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(Left) Nokia CEO Stephen Elop, Microsoft CEO Steve Ballmer.  (Source: Wikipedia)
Company needs to act fast to avoid going down on "burning platform"

As anyone who's been following Nokia's descent knows, the Finnish mobile manufacturer is in trouble. Finally, executives at Nokia are admitting it and are making efforts -- a little late in the game, true -- to do something about it.

Yesterday, we reported Nokia CEO Stephen Elop's message to his employees in a memo: The company is "standing on a burning platform" and must change course. "Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable." he wrote.

Today's Nokia news suggests that the company might be acting on those strong statements. According to a Bloomberg Businessnews report, Nokia might be close to a software partnership with Microsoft. Elop, a former Microsoft executive himself, has met with Microsoft CEO Steve Ballmer to discuss the possibility of powering Nokia smartphones with Microsoft's Windows Phone 7 mobile software, an unidentified source said. Elop has also held talks with Google CEO Eric Schmidt, but those discussions are not likely to lead to a partnership with Android.

A possible deal -- rumors of which we reported on all the way back in December -- could be likened to a late-game Hail Mary pass, but it could benefit both companies. Nokia, the longtime leader in the worldwide mobile market, has been back and forth with its plans to unleash its new mobile OS, MeeGo. The new OS was supposed to replace Symbian -- until recently, the most widely used mobile OS in the world -- on all of its smartphone devices. But Elop pushed its launch back to 2011. And while Nokia is still the world's largest mobile phone vendor, it's market share dropped from 36.4 percent in 2009 to 28.9 percent last year.  

Microsoft, too, could benefit from a deal. Despite launching a revamped mobile OS with WP7, its stock has remained relatively flat. It moved 2 million licenses for WP7 in the last quarter of 2010 -- not enough to trigger a turnaround. But Nokia still claims 37.6 percent of smartphone sales, according to Gartner, potentially opening up the playing field for Microsoft.

One thing Nokia doesn't want to do is adopt the strategy of HTC, Samsung, and Motorola. That is, Nokia refuses to simply license Android from Google for its own devices -- a move a former Nokia exec once likened to "peeing your pants to stay warm". Rather, Nokia is aiming to forge a "strategic alliance" with a software company. 

"We need an attitudinal shift," Elop said last month, according to BusinessWeek. "We must improve the quality of our execution, accelerate the speed at which we execute, and enhance the effectiveness of our partnerships."

The changes Elop wants to implement could also mean additional changes to its executive leadership. The company's top executive losses have been well documented here on DailyTech and elsewhere, but a necessary "attitudinal shift" at Nokia may require additional shakeups. 

"Stephen Elop does realize what the problems are, but the question is whether there is a credible strategy and whether they can execute it without compromising their existing sales," Stuart O’Gorman, an investor at Henderson Global Investing Ltd., told BusinessWeek. "They’ve done the easy step that previous management didn’t take, which is realizing the problem. The harder steps are still to come."

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Drowning together
By Tony Swash on 2/10/2011 9:02:25 AM , Rating: -1
Drowning men don’t rescue other drowning men.

They just drown together.

RE: Drowning together
By Flunk on 2/10/2011 9:09:16 AM , Rating: 4
Don't underestimate creativity. They could go with Android. But then they'd be just like everyone else. A partnership with Microsoft could be really good. Nokia's hardware + WP7's fantastic interface is a pretty good combination. At least on paper.

RE: Drowning together
By SSDMaster on 2/10/11, Rating: -1
RE: Drowning together
By themaster08 on 2/10/2011 3:52:49 PM , Rating: 2
Messages rotate sideways.

Emails rotate sideways.

Web browser rotates sideways.

Images rotate sideways.

Calculator rotates sideways.

Games rotate sideways.

Third party apps rotate sideways.

Office documents rotate sideways

Maps rotate sideways.

Pathetic is the word for your comment.

RE: Drowning together
By bug77 on 2/10/2011 10:17:38 AM , Rating: 2
They could go with Android. But then they'd be just like everyone else.

Last I checked, it was WP7 that didn't allow UI skinning.
TBH, I think Nokia is large enough to pursue both platforms. You know, spreading the eggs in several baskets. Works fine for HTC.

RE: Drowning together
By mckinney on 2/10/2011 10:20:52 AM , Rating: 2
Nokia should have bought Palm. WebOs would have been great for them.

RE: Drowning together
By semo on 2/10/2011 9:21:07 AM , Rating: 2
Kind of true. They had a good thing going with Maemo (as a niche at least) but that turned into vapor ware as soon as they partnered up with Intel.

My impression of Intel is that they are always late to the game but they always manage to get away with it (SSDs, integrated memory controllers for their CPUs, 64-bit CPUs)... not sure if they'll catch up with decent SoCs

RE: Drowning together
By Hiawa23 on 2/10/2011 9:42:16 AM , Rating: 2
Microsoft to the rescue.....

MS as a company is far from drowning, so this might be good for both.

RE: Drowning together
By Tony Swash on 2/10/2011 9:51:31 AM , Rating: 1
MS as a company is far from drowning,

Microsoft is drowning in the mobile OS market.

RE: Drowning together
By Da W on 2/10/2011 10:13:36 AM , Rating: 2
Come back here and say the same thing next year.

RE: Drowning together
By themaster08 on 2/10/2011 3:54:18 PM , Rating: 2
Tony Swash is drowning in Kool Aid.

RE: Drowning together
By MeesterNid on 2/10/2011 9:50:53 AM , Rating: 2
So one company that's in trouble because it didn't innovate (Nokia) is partnering with another that's always playing catch up? I'll stick with Anroid thankyouverymuch.

RE: Drowning together
By superPC on 2/10/2011 11:31:08 AM , Rating: 2
we don't know a thing about this alliance. it could be that nokia plans to install full windows 7 OS in its next generation hardware that feature intel processor. that kind of phone with atrix like docks would be awesome, especially with nokia great build quality.

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