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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 10:53:26 AM , Rating: 2
I think you may be being too fair in your appraisal.

Advertising now leverages psychological studies to increase its effectiveness... and now we are in a recession and people are still buying luxury devices... its not hard to see that these two things are connected. That's one thing that nobody ever thought about with the free market; what if advertising has achieved its goal of overcoming the rational decision making process?

RE: ?
By MrBlastman on 2/9/2011 11:10:45 AM , Rating: 2
That _is_ the ultimate goal of advertising. Remember when back in the 50's and 60's they slipped subliminal advertising inbetween the frames in movie houses? They actually noticed an increase in concessions sales as a result (as that was the goal).

Being a sly fox, I tried this in an 8th grade computing project that I had programmed by slipping the text "Give us an A" between the frames of animation in the show and... guess what? It worked. :) Now, by my own conjecture alone I can not say that it was because of the apparent flashes on the screen that caused it. The project _was_ well done... and, being that it was a computing class, the teacher did have access to the source code. ;)

But yes, advertising ultimately wants to override the rational modus and lead us to a compulsive outlet instead as increasing revenues are what they are really seeking.

RE: ?
By Dr of crap on 2/9/2011 2:59:08 PM , Rating: 3
What IF - IT has!

It seems no one can come up a real thought process and not buy the crap that the marketers spit out of the TV or radio billboards.

No one can do the math on so called sales to see what they are getting or even think to do their 1040EZ forms for themsleves.

RE: ?
By The Raven on 2/10/2011 11:19:34 AM , Rating: 3
They don't need to deal with those complicated forms... President Obama is just gonna hand it out from his stash! ;-)

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