A world without brands: a case study of mobile phone companies

I ventured into the wonderful world of mobile phones in 1998 when my mentor and friend helped me get a job interview with Motorola. It went great, and I was shortlisted for the final selection. Motorola was the shining star of the mobile world at that stage with its Star Trac flip phone, a runaway success that saw people would queue up for the beautifully crafted device; I did not get that job then, but looking back it still sends a chill down my spine thinking over the sharp rise and fall of those inspirational and aspirational “Mobile Brands” that happened within a decade. I ended up working for another great company, Siemens Mobile, but we were always a second tier brand in the market. The market leaders during the late 90’s were Ericsson, Nokia, and Motorola. Back then, the traits of a great device were:

1. Small Size (Ericsson was a master of this 2. craft) 3. Friendly Menu (Nokia) / Ericsson Mobiles 4. had the worst user experience 5. Common Charging Pin (Nokia) 6. Design (Nokia and Motorola) 7. Color Display Technology (Samsung) Those who were around the days of plenty would remember Sony, LG, Panasonic, Alcatel, Sharp, Siemens, Sagem, and BenQ to name a few. These brands were targeted towards certain markets and were considered second-tier brands. Somehow, some of these companies lost touch with consumers and had to merge in order to survive; Sony-Ericsson and BenQ-Siemens were a result of mergers. Others just disappeared altogether – Alcatel, Sagem, Panasonic and others shut down business. BenQ-Siemens couldn’t survive a year primarily due to the clash of Taiwanese and German cultures, and Sony ended up taking over the Sony-Ericsson venture. No one was really bothered about the fact that the first color display and slider phone was invented by Siemens, and the great R&D culture of the organization ended up spreading over the entire industry.

Motorola became a victim of its own success after the launch of its RAZR series of products During its peak in 2006, the company had a 29% global market share, breathing down Nokia’s neck (who then occupied 32%). Motorola lost this share in a mere 2 years, and ended up disappearing from the competitive arena altogether because they just couldn’t evolve their design beyond the RAZR form factor. A new phenomenon of standalone MP3 players started creeping into the market, and suddenly Apple made an appearance with the iPod. However, the MP3 player market was still a niche at the time, and people did not pay attention to it as a major game changer.

What happened to the mobile businesses?

Brands started disappearing and margins thinned out. Rather than twenty-five, there were just a handful of brands left to trade. Many companies went out of business while others diversified, and then something magical happened.