Microsoft Corp.'s website in India has an exhaustive list of news reports on the company's exploits. There is a story about the trend of standing at work that quotes Microsoft India's head of human resources. Several discuss Microsoft's efforts to expand its presence in cloud computing. Another one describes the company's efforts to encourage women to get into computer coding.
Nowhere on the list is there a reference to Microsoft's widely reported decision to delete Nokia from our memories. The company confirmed this week that "Microsoft" will replace "Nokia" on all future Lumina phones starting with the soon-to-be released 535 model, a mid-range device that will sell for about $140 (U.S).
In the parts of the world colonized by Apple and Samsung, the decision to jettison Nokia was met mostly with shrugs. But here in India, where the brand still is relevant, they noticed. Just a couple of weeks ago, the Economic Times published its list of the country's 100 most trusted brands. Nokia was No. 2 after Colgate. The only other mobile handset brand on the list was Samsung at No. 17. Microsoft failed to make an appearance.
The McKinsey Global Institute predicts India's middle class will increase by more than 10 times to 583 million people by 2025. Indians aged 15 to 25 – the demographic that will ride that wave – also said Nokia was their second-most-trusted brand after Maaza, a fruit drink made by Coca-Cola Co. Older Indians also ranked Nokia in their top 10, as did chief wage earners and married and unmarried Indians. Microsoft isn't killing Nokia. It is burying it alive.
Satya Nadella, Microsoft's chief executive officer and a native of Hyderabad, India, surely knows the brand strength Nokia has in his home country. It's possible Mr. Nadella had little choice. It paid more than $7-billion (U.S.) for Nokia's handset business, but the Redmond, Wash.-based company reportedly only secured a licence to use the Nokia name on smartphones until the end of next year. If that's the case, then Lumina was going to get a new identity eventually. Under those circumstances, one might as well get on with it. In global terms, Nokia has dropped off the map. What's to lose from erasing a name that already has disappeared?
But by ditching the Nokia name before it needed to, Microsoft appears to have embraced the notion that brands no longer matter. James Surowiecki, the New Yorker's business columnist, has been writing about this theme for years. He did so in February, apparently inspired by the fall from grace of Vancouver-based Lululemon Athletica. "Brands have never been more fragile," Mr. Surowiecki wrote. He is in a position to know. A decade earlier, Mr. Surowiecki observed that consumers no longer were marrying brands; instead, they had become serial monogamists, moving on as soon as a "sexier" option came along.
The basis of Mr. Surowiecki's analysis is the simple fact that we have all become our own market research firms. The spread of the Internet has made it simple to seek out the best products, obviating the need to blindly put faith in the latest product release from our most trusted brand. "Reassured by the opinions of others, consumers are less hesitant to try a lesser known brand like Roku," Itamar Simonson and Emanuel Rosen wrote in the Harvard Business Review earlier this year. (Roku Inc. makes video streaming devices. The Roku 3 has been reviewed by more than 9,500 people on Amazon.com and has a rating of 4.5 stars out of five.)
For new entrants, the Internet clearly has levelled the playing field to a great degree. It now is easier than ever to get the word out that your product or service is as good or better than that of the established market leaders. Consumers have choice. They don't need to suffer a disappointing new product from their favourite brand. They can read the reviews and switch.
But does that really mean brands are dead? Mr. Surowiecki's analysis led him to conclude that a brand's best asset – its ability to stand out in a crowded marketplace – is largely a myth. Rather than feeling overloaded by choice, consumers are quite willing and able to spend the time it takes on the Internet to get the best value for their money. In an increasingly no-logo world, it doesn't matter what the device is called, so long as the crowd likes it and posts favourable reviews online.
Maybe. But if that's true, and we've essentially known it for at least a decade, why do so many intelligent managers continue to spend so much money on enhancing their brands? The logical conclusion of the brands-don't-matter argument would see Volkswagen put its VW logo on its fleet of luxury and high-performance automobile brands. Bentley, Ducati, Porsche, and Lamborghini drivers wouldn't mind at all, so long as their machines remain top of the line, right?
One gets the impression that Microsoft is a little nervous about how consumers will react in markets where Nokia still matters. Someone asked on the newly named Microsoft Lumina India Facebook page when the new phone will be offered for sale in India. The company declined to give a date. When it does, marketing people should be watching because we will be witnessing a real-time test of how much brands matter.
Kevin Carmichael is a senior fellow at the Centre for International Governance Innovation.
Special to the Globe and Mail