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Two big brands crushed by apple

July 6, 2010

It’s been a long time since the very mention of Apple to clients generated the response of “niche player”. The company has become an 800lb gorilla and is crushing other corporate monoliths that step in its way. The biggest casualties over the past 10 years have been Sony and more recently, Nokia; giant corporations with huge levels of brand awareness that are currently suffering from a serious lack of dynamism.

Both organizations are seemingly desperate for creative thinking that can help re-energize their withering franchises.

Sony has a couple of bets placed in the key areas of 3-D TV and is targeting $11.3 billion in 3-D related sales by 2013. Sony basically controls this world from broadcast outwards. It’s morphing the now successful Playstation Network into a fully blown multi-media entity that goes way beyond its gaming roots. The company sees it as a way to sell everything from networked devices to content for the network. This will become even more of a challenge, since its arch rival Apple is now poised to enter the space.

The company’s music division is also struggling adapting to a changing world and is opening itself up to a host of new ideas. It recently signed a deal with American Idol’s Simon Cowell, recently helped some authors complete a sell-out stadium tour and is acting as a cultural consultant for one of Argentina’s provinces.

Nokia is just reeling from Apple’s onslaught and although the brand has huge levels of recognition and market share outside the US, it’s starting to see Apple and Google as a considerable threat to its business. The company has a new head of Mobile Solutions, who made his task very clear on a blog post.

“Yesterday was the first day in my new job. I’m fortunate to say that I
must have one of the most exciting jobs in the business. As head of
Mobile Solutions, it’s my aim to ensure Nokia stays as the market and
intellectual leader in creating the digital world. I’m under no
illusions; it’s no small task.

Over the coming months, we’ll be advancing current projects and
working to simplify the way we work in order to deliver products and
services faster, and with a laser focus on quality.

I am committed, perhaps even obsessed,
with getting Nokia back to being number one in high-end devices.
Achieving this will require performance and efforts over and above the
norm. This is a role I’ve personally been preparing for over the last 20
years. We have all the assets — including R&D and product
development – at our disposal under one roof – to produce killer
smartphones and market-changing mobile computers.”

These legacy companies are going to have a tough time turning their business around because of the pace of the forces that are against them.

Twenty years ago, it might have been an easier task to re-position and bring a corporate giant back from the brink, but today it’s that much tougher. The companies are so much bigger, so generating massive change inside an organization is almost impossible and then there’s the technological landscape that’s constantly shifting.

Both Sony and Nokia stood on the sidelines as their businesses shifted from hardware to software and were incapable of change because they lacked the core skills required. 

The only way these guys will survive is by creating open cultures that encourage more risk taking and experimentation. Having success in the outlying areas will shows insiders the possibilities and become infectious.

Product and service excellence will be mandatory and then there’s the small issue of brand. Both these brands are in the fashion business and have to recognize they need to re-inject the magic that surrounds their products; the products have to “wow” which makes marketing’s task that much easier, it just has to cleverly amplify the good news. In recent years, both brands have been guilty of over-promoting products that simply can’t live up to the hype.

One open opportunity for both brands is to engage their communities and outsiders more. With Apple operating a very closed and controlling culture, Sony and Nokia have a chance to do something very different.

Posted by Ed Cotton

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