Nokia CEO Stephen Elop outlines challenges in blazing hot memo

Fiery challenges from every side

Nokia CEO Stephen Elop outlines challenges in blazing hot memo
Two weeks ago, Finnish mobile giant Nokia reported declining operating profits in both Q4 2010 and for the full year, leading CEO Stephen Elop to declare the company “faces some significant challenges in our competitiveness and execution”.

The competition to which Elop refers have been starkly identified in an unusually blunt and revealing memo to his employees, obtained and published by Engadget.

In the leaked 1,300 word ‘Burning Platform’ communiqué, the Nokia head compares his under pressure organisation to a North Sea oilman, who must hurriedly choose between a blazing inferno on board or the freezing waters of the Atlantic.

Difficult decisions

Neither spot sounds particularly hospitable, which is, of course, the point: in this analogy, Nokia is in the midst of a firestorm.

According to the internal document, fireballs from Apple at the high-end, Android in the mid-range, and Chinese manufacturers on the low-end are threatening to consume Elop’s business.

“While competitors poured flames on our market share, what happened at Nokia? We fell behind, we missed big trends, and we lost time,” Elop explains. “At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.”

And while Nokia’s chief proceeds to pour scorn (and gasoline) on its own platforms - criticising the extended delay in MeeGo coming to market and the inertia stifling development on Symbian – the frankest admissions are reserved for his encircling rivals.

“The first iPhone shipped in 2007, and we still don't have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.”

Three choices

All is not quite lost yet, though. Nokia may stand on the proverbial precipice, but at least it’s identified the problem and the possible solution:

“Our competitors aren't taking our market share with devices; they are taking our market share with an entire ecosystem. This means we're going to have to decide how we either build, catalyse, or join an ecosystem.”

Could this mean Nokia is preparing to accept a fire extinguisher from Microsoft by adopting Windows Phone 7 as its future mobile OS, as speculated previously?

All will be revealed this Friday on Capital Markets Day, as the Scandinavian outfit shares its new strategy, described in the final sentence of the staff memo as “a bold and brave step into an uncertain future.”

[source: Engadget]

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