Now that Microsoft's (NASDAQ:MSFT) $7.5 billion deal to buy Nokia's (NYSE:NOK) devices and services business has officially closed, Microsoft is starting to reveal some changes that are coming. One, according to Microsoft executive Stephen Elop, is that Microsoft does not plan on using the Nokia brand for much longer for Nokia's smartphones.
As part of the deal, Microsoft has the right to license the Nokia brand for feature phones. However, Elop indicated that Nokia Windows Phones smartphones, which Nokia has been marketing under the Lumia brand, will not carry Nokia's distinctive branding much longer.
"Microsoft Mobile Oy is a legal construct that was created to facilitate the merger," Elop said on Nokia's website in a live question and answer session. "It is not a brand that will be seen by consumers. The Nokia brand is available to Microsoft to use for its mobile phones products for a period of time, but Nokia as a brand will not be used for long going forward for smartphones. Work is underway to select the go forward smartphone brand."
Elop is now executive vice president of Microsoft's Devices Group and reports to Microsoft CEO Satya Nadella. Elop, a Microsoft veteran, stepped down as Nokia CEO last fall and had been serving as head of Nokia's devices and services division. Nokia executives Jo Harlow, Juha Putkiranta, Timo Toikkanen and Chris Weber have also moved over to Microsoft, along with 25,000 other Nokia employees.
During the Q&A, Elop said Nokia's devices unit can now take innovation even further, but he did not provide many details. By combining with Microsoft, "we will each be able to innovate together in ways that we could not as separate companies. Lots of good things ahead."
Microsoft has said it will continue to support Nokia's Android-powered X Phone line of devices, likely because they use Microsoft services. The X phones are targeted at price points below low-end Lumia devices. Elop elaborated on that: "Microsoft acquired the mobile phones business, inclusive of Nokia X, to help connect the next billion people to Microsoft's services," he said. "Nokia X uses the MSFT cloud, not Google's. This is a great opportunity to connect new customers to Skype, outlook.com and Onedrive for the first time. We've already seen tens of thousands of new subscribers on MSFT services."
In other Windows Phone news, research firm Kantar Worldpanel ComTech found that the platform made up 8.1 percent of smartphone sales in the 12 weeks to the end of March across the top five European markets (the UK, France, Spain, Italy and Germany). In that time period and for those markets, Android made up 70.7 percent of sales and iOS made up 19.2 percent. "Windows had a tough start to the year as a result of its entry-level Nokia models facing fierce competition from low-end Motorola, LG and Samsung Android smartphones," Kantar noted.
Additionally, The Verge reported that one of the first new Windows Phone 8.1 devices Microsoft will release via Nokia will have a 5-megapixel front-facing camera to take better selfies. The report, citing unnamed sources, said the device (codenamed "Superman") will be a 4.7-inch, mid-range phone expected to debut toward the end of the year.
Microsoft has also put out its first advertisement for Nokia since the deal closed. The ad emphasizes Nokia's bright colors for its phone and uses The Kinks song "I'm Not Like Everybody Else" to play up Nokia's underdog image in the smartphone market. The emphasis seems to be on the notion that using Windows Phone will set consumers apart.
For more:
- see this Nokia post
- see this Marketing Week article
- see this Kantar post
- see this The Verge article
- see this BGR article
Related Articles:
Microsoft's CEO defends making Windows Phone free, hints at wearables
Microsoft makes Windows Phone free for OEMs
Microsoft introduces Cortana digital assistant in Windows Phone 8.1
Microsoft names Nokia's Elop as EVP of devices, amid executive changes ahead of Build conference