Nokia in crisis

Nokia’s chief executive Stephen
Elop warned in a leaked internal memo that the company is at a crisis point and
needs to embrace dramatic transformation, days before it plans to reveal its
turnaround strategy.

Elop said that the Finnish phone
maker must take drastic action in order to reverse its decline, outlining a
company beset on all sides by formidable competitors and lagging “years
behind” the competition.

Likening Nokia to a man standing on
a burning oil platform with “multiple points of scorching heat,” he
said that the company must leap into the icy waters of the unknown to escape
the fire.

Elop’s document is a frank and
vivid assessment of a company that missed opportunities and now finds its market
share and profits quickly eroded by Apple and Google, who have risen
in dominance in just a short few years.

“The first iPhone shipping was
in 2007, and we still don’t have a product that is close to that experience,”
Elop said.

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

He also noted that Nokia has failed
to create a compelling smartphone platform offering, and now must think beyond devices
themselves and recognize that consumers not only buy a handset, but an “ecosystem”
of ancillary apps, multimedia, communications and services.

Nokia’s strategy of pushing its
Symbian operating system, which has failed to find traction in the smartphone
market, has cost the company valuable time and resources.

His memo comes at a particularly
pivotal point, as Nokia is expected to address its turnaround strategy on
Friday in London, hoping to stem its plummeting profits and eroding market
share.

The company is believed to be on
the verge of a major executive shake-up, and is
also currently formulating a U.S. strategy to regain traction in a market it
has failed to find its footing in.

BIZstory

New CEO warns that the Finnish manufacturer is on a ‘burning platform’
Photo: File