Microsoft and Nokia - a new dawn or an inevitable sunset?

The recent announcement of Microsoft acquiring Nokia’s devices business for £3.12bn did not generate anyway near the level of hype and coverage if it had happened 10 years ago.

Why? Well four years ago Nokia’s smartphone market share was 30%, now it’s 8%. Right now 90% of all mobiles work on Google’s Android and Apple’s iOS platforms, Microsoft’s windows share is 4%.

Although Microsoft also bought the right to licence Nokia patents and the Lumina phone brand. Nokia will continue to operate as a network and tech company and still owns the Nokia brand.

It’s that brand point which is the most interesting thing to me. From nowhere Apple launched a mobile phone and within a few years dominated the market. It was quickly joined by other manufacturers using Google’s Andriod system such as HTC and most notably Samsung.

These handsets sold not just because of the technology, as much as how they were marketed. Apple made the iPhone aspirational, desirable, you had to have one. Samsung has taken that mantle over, especially to the under 25 market who now view the iPhone as the phone owned by the older generation and so not cool. Even Blackberry had some status driven by its BBM messaging system and its use by celebrities. Nokia phones were just functional and that positioning does not sell in the millions.

Technologists would have you believe that you need the next phone because of all the cool things it will do. The reality is that phones became an accessory like a handbag or a watch. When they did, they moved from selling based on functionality to selling based on desire. Those companies with marketers who know how to create that emotion through marketing and brand messaging won. Those with no track record lost.

If you want proof that marketing is something all companies should take seriously it was noted that Samsung and Apple were estimated to have made £3.2bn profit on their mobile sales in the second quarter of this year alone. That just short of the total paid for Nokia, that’s a lesson in itself.

Tim Youngman is Director of Marketing for Archant