With handsets, it's all in a name

A market research firm claimed this week that handset vendors which employ creative naming strategies enjoy better success in the US market, going some way to explain Nokia’s weak North American presence.

According to Strategic Name Development, in the third quarter of 2005, Samsung, LG, and Nokia each held a 16 per cent share of the US market. Two of them, LG and Samsung, implemented similar creative phone naming strategies and their share increased to 20 per cent by the second quarter of 2008. Conversely, Nokia didn’t, and its share of the market dropped to 9 per cent during the same time period.

The researcher found that both Samsung and LG cell phone names are perceived as modern, creative, engaging, cool, original and easy to remember, whereas Nokia, which has resisted letting go of its alphanumeric naming nomenclature, performs very poorly in the US.

According to Strategic Name Development, while Nokia has, “half-heartedly introduced names preceded by a number, such as the 8600 Luna,” they are not resonating with consumers.

Interestingly, troubled US handset vendor Motorola is credited with kick starting the handset name game, way back in 1983 with the introduction of the futuristic-sounding DynaTAC. But while many subsequent Motorola phones had alphanumeric designations like V120e and E550, in 2004 Moto introduced the game changing RAZR. No one had ever seen a cell phone with this kind of name, which not only described its innovative, flat design, but evoked the clipped shorthand teens use when sending IM and SMS text messages. It was after the introduction of the RAZR that Motorola’s US market share began its climb toward its 2007 high of 35 per cent.

Most of Moto’s rivals did not miss the trick however, and the US firm’s market share eventually fell when LG and Samsung introduced phone names that were even more creative than Motorola’s 4LTR vowel-omitted names – Chocolate, Voyager and Vu.

By the second quarter of 2008, Motorola’s US share had declined a dramatic 14 points to 21 per cent, and while branching out with the Q showed potential for innovation, the KRZR was where Moto reached the point of too much of a good thing.

“Do people really want a crazed phone? Or think they are crazed for buying this phone?” said Strategic Name Development. “And “SCPL” was even worse. It stands for “scalpel,” if you’re still trying to guess. Maybe this is why Motorola never introduced it.”

But while Motorola’s once-innovative naming approach is today viewed unfavourably by the target market, the researcher argues that Nokia never really got it. By the second quarter of 2008 Nokia’s market share had dropped to just 9 per cent of the US market. “What’s wrong with Nokia’s names? Although Nokia apparently noticed the value of metaphor in choosing name components like “Sirocco” and “Arte,” the alphanumeric habit was too ingrained to overcome. Each of the names in these models is accompanied, and usually preceded, by a number, making the name seem like an afterthought,” said the researcher.

The company argues that names like Luna, Arte and Sirocco are too abstract and lack specificity, and while the recently launched Xpress Music hints at a particular lifestyle, Nokia appears to be reverting to its earlier pattern, with the forthcoming N97, which is intended to compete with the iPhone and the consumer-oriented BlackBerry phones, such as the Bold and the Storm.

With regards to the iPhone and BlackBerry, the research house had insufficient data to compare these relative newcomers with the rest of the market as handsets were not available during the time period of the study.