Microsoft retains brand 'Nokia' to tap Rural and Emerging Markets

The CES 2015 is on in Las Vegas and the internet is filled up with new product announcements. Of the many announcements made, one which draws our attention is the launch of Nokia 215. Though Microsoft declared that it will kill brand Nokia, but it seems they now indent to ride on the brand equity of Nokia and sail their way through emerging and rural markets.

Nokia as a brand has been immensely popular in India with more than 80% of mobile market share at one point in time. However, which slow adoption to changing business environment - namely introduction of dual SIM feature phones and Android Smartphones, they have been struggling to keep the brand aspirational. With the retention of the brand even after announcing that it shall be killed ultimately makes us scratch out heads.

With every other company announcing bigger and better smartphones, Microsoft announced the Nokia 215 in the CES 2015 claiming it to be their most affordable Internet-ready entry-level phone yet. At $29 for 29 days on a single charge, it certainly lives up to its billing. According to Microsoft, the 215 offers a stand-by battery time of up to 29 days (in standby mode) after just one charging session-or 20 hours while in active use. It clearly indicates that this product has been designed to target the rural India or similar markets.This move of retaining Nokia as a sub-brand under Microsoft can prove to be a good move for the tech giant. It shall help them position their feature and smartphones separately under two lines- Nokia and Lumia.

This strategy seems bang on with the fact that Nokia loyals, unlike Lumia fanatics, have always been more inclined towards a hassle free plain communication experience from their devices. Though Microsoft has been witnessing gradual increase in their market share with their Lumia phones in the smartphone segment, it time to test their capability to retain their leadership with brand 'Nokia' in the feature phone category - a category which is shrinking every day.With Microsoft only permitted to use the Nokia brand for 18 months, following its acquisition of the handset-maker in 2013, its almost certain that Nokia mobile phones would soon be a thing of the past.

 

[Dhruv Bindhani]

The provided text analyzes Microsoft's decision to launch the Nokia 215 feature phone at CES 2015, despite previous intentions to discontinue the Nokia brand. The author posits that this move is a strategic attempt by Microsoft to leverage Nokia's residual brand equity, particularly in emerging and rural markets like India.

Nokia's historical dominance in the Indian mobile market, once boasting over 80% market share, is highlighted as the foundation for this strategy. However, its decline due to slow adaptation to dual SIM feature phones and Android smartphones is also acknowledged. The author expresses surprise at the brand's retention, given Microsoft's earlier declaration to phase it out.

The Nokia 215 is presented as Microsoft's "most affordable Internet-ready entry-level phone," with a remarkable 29-day standby battery life for $29, clearly signaling its target audience in rural areas. The article suggests this allows Microsoft to segment its offerings, with Nokia for feature phones and Lumia for smartphones.

This strategy is deemed "bang on" for Nokia loyalists who prioritize "hassle-free plain communication." While Lumia phones saw increasing market share in smartphones, the Nokia 215 launch represents Microsoft's effort to maintain leadership in the "shrinking" feature phone category.

A crucial point is the limited 18-month window Microsoft had to use the Nokia brand after its 2013 acquisition of the handset division. This implies that the Nokia 215, despite its strategic intent, was likely one of the last devices under that branding, and the Nokia mobile phone brand would soon "be a thing of the past."

Critique:

The analysis effectively captures the immediate implications of the Nokia 215 launch within the context of Microsoft's broader mobile strategy at the time (2015). The discussion of brand equity, market segmentation, and targeting rural areas is insightful.

However, the text, being a snapshot from 2015, naturally lacks the benefit of hindsight. The prediction that "Nokia mobile phones would soon be a thing of the past" was indeed largely true for a period under Microsoft. However, the Nokia brand later saw a revival under HMD Global, focusing on Android smartphones and classic feature phone re-releases, a development that occurred after this article's publication.

Despite being a past analysis, it accurately reflects the strategic thinking surrounding the Nokia brand at that specific juncture, highlighting the tension between Microsoft's acquisition strategy and the lingering power of the Nokia name in certain markets.