Microsoft shows how to flush decades of Nokia goodwill away

A company whose brand is known for great design and ruggedness has just been scratched off any upcoming Lumia phones. As part of Microsoft's deal for Nokia's devices and services division, the Redmond giant has picked up the Lumia brand, but Nokia as an entity and brand will continue to focus on its "advanced technologies".

Ask folks about their feelings toward Nokia, and they will be of praise and nostalgia. For many people, Nokia was one of the first mobile phones that they owned, and although they were sometimes a little quirky, they had a well-earned reputation for being indestructible, having an amazing battery life, and being very good at what they did.

They may have been merely feature phones, but the Nokia brand has the sort of goodwill that few mobile brands are able to engender. BlackBerry/RIM used to have it, Apple has had it ever since it entered the market, and Nokia possessed it.

One company that doesn't have it is Nokia's suitor: Microsoft.

Remember the short-lived Microsoft Kin?

What about Microsoft's courier tablet concept?

Perhaps you had yourself a Zune?

Or, in the past year, you may have acquired an underpowered tablet called the Surface RT.

For every Xbox that Microsoft has in its portfolio in recent history, there's a Kin or a Surface RT lurking on the next page.

Global coverage: Nokia Interim CEO: Microsoft deal makes us stronger | Even with Nokia devices, Microsoft wants to license Windows Phone to other makers | Does its Nokia buy thwart or fuel a possible Microsoft break-up? | Microsoft shows how to flush decades of Nokia goodwill away | Microsoft gets less than $10 per Windows Phone unit | Microsoft-Nokia deal: Reaction from the Twitter trenches | Elop drops Nokia CEO role to lead devices team under Microsoft deal | Microsoft-Nokia deal: 11 quick facts | Microsoft to buy Nokia's devices, services unit for $7.2B

As a mobile device manufacturer, Microsoft cannot afford to continue its habit of dropping the ball that often, as consumers will begin to avoid manufacturers that have burned them in the past. Now that it is entrenched in third place, Microsoft needs to maintain its momentum and keep its figurative foot on the gas.

Whereas a Nokia phone was always going to have great build quality, and lately arrive with a stonking good camera, Microsoft has no such history in mobile devices. The Lumia brand should help Redmond with its perception problems in the short term, but the larger question is what happens when certain aspects of Microsoft's corporate culture start to sink in?

Make no mistake, Nokia has been in trouble for a long time. From the day that Stephen Elop arrived as CEO of the company from Redmond, the question has always been when Microsoft would finish the job and deliver the coup de grace.

It was hardly a surprise that Elop decided to tie Nokia to his former employer by turning the Finnish device maker into a Windows Phone shop, but it was the wrong choice.

Nokia has spent the intervening years trying to regain its groove, and while recent data shows that Windows Phone purchases are on the rise, Nokia's burning platform has been largely reduced to a couple of ashen supports barely above water level.

At the time that Elop was busy cutting all non-Windows, non-Symbian development, a little handset arrived in the Asia-Pacific that showed there was something in Nokia's strategy pre-Elop.

That device was the dead-on-arrival N9, and for a Nokia phone of the time, the fact that it could deliver a "decent" experience was high praise indeed.

Some canny internet folk ran the numbers and said that the N9 was outselling Lumias despite the N9 not being available in many markets around the world. Whether the projected numbers were right or wrong, the fact that such a discussion could be had showed the self-inflicted pain that Nokia was delivering upon itself.

Being a MeeGo device, the N9 was Linux based, and hence much closer to an Android device than a Windows Phone.

We will never know what a properly supported Nokia Android device would have been like — but I suspect that it would have been an absolute stunner. Nokia build quality married to the world's most popular mobile operating system and running Nokia's suite of extended services and apps.

Samsung should be thanking its lucky stars that Elop steered Nokia in the direction he did. Instead of Nokia remaining a mobile juggernaut, the Finnish company has seen its market cap more than halve, and its market share has collapsed to single digits in many countries.

Now that the part of Nokia that it was most famous for, its hardware quality, is in the hands of Microsoft, the final husk of Nokia in the mobile realm will be as branding on Asha phones.

"Microsoft will acquire the Asha brand, and will license the Nokia brand for use with current Nokia mobile phone products," Microsoft said in its announcement of the deal.

"Nokia will continue to own and manage the Nokia brand. This element provides Microsoft with the opportunity to extend its service offerings to a far wider group around the world, while allowing Nokia's mobile phones to serve as an on-ramp to Windows Phone."

Poor Nokia: From undisputed mobile king to on-ramp in the space of half a decade.

The world is poorer for the removal of Nokia from the mobile ecosystem — but one could argue that Nokia removed itself when it hitched a ride on the exclusively Windows Phone train.

Today, Microsoft completed its transmogrification into a device and service company, but in the process, it has removed from its device that five-letter word in Nokia Sans that made it so special.

Such is the price for a future fully hardware and software integrated experience with Windows Phone. For Microsoft's sake, it had better be worth the sacrifice.