Every year business news and analysis website 24/7 Wall St. Publishes a list of 10 brands they think won’t be around in a year’s time. Last year there were spot on with some brands in the technology and entertainment spaces with T-Mobile (subsumed by AT&T) and Blockbuster (RIP).
This year’s list features companies that, only a year ago, would have been considered safe bets. Be it a case of current events or an inexorable decline, the latter half of 2011 will be make or break for some household names.
Some of those named in the list will more than likely stutter through to 2013 – they’re simply too well-backed to fail. That’s not to say some big names won’t be ripe for acquisition and repackaging, and the 24/7 Wall St. forecast asks some interesting questions, about how big companies are wrangling their way back to profitability, with predictably disastrous results.
Nokia
Top of the list, unfairly, is Nokia. Bashing the Finnish mobile phone company has become a safe tactic following the rebranding of the Ovi store and the failure of the N9. Former Microsoft executive Stephen Elop has presided over a wholesale boardroom clearout, and an alarming memo from himself to staff likening the company to an “oil rig on fire”. Also on the way out are 4,000 jobs; the Symbian operating system (brought back in-house after a brief period as an open source project); and involvement in MeeGo, the mobile operating system developed in association with Intel. Last week’s launch of the N9, Nokia’s first – likely only – MeeGo handset showed what might have been, but the Asia-only device will be seen as only a footnote in the company’s history. At the same time as N9 videos were appearing on YouTube, pictures of a similar Nokia-branded handset running Windows Phone 7 appeared – consider this the real shape of things to come.
All of the above points to a company struggling to get a grip on the smartphone space, a space that has passed it by completely as usability came to trump hardware specification. Nokia devices have always been technically excellent, but users are simply done with Symbian. The decision to adopt Windows Phone 7 on all Nokia smartphones from next year is audacious, and it might just work, or at least stop the rot.
Will Nokia be around this time next year? Of course. But it will be low-end handsets, not smartphones that will keep it afloat. Boutique brand status a la HTC does not beckon.
MySpace
A more obvious casualty is MySpace. The once-dominant social network has failed to match Facebook in any department since its takeover by News Corp. Its attempted metamorphosis from social network to content curation service hasn’t worked. Between January and February alone the network lost 14.4% of its base, bringing it to a lean 63 million users – a year-on-year decrease of 43.2%. News Corp is looking for a quick sale and its only hope is that it will do better than AOL did with Bebo, which it bought for $850 million and sold for less than $10 million last year.
Will MySpace be around next year? If Facebook goes public you can expect the shutters to go down.
Sony
Japanese electronics behemoth Sony gets two mentions on the 24/7 list. A combination of the Japan Earthquake, attacks by hackers, struggling Blu-ray sales in the wake of online rental services like Netflix, and its virtual absence from the mobile space have all taken their toll. Last year it posted a loss of $3.1 billion. Something has to give.
Under scrutiny on the list are entertainment division Sony Entertainment and mobile phone brand Sony Ericsson.
The important thing to recognise is that these are arms of the same company and can be ‘brought home’ or asset-stripped as required. As such, Sony Pictures could well be sold off owing to a lack of tentpole titles (Spider-Man being it’s only real franchise). It’s conceivable that Sony BMG could also be sold off to another of the ‘Big Five’ record labels.
Pulling back from content to focus on devices could be a good move, but that will require an overhaul of Sony Ericsson. Following a bad spell in the smartphone arena with the Satio and Aino, the move to Android is a sound move. The Xperia line is keeping up, even if it isn’t cool as, say, Samsung (ouch), and the Xperia Play has some appeal to gamers. Overall sales, however, have plummeted and HTC has surpassed the Sony Ericsson brand as a whole.
Will Sony do the decent thing by these brands? Any brand retirement will be treated as a restructuring and consumers are unlikely to feel the effects beyond the cosmetic level. The earthquake should be enough to provide a grace period before any big decisions are made. Give it until after supply chains stabilise, sometime in 2012.
All of the above is conjecture. Let’s not forget there are a few noticeable absentees on that list as well. Some observers would say RIM is on its last legs, for one – and that’s before we get into Internet bubble territory. Still, as a piece of mischief making 24/7 Wall St. has done its job.
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