Taking advantage of the Nokia 6 launch boom, let’s talk about brand licensing

After almost missing out on the entire mobile Internet era, Nokia, the veteran in the mobile phone industry, seems to have finally caught up with this train with great difficulty. On January 8, the official WeChat account of Nokia Mobile, which had been dormant for 4 years, sent out a Weibo post like this:

  Perhaps it was because it hadn't communicated with people for a long time, but after waking up, this Weibo account immediately became a chatterbox and seemed to be overdoing it. In just one week, it posted 30 messages related to this new Nokia phone. In addition to telling Nokia's die-hard fans how cheap and good this new phone was from all dimensions, it also pushed the sales channels and prices: only online sales were undertaken exclusively by JD.com, and the price of 1,699 yuan was basically the configuration of a mid-to-low-end machine sold at the price of a mid-to-high-end machine. From this point of view, it is indeed not cheap, and it can barely be considered a sentimental price.

Being talkative is actually a double-edged sword. When information is delivered frequently and intensively enough, it is also easy to attract criticism. Various people who are curious about the topic quickly took action and began to conduct a series of in-depth research around three core issues: the ownership of the Nokia brand, the background of HMD, and whether walnuts can be cracked.

Due to the lack of public information from HMD, the research was much more difficult. So far, there have been no particularly thorough analysis articles on the first two questions in the media. As for the last question, since the experimental materials are cheap and available in major supermarkets and e-commerce, it is quite popular. The reviewers of the technology media came up with a very consistent answer: Yes! It can not only crack walnuts, but also pecans, pistachios, abalones, almonds...

Here we should severely criticize the marketing departments of Three Squirrels, Bestore and Laiyifen. At the end of the year, every household should be stocking up on dried fruits. This is such a good opportunity for cross-border advertising placement cooperation, but you just missed it...

Is Nokia really back? I'm afraid the only brand that can "come back" is Nokia

We've gone a bit off topic, so let's get back to talking about Nokia and put the New Year's shopping aside for now.

Nokia's official Weibo account has a very strong ability to sensationalize, and it has made the nostalgic young and middle-aged people who used the Nokia 3210 from the era of brick-like feature phones burst into tears and say that they must buy it. But the problem is that Nokia has gone through a whole circle from Symabian to Microsoft Windows Phone to Google Android. Don't you think it's a bit strange?

In a previous official press release, such a detail caught our attention:

"HMD Global has also officially obtained a 10-year license for the Nokia brand and will exclusively produce Nokia Android phones and tablets."

This official statement has clearly expressed the current situation of the Nokia brand. For ease of understanding, let us translate it briefly: Nokia has exclusively authorized the use of Nokia's brand for mobile phones and tablets to another company called HMD global. This is a cooperation between the two companies (Nokia and HMD global).

After understanding this sentence, the truth of the matter becomes clear: Although HMD officials are trying hard to exaggerate the close ties between themselves and the well-known communications giant Nokia, in an effort to make the public believe that HMD has the pure blue blood of Nokia flowing in its veins, the word "authorization" has clearly stated that the relationship between the two companies is a "cooperative" one. At the same time, it is these two words that convey a clear signal to the outside world: In Nokia's view, mobile phone production and sales are already an oversaturated and mature market, and it is time to divest and look for the next industry with huge profit margins.

So, why did Nokia finally decide to give up the mobile phone manufacturing market?

From the world's macroeconomic conditions to the current state of the manufacturing industry to corporate strategic planning and other aspects, it can ultimately be summed up in four words: transformation failure.

It can be said that Nokia was not without vision, but it encountered resistance that it could not resist during the transformation and was ultimately forced to choose to withdraw.

First of all, the lowering of manufacturing thresholds and the gradual reduction in profits from mobile phone manufacturing and sales are the main reasons why Nokia and other companies are considering transformation.

Several established manufacturers have a clear consensus on this point: in order to reduce manufacturing costs as much as possible and seize the market, entering the third world, especially Asian countries such as China, for production is the only way. Therefore, Nokia and Beijing Shouxin, Ericsson and Nanjing Panda respectively established joint ventures to carry out localized production.

However, while localization contributes to reducing costs and expanding markets, it also brings about the side effect of exporting technology, which directly leads to the disappearance of technological barriers. From then on, mobile phones are no longer high-tech products, and can even be simply produced in a modular and OEM manner. This market situation has greatly reduced the profit margins that companies can obtain from the sales system.

Secondly, with the rapid growth and maturity of the market, Nokia's own technical characteristics and quality standards no longer have core competitiveness.

As a company that has been engaged in manufacturing for a long time, Nokia has formulated strict quality standards through long-term operations. Early Nokia mobile phones gained a good reputation for being "not afraid of drops" thanks to strict design specifications and production requirements (they can still be consumed today). However, as major manufacturers paid more attention to drop tests, the overall level of the entire industry has improved quickly. What is more important is the other aspect: mobile phones have gradually transformed from luxury goods to fast-moving consumer goods. Up to now, the average replacement cycle of mobile phones in mainland China has been close to 11 months, which means that the phone has been replaced before the warranty period expires. Therefore, the marginal benefits of continuing to invest in quality costs are getting smaller and smaller.

Last but not least, Nokia’s attempt to build an Internet service ecosystem for smartphones was not successful. Although it tried again and again, it ultimately failed.

When discussing mobile Internet, we often encounter some "Apple fans" who claim to be loyal followers of Steve Jobs and become almost incontinent with excitement when talking about Apple's great innovation in the mobile Internet service ecosystem. But please note that the Apple company has at most "redefined the smartphone" rather than "created the smartphone."

If we talk about the creator of smartphones and their ecosystem, it must be Nokia: from the initial trial of small programs based on Java and no larger than 64K in Symbian 40 to the glory of the Symbian 60V2 and V3 ecosystems, Symbian can be said to have single-handedly nurtured the domestic mobile game and security industries. Many well-known game developers and network security companies basically obtained the first batch of valuable users from Nokia 7610 and E71...

As for Internet services, Nokia, which has a strong foresight, has not ignored this battlefield. It has been paving the way in the music field since 2005, launching the XpressMusic brand, which laid the foundation for Nokia MixRadio in the future; the subsequent Ovi Maps became the predecessor of Here Maps, which is now snapped up by the three major German automakers - BBA (Mercedes-Benz, BMW and Audi).

Unfortunately, the business world has always followed the theory that winners take all. Now that Apple has become popular all over the world, who would care about Nokia's pioneering contribution to the smartphone industry? After all, the one who laughs last laughs best.

For European and American mobile phone brand manufacturers such as Nokia, the decline of this industry does not mean the end of the world. What is more important is how to enter a new lucrative blue ocean (such as the communications equipment field) as soon as possible. Therefore, choosing to exit may not be a bad option. After all, when resources are not particularly sufficient, it is very important to be able to stop losses quickly.

From the perspective of corporate management, products, brands and even markets have their own life cycles, and each period of start-up, growth, maturity and decline requires precise management in order to achieve maximum commercial value. Nokia, as a century-old company with real value established in 1865, is naturally well aware of this. This is also the fundamental reason why it was able to transform from the papermaking industry that Finland was proud of in history to a display device manufacturer and then accurately positioned itself in the communications field and has remained standing to this day.

In fact, it is not just Nokia. Many old European and American companies have become very skilled in life cycle management. They often start planning how to exit a product or industry in a smooth manner when the product or industry is still at its peak. In the communications field, two international companies that are as famous as Nokia are quite experienced in exiting the mobile phone manufacturing field: Ericsson and Siemens.

Before we formally analyze the strategies of Ericsson and Siemens, there is a joke worth telling to liven up the atmosphere:

In the eyes of Beijing’s mobile phone practitioners, the feng shui of Wangjing is completely inconsistent with the unattainable housing prices. Someone once described Wangjing as the graveyard of mobile phone industry giants. From the perspective of geographical location, this statement is harsh but true:

Just on a small bend of two kilometers from Wangjing North Road to Wangjing East Road, three communication giants, Ericsson, Motorola and Nokia, are gathered. If you walk a few kilometers southwest, you will reach the Siemens Building in Huajiadi. They are big enough to play mahjong, but they have one thing in common: they have all withdrawn from the mobile phone manufacturing industry.

If we consider that Lenovo Mobile also had its office nearby from 2012 to 2015 and the current status of Lenovo mobile phones, I believe many people would like to know how Wangjing can be such a place with so many outstanding people and beautiful scenery.

The more amazing thing is yet to come: in 2013, Lei Jun moved Xiaomi from Juanshi Tiandi in Wangjing to Wucaicheng in Qinghe, 20 kilometers away. I guess this is metaphysics...

Wait... I suddenly remembered that the Hammer phone company is located in the Greenland Center in Wangjing. This is really not a curse (a northern dialect that can be roughly understood as "curse"). Mr. Luo, I love you and Hammer. Please keep working hard#

Exiting is not scary. The most important thing is to find a reasonable time and way to exit. You can even make exiting a business.

Compared with Nokia, which was defeated by the double-wing attack from iPhone and Xiaomi, made a series of bad moves and was forced to withdraw from the mobile phone market, Siemens and Ericsson saw the huge challenges that the consumer electronics industry was about to face early on, and adopted various forms to divest related businesses.

Therefore, in addition to courage, timing is also very important in the matter of drastic measures. Starting to "take care of the aftermath" when the industry is still at its peak can allow the product to be sold at a good price to maximize commercial value. This is also a concentrated reflection of the company's strategic management capabilities.

Ericsson saw early on the huge challenges that the mobile phone industry would face in the future, so it began to divest while its business was still at its peak. It first established the joint venture Sony Ericsson with Sony as early as 2001, taking the first step towards exiting. It then sold all of its shares to Sony, eventually becoming a pure network technology provider, freeing itself from the constraints of the long and large business chain from supply chain to sales, and being able to better concentrate resources on technology research and development in the field of basic communication services (but I guess Ericsson didn't expect to encounter Huawei, its lifelong enemy, in the future).

As a typical representative of pillar imperialist state-owned enterprises, Siemens is also facing the problem of transformation. The routine of this game is far more complicated than that of Ericsson: starting from withdrawing from the mobile phone market in 2005, it sold the communication equipment brand Gigaset in 2011, sold the century-old lighting brand Osram in 2013, sold its home appliance business to its fellow countryman Bosch in 2014, and sold its hearing aid business to an investment group in 2015.

It took Siemens 10 years to divest all of its consumer electronics businesses, and they were all sold at a good price. It has to be said that this was a great victory for Siemens in its transformation process.

Currently, Siemens only has To B business left, and can finally focus on the vast markets with a value of hundreds of billions and huge profits, such as medical care, energy, transportation and urban intelligence.

Nokia and Siemens only turn exit into business, but Chinese companies are good at using other people's business to build their own business.

It is a well-known truth that top-quality goods are never discounted and must be sold at a good price. Although Siemens has a deep routine, it abides by the traditional business model of fair play based on German pride and universal business principles. But at this time, the Chinese appeared...

Do you remember the communication equipment brand Gigaset that was sold by Siemens? Gigaset was originally a digital cordless phone brand, but after changing its owner, it was packaged as a century-old mobile phone brand with "German origin". Not only did it shyly hint at its origin in the promotional materials, but it also spent a lot of money to become the 2015 sponsor of the German football giant Bayern Munich! You should know that as early as 2001, Siemens mobile phones really sponsored Bayern Munich. It can be said that they are sincere to the extent of using the brand...

But in fact, the company that is really operating the Gigaset brand behind the scenes is a company from Guangdong, China, named "Matsuri". Yes, that's right, it is the backstage sponsor of the Guangzhou Songri team in the Chinese Football League A-B at the end of the last century, which was "thank God and people" for Xu Genbao. It seems that the boss of Songri is really passionate about football.

But what is the result?

Just like BenQ-Siemens, which once won the Real Madrid chest advertisement, Gigaset, which spared no expense to hire Thomas Muller, Philipp Lahm and other Bayern Munich superstars to endorse its brand, still failed miserably: search for "Gigaset mobile phone" as a keyword on Taobao, and you will be surprised to find that the average sales of the top sellers are less than 100 after sorting by sales volume, which means that it is a miracle for the total sales volume of Taobao to exceed 1,000...

This result illustrates two issues very well: first, although football has become a hot topic for some reason, it is not advisable to blindly take advantage of the traffic; second, Bayern fans in mainland China are really not easy to fool...

Having said that, the reason why Gigaset didn't sell well is certainly not because Bayern fans are more cunning than monkeys. The real reason for the disastrous sales of Gigaset phones is the lack of cooperation from high-quality sales channels. This also shows from one side that the boss of Songri lacks basic understanding of both Chinese football and Chinese consumers. He naively believes that even in the most remote alleys, as long as the wine is good and has sentiment, it will sell well. The final result, of course, can only be that his ambitions are high but his fate is fragile.

Compared with the immature level of operation of the Gigaset brand by Matsushita, some large domestic 3C stores are quite sophisticated in this regard. Together with the original owners of these transferred brands, they have squeezed out the last drop of surplus value of these once famous trademarks.

Gome Electrical Appliances once won the brand usage rights of Sanyo, a long-established Japanese electrical appliance manufacturer, in the television sector. Please note that the "brand usage rights" here means that Gome Electrical Appliances can design, develop and sell Sanyo-branded televisions on its own. During the brand licensing period, Sanyo becomes Gome's own brand, and it can therefore invest and allocate marketing resources, making Sanyo televisions more advantageous than other brands in terms of booth location and sales price.

Of course, the most important thing is that with the help of Gome's offline store resources, Sanyo brand TVs can gain corresponding advantages in the supply chain and ultimately contribute higher gross profit to Gome. This is also the most fundamental reason why Gome chose to operate its own TV brand.

It can be said that for Gome, the operation of the Sanyo TV brand can be described as "shop in front and factory in the back, self-production and self-sales."

So, why did Gome choose Sanyo?

As a Japanese electrical appliance manufacturer with a high reputation in mainland China, Sanyo's brand value has been deeply rooted in the hearts of the people: for the generation of young people who grew up with the reform and opening up, the first Japanese product they came into contact with in their lives was probably a Sanyo cassette recorder.

Then, as the Sanyo brand continued to develop, its product line became increasingly large, spanning many categories such as televisions, refrigerators, washing machines, vacuum cleaners, and stereos. In particular, Sanyo televisions, together with Hitachi, Toshiba and other televisions, have accompanied a generation of Chinese people from youth to adulthood and then to marriage and childbirth. It is one of the traditional "three major items" in ordinary Chinese homes and a high-end brand of television.

However, with the rise of the mainland's television manufacturing industry, the traditional quality advantage of Japanese televisions has become less and less obvious. In addition, their price competitiveness has been declining. Except for Sony and Sharp, those TV brands that dominated the CRT (cathode ray tube) era have gradually withdrawn from the market. Sanyo has also announced that it will abandon its own TV business in the mainland and turn to external brand licensing.

It can be said that Sanyo's decision has fully understood the thinking of the Chinese people: for quite a long time, the relationship between China and Japan has been in a state of flux, sometimes "closely connected" and sometimes "going in the opposite direction", but Chinese consumers' enthusiasm for Japanese electrical brands has never cooled down, which has laid a solid foundation for Sanyo to authorize mainland manufacturers to use its brand.

The brand now has sales channels, and if the shortcomings in product design and manufacturing can be filled, the entire business chain will be perfect: So after careful consideration, Gome dragged Changhong, a traditional TV manufacturer, into the business, and made Changhong responsible for the design and manufacturing of Sanyo brand TVs. In this way, by leveraging Changhong's expertise in manufacturing, Gome gained brand awareness and high-quality, low-cost manufacturing capabilities, allowing Sanyo, a brand that was about to exit the stage of history, to continue to have value in the market through brand licensing.

Let’s get back to the topic of Nokia. Who actually took the dominant position in this “brand licensing” cooperation?

Now that we have learned about Gome’s brand licensing practices, let’s turn our attention back to Nokia.

Like the iron triangle combination of Gome, Sanyo and Changhong, the HMD, Foxconn and JD.com have also gathered the three key factors of brand, manufacturing and channels around the valuable value of the Nokia brand. What's more interesting is that Foxconn and JD.com seem to be more proactive in their interests in this cooperation than HMD.

Judging from the relevant parameters and design of the Nokia 6 mobile phone that has been released, there is not much that reflects the advantages of Nokia's technical patents in mobile phones. What HMD can provide more comes from Nokia's brand value.

Moreover, in terms of sales channels, HMD naturally cannot have the nationwide offline agency mechanism and strong channel management capabilities that Nokia had in the past. The only sales channel it has chosen is JD.com. Although this idea can temporarily avoid the same tragic end as Gigaset, it will have a significant impact on its future sales model.

JD.com is mainly responsible for contributing traffic in this cooperation, but it is unlikely to be a living Lei Feng. The core purpose of business operation is to pursue high gross profit. It can be seen that in the future, the value generated by the Nokia brand is more likely to go into whose pocket...

Just like JD.com is unlikely to be just an ordinary sales channel, Foxconn seems not content with the status of pure OEM, but actively participates in product design. According to rumors, HMD will release its second product after taking over the Nokia brand at the MWC conference in February - the flagship model P1 (currently tentatively named) will be developed based on the Sharp Aquos Xx3. Considering that the Sharp brand has been acquired by Foxconn, that is to say, Foxconn has been leading the overall R&D and design of Nokia's flagship mobile phones, then the next key question is: Since Foxconn is so strong, how much value does HMD's existing technology (if any) have?

With JD.com on its left and Foxconn on its right, can HMD Global, standing beside these two giants, really continue on its path as a Nordic technology company according to its own vision (if any)? I'm afraid no one hopes that in the end, the Nokia that once left us with a good impression will only have a logo left.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.