especially on the matters of Business, Tech & Life through this blog. He can be reached at


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