February 10, 2011

Nokia’s Company Head Making Radical Changes

Nokia's new company head Stephen Elop said on Wednesday that the world's top mobile phone maker is "standing on a burning platform" surrounded by a "blazing fire" of competition.

He said the company must now make radical changes.

"We too, are standing on a 'burning platform,' and we must decide how we are going to change our behavior," Elop said in a company memo.

Nokia was once the industry's top dog, with a 40 percent share of the mobile device market, but has recently fallen to 31 percent in the fourth quarter of 2010.

Elop is expected to unveil his plan on Friday during a strategy and financial briefing in London.

"When we share the new strategy on February 11, it will be a huge effort to transform our company," he said.

There has been a flurry of rumors on what to expect from the company, including a report that Elop plans to fire half of Nokia's management.

The Federation of Professional and Managerial Staff and the Union of Professional Engineers said they would be watching developments closely.

Analysts believe Elop must address on Friday where the company stands on the crucial issue of mobile phone operating platforms.

"What we have seen is that Android and Apple have been very effective in taking market share and the big leader, Nokia, has not been able to convince end users that Symbian is as good as Android or Apple's iOS," Magnus Rehle of Greenwich Consulting told AFP.

"This means we're going to have to decide how we either build, catalyze or join an ecosystem," Elop said, referring to the key competitors who have been eating away Nokia's market share.

Elop said in the memo that he did not doubt Nokia's "brilliant sources of innovation" but the problem was in bringing these innovations to the market.

"Symbian3 came one quarter late and we're still waiting for the first software updates even though the products have been on the markets for four months now," Nordea Bank analyst Sami Sarkamies told AFP.

"If you look from the outside, too little seems to come out of the company and it's coming out too slowly," Sarkamies added.


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