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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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By Johnmcl7 on 2/9/2011 9:32:24 PM , Rating: 2
I think the N900 is a superb device all round which is completely overlooked when people are criticising for not producing a high end phone or technology. It's an incredibly flexible phone which is also very stable, great call quality, advanced multi-tasking etc.

Nokia clearly let themselves down badly on the marketting particularly when you look at the N8, Apple had everyone 'amazed' at the Iphone's new larger camera sensor while the N8's camera is six times larger and even bigger that most compact cameras. Yet most people won't know this nor its impressive USB host capabilities as Nokia have done little to show these strengths off.


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