Nokia 1-0 down in the smartphone wars

Last week we got a masterclass in how not to launch a product from two of the biggest and worst performing brands on the planet.

There was a time when the idea of Nokia and Microsoft partnering to produce a line of smartphones with a new Windows operating platform would have caused ripples of excitement across the tech world and more than the odd monopolistic concern about market power. But that was before both brands found themselves under attack and rapidly overtaken by a phalanx of sleeker, stronger and smarter competitors like Apple, Samsung and Google.

In a stunning fall from grace, Nokia’s share of the handsets and Microsoft’s slice of the operating software for smartphones are each projected to reach only 3 per cent of the global market in 2013. And it is not hard to see why both brands have stumbled so badly, based on last week’s piss-poor launch.

To successfully launch a major product you have to make sure the launch event is a pure and perfect exposition of its positioning. There are all kinds of hurdles down the track of a launch, from inconsistent retailers to off-message media reviews, so the launch has to be prototypically on-brand. The positioning for the Lumia 920 is ambitious but clear. According to Nokia CEO Stephen Elop the 920 is the “world’s most innovative smartphone” offering “an alternative to the faceless black and grey monoblocs you see”.

So a brand built around innovation and alternative. Excellent. But given this positioning can I respectfully suggest that a launch event featuring Elop and Steve Ballmer, CEO of Microsoft, standing uncomfortably on stage together was not the way to go. There is nothing innovative about two old white blokes standing together behind a big screen trying to look casual. I don’t know if you saw the photos, but it looked like your Dad and Uncle Terry had had a few too many at the christening and decided to get up for an impromptu sing-a-long.

And if you are attempting to position your product as alternative, it might help if you don’t do precisely what your biggest rival has been doing much better than you for more than a decade. Yes, Steve Jobs did it, but he was a slim, enigmatic genius and the founder of the world’s biggest company. Elop and Ballmer not only failed to convey that they were launching an alternative to Apple, they actually made their crucial new product look like a second-rate, replicated version.

The launch event was not just inconsistent with the Lumia strategy, it was contradictory. Someone needs to tell these CEOs there is a difference between being the founder of a brand – like Bezos or Jobs – and being a nondescript executive temporarily in charge. That’s especially true when your performance in the big chair is so poor. Ballmer’s tenure has seen Microsoft lose half its market capitalisation since he took over from Bill Gates in 2000. Elop is even less impressive. Nokia shares now trade at a quarter of their pre-Elop price. I would not have even had these guys at the event, let alone on stage.

The other big problem is the specifics. I appreciate that this may be a bit technical for some of you junior marketers, but when you launch a product it’s best to actually launch it. Despite the fanfare and the big PR budget last week it was plain to everyone present that neither Microsoft nor Nokia were anywhere near ready to launch the phone. That was the only explanation for the fact that, although we were shown the new models, we were not informed about their prices, which networks would support them or, for that matter, when the bloody things were going to be available.

Nokia “did not do itself any favours” by not disclosing that information, said John Jackson, an analyst at CCS Insight. “That was a tactical mistake.”

No shit, John. Call me old-fashioned, but when you launch a product it’s usually best to have details like price, availability and retailers nailed down. Either Nokia and Microsoft just hosted the world’s first post-modern launch event – one in which no product is actually launched, just the media buzz – or both brands are now second-rate marketing companies operating beyond their capabilities in a desperate attempt to keep up with superior competitors.

I know which explanation I’m betting on. More importantly, I know where the financial markets are placing their money. Nokia’s share price plummeted by 13 per cent after the launch, its biggest single day loss since June. Way to go gentlemen – you managed to take a disastrous share price and drive it even further into the ground with the one event that could have suggested a rebirth.

“This is a milestone,” Ballmer told the world’s press at the event. I think he meant ‘millstone’.

It’s always darkest just before things go completely black. Microsoft lost even more ground to its rivals last week, while I’d bet Nokia won’t survive 2013.

Like I said, one hell of a launch.

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Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. Al King 16 Jul 2015

    This one demands an update: “In November 2014, Nokia began to license product designs and
    technologies to third-party manufacturers, to enable a continued presence for
    the Nokia brand in the consumer electronics hardware market.
    On April 15, 2015, Nokia announced that it would acquire the
    French telecommunications equipment company Alcatel-Lucent for €15.6 billion.
    On June 18, 2015, Nokia’s CEO Rajeev Suri revealed that the
    company plans to re-enter the mobile phone business in 2016.” Wikipedia

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