Microsoft: How to best leverage the Nokia deal

Microsoft will be a full-fledged hardware company when the ink dries on the Nokia device purchase. Here's how it can make the best of the acquisition.
Written by James Kendrick, Contributor
Windows Phone no Nokia

Microsoft is learning how to surprise the tech world like that fruity company. First there was the big announcement that the folks from Redmond would make their own line of tablets to compete with, well, their partners. Now comes the surprise unveiling of the purchase of Nokia's device business. That deal won't be consummated until early next year and Microsoft will need to hit the ground sprinting to make the big deal work. I have some suggestions how that might be done.

Own the brand

As a software licensor Microsoft has always had the luxury of leaving the crucial branding up to its partners. At the time of the acqusition Nokia accounts for over 80 percent of the market share in Windows Phone. That means that Microsoft basically owns almost the entire platform and brand with the purchase of Nokia's phone business.

Lumia 1020
Image credit: Nokia

What needs to be done is to leverage that fully right away. That means take over the brand of Windows Phone and lose the Lumia brand of Nokia. With Nokia basically being Microsoft, and Windows Phone firmly belonging to Microsoft, take over the brand completely. Make it clear that Nokia phones are now simply Windows Phones built by Microsoft.

This will be far better than the branding Nokia has been doing with its phones. Take a look at the Lumia 1020 in the image above. You only see a simple Nokia at the top and a Windows button at the bottom. Where's the clear Lumia branding or Windows Phone branding on the front of that phone? It's not there, a failure of branding.

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Nokia is rumored to be readying a Windows RT tablet for market and if that's the case use the existing Surface brand. You want to keep things simple in consumers' minds so stick with Surface. Tack whatever you want after Surface but keep the Surface brand for the entire tablet line.

Microsoft wants to be a devices and services company, so make it clear from day one that's the case. The shiny new Windows Phone is exactly that, and a product of Microsoft.

Drop Windows Phone licensing

The most important task for Elop is to make him accountable for the success of Windows Phone.

It flies in the face with long-time corporate culture but it's time to stop licensing Windows Phone to other companies. The partners haven't done Windows Phone, and thus Microsoft, any favors with the few handsets they've released running your software. You owe them no favors in return.

As part of owning the brand, meet quietly with partners currently licensing Windows Phone and make it clear you'll keep supporting existing products but that's it. They're likely not going to drop Android and go Windows Phone given the competition from Microsoft anyway, so formalize the shut-down.

Run a massive advertising blitz

Hand-in-hand with owning the brand is raising awareness with the buying public that Windows Phone, handsets formerly from Nokia, and Microsoft are now the newest smartphone game in town. This advertising blitz should be everywhere in the US and Europe at first.

Everywhere they look, prospective buyers should see flashy ads that build a compelling use case for Windows Phone. If they turn on the TV for a while, they should see at least one Windows Phone ad. If they read a newspaper or magazine, the ads should be right there.

This campaign is going to be expensive but it is absolutely mandatory to increase awareness of the new phones from Microsoft. Compared to the purchase price of the Nokia business the expense of the advertising will be tolerable.

The objective is to drive home that Windows Phone does the things people want to do and that it's from Microsoft.

Task Elop with a concise plan for Windows Phone

Make it clear starting now that the Nokia business is gone and it's all Microsoft going forward. This will be hard for the former Nokia staff but this is business. Take the single brand seriously and leave no doubt that everything will be Microsoft and Windows Phone from now on.

Give Elop clear instructions to integrate the acquired Nokia organization as quickly as possible. It's a given that many of the adopted 32,000 Nokia employees will overlap with Microsoft's organization so quickly cut as many as possible. There's no sense continuing the massive staff costs so cut it fast. Have Elop do that smartly and by integrating as many of the best employees as possible into the Microsoft devices management structure.

Nokia has produced several Lumia handsets of varying capabilities and prices. Change the philosophy that Elop obviously had in this regard and drop down to just two handsets. You only need one high-end Windows Phone with a great camera and top-notch hardware. The other should be a more entry-level model with cheap components and a cheap price to match. The scattergun approach of having lots of devices with different features and capabilities just confuses the buyer. Avoid this at all costs.

The most important task for Elop is to make him accountable for the success of Windows Phone. That may sound harsh but let's face it, Microsoft has invested at least $10 billion dollars in Nokia at this point, and largely with Elop. Give him aggressive growth targets and make him hit them. Support him to help him get there but make it happen.

Distance the brand from feature phones

Contrary to official statements about feature phones they do not promote the Windows Phone brand. Sales numbers make it impossible to get rid of feature phones but do not sully the smartphone line by including them. Keep the branding far removed from Microsoft and Windows Phone. Perhaps it makes sense to continue the Asha brand.

Don't kid yourselves, feature phones will not lead customers to upgrade to Windows Phone smartphones. That misguided view reminds me of the "marijuana use leads to hard drug abuse". Sure some progress that way but I suspect the vast majority don't. Keep the smartphone business separate and distanced from the feature phone stuff.

Offer package deals

Attracting new customers is never easy but one tried and true method is the package deal. Make a shiny new Windows Phone hard to pass up when a Surface tablet is purchased. That means a very special price for the phone just for buying a tablet.

To avoid the carrier hurdle the phone should be unlocked if possible and advertising should explain it's all about choice. Otherwise make deals with the big four carriers (in the US) to give the customer options. This will make it clear that Microsoft has the customer's back as they can take the Windows Phone to any carrier they wish. Also show how the Windows Phone can be used to get that new Surface tablet online almost anywhere (tethering), and how easy that is to do.

Simplistic view?

These suggestions may seem simple on the surface but it will be a big task to do them properly. It will take a massive, concerted effort of a solid team to make them work but that's what will be needed to take full advantage of the big Nokia purchase.

Microsoft, take these suggestions in the vein in which they're offered. I want to see Windows Phone take off and be the major player in the smartphone space it should be. Competition is good and you're the best shot we have for that.

Elop will be under the gun as he should be. He's been a firm ally of Microsoft to be sure, but he's not achieved any significant level of success. It's time to hold his feet to the fire and make Windows Phone a household brand.

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