Former Microsoft Executive, current Nokia CEO,
and soon-to-be Microsoft Executive, Stephen
Elop, has been making a lot of news lately – and
most of it is not good news. When Elop arrived
at Nokia he brought his “Windows” mindset with
him and signed a two-year deal with Microsoft to
produce their Lumia smartphone line using only
the Windows Phone platform, rather than the
more popular Android OS. By committing Nokia
to what was basically only a niche operating
system, they were limited in sales potential from
the very beginning. The once pride of Finland,
Nokia, continued their downward spiral under
Elop’s direction and in May had come under fire
by Nokia’s shareholders demanding that Elop
“switch to another road.”
Steve Ballmer and Stephen Elop
The problem was that Elop’s allegiance was
always toward Micro$oft and he brought that
loyalty with him to his new found job as Nokia’s
CEO. By “destroying” Nokia from within, Elop
allowed his old company, Microsoft, to buy them
out for less money as Nokia’s value continued to
slide. Elop gets a nice fat bonus, a new executive
job with his old company, with a real shot at
becoming their next CEO when Steve Ballmer
retires in a few months, and Microsoft ends up
with Nokia – an earlier article we wrote describes
it as Microsoft planting their “trojan horse” in
Nokia.
This is as much about Nokia’s board not willing
to act and force Elop to do the right thing, and
even though the stock prices had fallen, the
company was worth much more than the $7.2
billion Microsoft paid for Nokia. Nokia even had
Android running on test devices, almost as if Elop
was humoring them, as late as January, he said,
“anything is possible” when it comes to Android
devices. The next month he pretty much took
Android out of the picture, claiming that it was an
already crowded market and Samsung was too
dominant a force – so instead he stuck with a
platform that was barely alive rather than jumping
into the popular Android field.
Next up on Elop’s plate was an impending divorce
and Nokia’s plea to take a smaller bonus with his
departure, but Elop told the board that he needed
the full $25 million to pay for his divorce because
he could not talk his wife into taking less money!
The hiring of Elop, the downward spiral of Nokia,
the selling of Nokia, Elop’s rehiring by his former
employer, and now the divorce and bonus scandal
is more than the Finnish media could handle and
they began to question Nokia.
Nokia finally entered the tablet world with the
new Nokia 2520, running Windows 8.1 RT and so
far it is garnering good reviews. They also came
out with their first phablet, the Nokia Lumia 1520,
with a 6-inch display to go up against the
Samsung Galaxy Note 3. But with all of this
going on as Microsoft gets set to swallow up
Nokia, Elop is now hinting that the Nokia name
may be dropped from use – what remains of the
Nokia company owns the rights to the name,
which Microsoft is able to use for ten years
according to their agreement. However,
according to The Telegraph, it was licensed to
use on their low-end Asha line of phones, sold
only to the developing countries. When they
asked Elop about Microsoft keeping the Nokia
name:
Speaking to the Telegraph in Abu Dhabi, Elop said
that a decision would have to be made as a
“combined company” about smartphone branding
once the transaction is complete, but that
“Lumia” was a possibility.What we have to decide
is what the brand will be. Because we have not
decided what brand will be dominant for
smartphones, that’s work that’s still ahead. And
of course the way we’ll go through that process
is to assess with consumers what they respond
most positively to, what conveys the best
message and the best hopes of
success. Microsoft as a company, of course, has
many brands: Xbox, Office, Surface and a variety
of others. We have brands like Lumia. So we’ll
need to decide what the next step is from a
branding perspective.
Spoken like a true “politician;” it sounds like
Microsoft will just swallow the Nokia name and
brand their phones, Lumia. It will be a sad ending
to a once proud and prosperous company, and
much like BlackBerry, their board and executives
refused to keep up with change in the
everchanging technical world of smartphones.
Once you react too slowly, you can find your
company being bought up by the competition, and
sometimes sold out by those within.
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