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Nokia CEO Stephen Elop

"S**t just got real"
Nokia CEO Stephen Elop tells his troops that it's time to face the music

It appears that Nokia's CEO has come to the realization that many of us came to months, if not years ago: Nokia's smartphone efforts are in trouble. The company has been a bit lacking on the innovation front and has never quite made its way back into the hearts of the consumer -- especially in North America -- since the arrival of the iPhone in 2007.

Stephen Elop, a former Microsoft Business Division executive, took over Nokia's CEO position back in late September. It didn't take long for him to see the writing on the wall when it comes to Nokia's position in the market, and he fired off a memo (which was obtained by Engadget) to state the sad position that the company is in. In fact, Elop says that the Nokia is standing on a "burning platform" and that the company must decide what it wants to do to stay relevant.

Here are a few highlights from the 1,300+ word memo:

In 2008, Apple's market share in the $300+ price range was 25 percent; by 2010 it escalated to 61 percent. They are enjoying a tremendous growth trajectory with a 78 percent earnings growth year over year in Q4 2010. Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range… The first iPhone shipped in 2007, and we still don't have a product that is close to their experience. 

Love 'em or hate 'em, it's true that Apple really turned the smartphone market on its head. Apple knows how to create buzz for its products, and while the iPhone may not have the most dazzling array of hardware at any point in time compared to its competitors, the user experience (hardware + software ecosystem) is hard to fault.

Elop goes on to praise Google's Android platform which has taken a few short years to topple Nokia from the top of the worldwide sales charts:

Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable…

Android came in at the high-end, they are now winning the mid-range, and quickly they are going downstream to phones under €100. Google has become a gravitational force, drawing much of the industry's innovation to its core.

Elop continues in his memo talking about the company’s unhinged efforts with MeeGo, troubles with Symbian, and the fact that Chinese OEMs are able to crank out low-cost smartphones at a rapid pace. Basically, Nokia is being assaulted from all sides and isn't taking enough action to stay relevant. 

Nokia's CEO even goes so far as to say that the answer to Nokia's problems may be to adopt smartphone platform which has a strong ecosystem (Android, Windows Phone 7 perhaps?). Windows Phone 7 seems like a good choice given Elop's past ties to Microsoft, but we'll hear a little more about Nokia's plans for the future on February 11. 

You can read Stephen Elop’s full memo here.



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RE: ?
By kingius on 2/9/2011 8:57:36 AM , Rating: 2
I agree with you. Things can only seem 'cool' for so long; this is how fashion works. Wait for people to come out with insults about iPhone users and Apple will have problems ('oh that's so last season'). The rest of us can smile and shrug, let others waste their money on the latest shiney things.


RE: ?
By sxr7171 on 2/9/2011 9:43:12 AM , Rating: 1
It's not about "cool" anymore. Is Windows still "cool"? It's about software ecosystem.


RE: ?
By Samus on 2/9/2011 1:32:04 PM , Rating: 2
Own a Nokia N8. Best phone I've ever had, and I've had an iPhone. Having two lines, I also have a G2, but it's a play phone, and the N8 is a work phone.


RE: ?
By headbox on 2/10/2011 3:13:56 AM , Rating: 1
I got 2 refurbished iPhones (3GS) for $19 each. Cool AND Cheap. I have a nice DSLR so I don't care about the camera (which is still good) vs. the iPhone 4, and I don't look at the screen and feel "like omg this sucks I need a retina display!"

However what never fails to amuse me is the "waste your money on Apple" nonsense.

#1, many people make a lot more money than you, and $200+ for a phone or $1,200+ for a laptop isn't a "house payment." You only make people assume you're trailer trash when you reveal how little expendable income you have.

#2, the combined software + hardware experience, as noted by the Nokia CEO, is what sells Apple, not "gimmicks" as you would love to believe. People are happy with OS X, iOS, etc. We live in an age where all computers sold can handle the needs of consumers, so people want a better user experience, not just hardware specs. They want easy home video, photo editing, music mixing, and casual gaming. I'm sorry that makes you angry.

#3. Apple products have RESALE VALUE . Yes, they cost more initially, but in a few years you will still be able to sell it for a decent price, and there will be DEMAND for it. Have a 2008 MacBook Pro that cost $1,800 and put it on craigslist for $1,300 and 10 people will call you that same day. Have a Dell Studio 17 for $200 and you'll still have it in a month. Same with iPods, iMacs, etc.

#4 brand hate & brand loyalty are silly. Being a die-hard anti-Apple boy is no different than posing at Starbux with your iPad. Both are the attitudes of phags.


"This week I got an iPhone. This weekend I got four chargers so I can keep it charged everywhere I go and a land line so I can actually make phone calls." -- Facebook CEO Mark Zuckerberg














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