Will Nokia Brand Disappear By 2012?

The phone manufacturer that was the number one handset maker in the world until it was surpassed by Samsung in the second quarter of this year has been put on a list that predicts it will be gone by the end of 2012. Sony Ericsson also is on that list, and the only thing surprising about that is that it is still around to be included on any list.

24/7 Wall Street put out its annual list of 10 brands it expects to become extinct, and its track record is good enough that you can't just dismiss the list as someone's fanciful prediction. Last year's list included names like Blockbuster, T-Mobile, BP, Kia Motors, and Radio Shack. While it missed on some, it nailed a few others. Blockbuster is in the throes of bankruptcy, for example, and T-Mobile's brand threatens to disappear if the AT&T acquisition is approved.

This year, Nokia made the list. Nokia has been struggling in recent years. The iOS and Android platforms radically changed the smartphone landscape and Nokia's Symbian platform simply wasn't up to the task. There were also some false starts with Meego and Maemo. Rather than try to introduce another platform to the market, Nokia has decided to go with a partner that has deep pockets and experience in developing platforms and developer tools the market likes--Microsoft. The Windows Phone platform still has to prove itself, but the partnership with Nokia will put WP7 on millions of devices and in virtually every phone store in the world.

Some consider this a "jumping the shark" moment for Nokia, and that it is only prolonging Nokia's descent to irrelevancy. While I doubt that Nokia is going away anytime soon, it is ripe for an acquisition or merger, which would either alter or obliterate its brand. 24/7 Wall Street thinks HTC is a viable suitor and it would be a good fit. Both companies focus on innovative designs, have strong carrier relationships, and have a strong partnership with Microsoft.

I think the more interesting candidate though is Microsoft itself. Having stamped its logo on mice, keyboards, the Xbox, and Zune MP3 players, the software giant isn't afraid to sell hardware. Having a handset division would give Microsoft a number of advantages it currently doesn't have. Right now, it has to negotiate and work with handset makers on exactly what it is allowed to do versus what handset makers are allowed to do with respect to Windows Phone. If it makes its own phones, those negotiations would be nothing more than strategy sessions within its own teams.

It would also have an edge in selling to enterprise customers that have big contracts on the software side. I'm sure Microsoft would love to come up with some package deals that involve not only seat licenses, but phone hardware as well that is designed to work with Exchange, Sharepoint, and Office.

Sony Ericsson also made the list. Once a handset powerhouse, it is now dwarfed by companies like Samsung, LG, and HTC. The thinking is Sony would take over and remove Ericsson from the name. New devices would be marketed with VAIO and PS3 products. In my opinion, Sony is mistaken if it thinks its name has any sway with smartphone buyers. Its only chance would be to adopt Android and just make some fantastic hardware. The only issue for end users, though, is it would be just one more line of Android phones that would increase platform fragmentation. Sony is known for putting so much stuff on its VAIO computers there is no way it wouldn't also pour its thick syrupy Sony code all over the user interface.

For these two companies, I tend to think 24/7 Wall Street is right. Nokia will be acquired or merge in the next 18 months, and Sony Ericsson will just whither away. Time will tell.