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2/9/2011
02:54 PM
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Nokia CEO Laments Company's 'Burning Platform'

The Finnish phone maker is set to reveal a new strategy on Friday.

Stephen Elop, Nokia's new CEO and former Microsoft executive, has penned an internal memo warning that the mobile phone company is in crisis.

Likening Nokia's situation to that of a man standing on burning North Sea oil drilling platform, Elop is preparing his company for a metaphorical jump into icy waters.

"I have learned that we are standing on a burning platform," the memo says. "...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. Nokia, our platform is burning."

Nokia did not immediately respond to a request to confirm the memo's authenticity, but other news sites including the BBC and Engadget, which first published the memo, claim to have confirmation that Elop's missive is genuine.

The memo details Nokia's failings, how it has been losing market share to Apple's iOS devices, to Google's Android devices, and to Chinese phone makers on the low-end. Credit rating agencies, the memo says, are reviewing Nokia's financials with an eye toward reducing the company's credit rating. And consumers are losing interest in the Nokia brand.

Research firm Gartner on Wednesday noted the decline in Nokia's mobile phone sales, which reached 461.3 million units in 2010, down 7.5% from 2009.

Elop suggests a dramatic response is forthcoming. The company is hosting a Strategy and Financial Briefing in London on Friday, and the speculation is that Nokia will announce a partnership with Microsoft and climb on board the Windows Phone 7 platform.

Gartner suggests that Nokia's fate hangs in the balance. "Nokia's future rests on the announcements it will make on February 11 and how well the company can execute on those plans in the limited time available," the firm said.

The possibility of a move to the Windows Phone 7 platform appears more likely with a report from Reuters that Nokia has canceled development of its first smartphone using the MeeGo mobile operating system. MeeGo was launched in February, 2010, by Nokia and Intel, partly in response to lack of support for Intel's Atom chips in Windows 7 and partly to provide Nokia with a modern smartphone operating system. While Nokia's decision to abandon its first MeeGo smart phone may not signal the immediate cessation of support for the newborn operating system, it certainly clouds MeeGo's future.

A recently published survey of 2,235 developers from Appcelerator, a maker of mobile development software, and research firm IDC, suggests why MeeGo might have to go: only 6% of developers expressed interest in creating software for MeeGo devices, compared to 92% for the iPhone, 87% for Android phones, 38% for BlackBerry, and 36% for Windows Phone 7.

A particularly noteworthy data point from this survey is that interest in Windows Phone 7 was up eight percentage points from the previous quarter, when a similar survey was published. Laggard though it may be in the mobile space, Microsoft still has clout with developers, thanks to its desktop presence and strong developer tools. Nokia could do worse than than to cast its lot in with Microsoft and Elop is just the man to make that happen.

But Google VP Vic Gundotra thinks Nokia could do better. With one acerbic tweet, he dismissed the rumored Nokia- Microsoft partnership: "Two turkeys do not make an Eagle."

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