Nokia is accelerating and signalling a change in strategy by changing its logo for the first time in 60 years. Rebranding a business to reflect a shift in focus has long been a popular corporate strategy. Nokia has adopted a similar strategy.
Reset, accelerate, and scale
Chief Executive Pekka Lundmark announced a three-phase strategy when he assumed leadership of the Finnish corporation Nokia in 2020. The phases are reset, accelerate, and scale.
The word “Nokia” is formed by five distinct forms in the new logo, according to Reuters. The previous logo’s signature blue colour has been replaced with a variety of colours.
Nokia, a manufacturer of 5G equipment in Finland, updated its logo to distance itself from the mobile phone industry, which it stepped away from over 10 years ago.
Nokia is now a “business technology company,” according to CEO Lundmark, rather than merely a maker of smartphones.
On the eve of the annual Mobile World Congress (MWC), which started in Barcelona on Monday (February 27) and runs until 2 March, Lundmark not only unveiled the new logo but described how the company expects networks to change over the next seven years and how it plans to adapt to these changes.
He said in an interview, “We want to launch a new brand that is focusing very much on the networks and industrial digitalisation, which is a completely different thing from the legacy mobile phones,” as reported by Livemint.
Nokia-branded mobile devices are still available for purchase through HMD Global Oy. The name’s rights were purchased by HMD when Microsoft Corp., which bought the business in 2014, discontinued using it.
Shift in Strategy
Nokia still wants to expand its service provider business, which involves selling equipment to telecom providers, but it’s primary objective right now is to sell equipment to other firms.
“We had very good 21 per cent growth last year in enterprise, which is currently about eight per cent of our sales, (or) 2 billion euros ($2.11 billion) roughly,” Lundmark said. “We want to take that to double digits as quickly as possible,” as per a Reuters report.
The majority of their clients are in the manufacturing sector, thus major technology companies have started collaborating with telecom equipment manufacturers like Nokia to provide private 5G networks and equipment for automated factories to them.
By providing network equipment to wireless service providers, Lundmark stated that Nokia will concentrate on growing its market share in the company’s operations, as reported by Livemint.
He added by stating that Nokia now has “the ammunition and the tools,” to gain market share without compromising margins. This has been made possible by limits placed on Huawei Technologies Co., a Chinese rival, after some European governments forbade the business from supplying components for 5G networks, according to Livemint.
Nokia also plans on assessing the development of each of its companies and exploring alternatives, including divestment.
According to Telecoms, CEO Lundmark said, “We see the potential of digital to transform business, industry and society with an opportunity for significant gains in productivity, sustainability, and accessibility. Our market-leading critical networking technology is increasingly needed by customers and partners in every industry. We see a future where networks go beyond connecting people and things. They’re adaptable, autonomous and consumable. They are networks that sense, think and act, and they maximise the opportunity of digitalisation.”
“Today we share our updated company and technology strategy with a focus on unleashing the exponential potential of networks – pioneering a future where networks meet cloud. To signal this ambition, we are refreshing our brand to reflect who we are today – a B2B technology innovation leader. This is Nokia, but not as the world has seen us before,” he added.
“The signal is very clear. We only want to be in businesses where we can see global leadership,” he continued.
Competition in the market
Nokia’s foray towards data centers and factory automation would put them in competition with major IT giants like Microsoft and Amazon, as per a Reuters report.
Nokia made the decision not to follow its competitor Ericsson AB, which spent $6.2 billion to acquire Vonage Holdings Inc. due to a similar need to expand its business.
By recovering an investment-grade BBB- rating from S&P Global Ratings, Nokia has recently put an end to its more than ten-year fight in junk status. According to Livemint, Lundmark thinks there is still work to be done, especially in terms of the company’s operational margins.