Rumor Mill: Nokia CEO paints picture of 'burning platform' in memo

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Nokia (NYSE:NOK) CEO Stephen Elop depicts the company as "standing on a burning platform," beset on all sides by smartphone competitors, according to a leaked internal memo. Elop argues for a radical new way of approaching business--but doesn't provide specifics.

The memo paints a bleak picture for Nokia and makes it clear that Elop, a former Microsoft (NASDAQ:MSFT) executive who has been at the Nokia helm since September, intends to forge a new path. Reports have indicated Elop will announce at an investor conference in London Friday a shakeup of the company's executive team and a possible redirection of Nokia's smartphone strategy.

Elop compares Nokia to a man standing on a burning oil platform who has to jump into the frigid waters of the North Sea to save himself. In the blunt memo, which was obtained by the blog Engadget, Elop depicts Nokia as being attacked at the high end of the market by Apple (NASDAQ:AAPL), in the mid-range by smartphones running Google's (NASDAQ:GOOG) Android platform and at the low end of the market by Chinese companies like Huawei and ZTE, backed by MediaTek.

A Nokia spokeswoman declined to comment.

"While competitors poured flames on our market share, what happened at Nokia? We fell behind, we missed big trends, and we lost time," Elop wrote. "At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind. The first iPhone shipped in 2007, and we still don't have a product that is close to their experience. Android came on the scene just over two years ago, and this week they took our leadership position in smartphone volumes. Unbelievable."

In an indication that Nokia plans to make a sharp break in smartphones, Elop casts doubt on Nokia's MeeGo strategy. "We thought MeeGo would be a platform for winning high-end smartphones," he wrote. "However, at this rate, by the end of 2011, we might have only one MeeGo product in the market." He also noted Symbian is not working in North America and that its development has proven to be too slow to keep up with consumer demands. According to a report in Reuters, which also cited unnamed sources, Nokia has stopped development of its first MeeGo smartphone. 

In the memo, Elop echoes his comments form Nokia's fourth-quarter earnings conference call in which he said that the smartphone battle has become one of ecosystems, not devices. Part of the problem, Elop said, has been Nokia's own attitude.

"We poured gasoline on our own burning platform," he said. "I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven't been delivering innovation fast enough. We're not collaborating internally."

Elop did not give any clues as to what path Nokia will take, though speculation has centered on the possibility that it might choose to align itself with Microsoft's Windows Phone 7 or Google's Android. Elop, the first non-Finn to run Nokia, called on the company to "take a bold and brave step into an uncertain future."

For more:
- see this Engadget post
- see this Reuters article
- see this Business Insider article
- see this Dow Jones Newswires article (sub. req.)

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