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Can Elop give Nokia back its mojo?

Rory Cellan-Jones | 13:26 UK time, Friday, 10 September 2010

Well now we know how deep the crisis is at Nokia. For the first time in its history Nokia has gone outside Finland for its new Chief Executive. In a press conference at its headquarters just outside Helsinki this morning, the company unveiled Stephen Elop as the man who will guide it into a better future.

 

Putting a foreigner in charge of a company which is a huge source of pride to Finland is a radical step - a bit like making an Italian the manager of the England football team. And who knows whether it will prove any more successful.

Stephen Elop

Mr Elop's mission, to put it crudely, is to give Nokia back its mojo. The company is still the giant of the mobile handset world - but it knows that it has lost what you might call thought leadership. Whereas the industry once looked to Finland to see where phones were heading next, it's now more likely to look to Silicon Valley or Seoul.

So why on earth has Nokia chosen a man from Microsoft, which has continually failed to translate its desktop dominance to the mobile world? Well Stephen Elop has only been at Redmond for about eighteen months, and has an impressive track record in the web software world, having run Macromedia, the inventor of Flash. He was introduced by Nokia's chairman, who praised his "strong software background and his track record in change management."

But Mr Elop now has the unenviable task of trying to change a company whose culture successfully turned it from a wellington boots conglomerate into a global communications giant - and then went suddenly wrong.

That culture has reflected Nokia's Finnish homeland - quiet, understated, clever people getting on with the job without making much of a fuss. On a couple of occasions I have visited the company's headquarters, an airy wood and glass structure overlooking a lake, and come away impressed by the sense of purpose and the lack of a hierarchy. We happened across the then chief executive Jorm Ollila eating in the canteen, and he agreed to an interview then and there.

But the company seems to have failed in two areas - integrating its excellent hardware with the right software, and explaining to customers what it is about Nokia's products that should excite them. One of the first things the new boss will have to consider is whether he should end Nokia's reliance on the Symbian operating system and get into bed with Android, which is now powering many of the hottest new smartphones.

Stephen Elop made a good start at today's press conference in showing that he is a better communicator than many of his Finnish predecessors. The Canadian was also careful to try to build bridges with his new workforce and its homeland, going to almost embarrassing lengths to stress the links between Canada and Finland - they're both in the Arctic Circle and both love ice-hockey. Oh, and he's buying a house in Helsinki.

Nokia has huge strengths and its finances are still pretty sound. There is no reason why it should not be able to win back its reputation as the leader in mobile innovation. But Mr Elop will need to move rapidly - Nokia's rivals, from Apple to Microsoft, are not going to stand still while he sorts out his new home.

Comments

  • Comment number 1.

    Over the past few years Nokia (like Microsoft) have taken an iterative rather than innovative approach, which has allowed Apple and Google to build far superior mobile operating systems.

    The Finns still build reasonable hardware, if they switched to Android I think they could make some pretty compelling devices.

    Good luck to them.

  • Comment number 2.

    Nokia will never use android, it goes against everything Nokia is about. Symbian is still an excellent os, it may not look as flash as the other two but its more than capable to hold its own. Meego will be its next os but Symbian will still be about on its lower value phones. The thing Nokia have done wrong is their marketing. Apple are the kings of this, doesnt mean everything they do is good though? I'll be sticking with Nokia myself.

  • Comment number 3.

    Cant see how Nokia or Windows mobile can catch up now with Android & Apple now. They have to get developers to want to write software for them.

    Nokia switching to Android is probably the smartest move.

  • Comment number 4.

    Rory Cellan-Jones.

    "There is no reason why it should not be able to win back its reputation as the leader in mobile innovation."

    as a long-time user of Nokia products I would prefer them to continue to produce usable handsets even if they're not 'bleeding edge'; my advice (not that anyone listens :-)) to Mr Elop is: leave the me-too-app market to others, keep Nokia on the straight and narrow.

    "Oh, and he's buying a house in Helsinki."

    right, but who's paying??

  • Comment number 5.

    Nokia is like the Titanic. It struck an iceberg in the form of the iPhone three years ago.

    But with supreme arrogance, the engineers on the ship refused to believe they were in any danger. They did not change course. They stuck to business as usual. Nokia was unsinkable.

    Three years later, the compartments are flooded. She's going down by the head. 2011 will see Nokia making a loss. It's too late to change direction now.

    @carniphage

  • Comment number 6.

    Surely a switch to Android is the only reasonable option. There are many similarities between Nokia and Motorola and look what Android did for Moto.

    If they could make a decent high end "super phone" on Android then they surely have the brand and clout to make it work. They need to do something fast to get back in the smartphone game because thats where all the money is over the next 10 years.

  • Comment number 7.

    I don't think they necessarily need to switch wholesale to Android but it wouldn't harm them to dip their toe in the water with a couple of models using Android so they at least have the ability to switch completely.

    The main problem with them producing Android phones is that they're then going to be compared directly to other phones using the same OS and it becomes important for them to differentiate on hardware (either better specifiction or build quality and reliability) and/or whatever improvements they make to the Android interface.

    I've never used a Nokia smartphone (although I've always used Nokia handsets) but from what I gather they've always had problems with bugs in the hardware or software that take them a long time to sort out - by which time any buzz about their phone has been destroyed and people have gone elsewhere. If they can sort that out they may stand a chance.

    I think the most important thing for them for their smartphones is to look at the iPhone and Android OSes and understand what they do well, learn from it and implement that learning into their own smartphones. The worst thing they can do is stick their heads in the sand and pretend there's no problems.

    Oh, and if they could sort a decent browser for their non-smart phones (or just licence Opera Mini) it would be a decent step forward.

  • Comment number 8.

    There's no easy way to say this. Anyone who suggests that Nokia should use Android is an idiot. Sorry, but it's true.

    Nokia would effectively abandon any independence that it has in favour of becoming a vassal of Google and that's just not going to happen quite aside from the fact that Android currently isn't as good as Symbian, let alone MeeGo, unless you think having a power hungry hog that runs in VM and needs third party skins to make it acceptable is good.

    Also, Rory, I'll tell you who looks to California: tech journalists. What do businesses do? Well, Tesco (who are no mugs) bring out their grocery app on Symbian because they know there are more Nokias out there than iPhones - and certainly Android sets - and that Nokia's strategy is going to maintain that position for a very long time.

    There are too many articles and too many comments written by people who simply don't know what they're talking about. Try not to be one of those people, Rory.

    Still we'll all be here next year and the year after when you're scratching your head wondering why there are fewer iPhones out there and its share has flatlined at about 12% of the smartphone market, Android is second best and Nokia continue to rule the roost but with improved profits to boot.

    Anyone want to bet against me? Because if you do you better come with facts.

  • Comment number 9.

    Just a quick response to Mark_MWFC(comment 8). You make some interesting points, but if all is well in the Nokia universe, if the strategy is going to plan, why has the company replaced its chief executive? Why did the chairman Jorm Ollila say this morning "we were not quite happy with the implementation of the strategy"?And why has Mr Elop made it clear that he sees the need to change things?

  • Comment number 10.

    Rory, you misunderstand me - all was, and is not well in the Nokia universe. That's why Symbian has been rewritten (^3 is an interim, ^4 will be the low to mid tier platform) and MeeGo will be used for the high end. Furthermore OPK failed to crack the US market which he said he would (this is one of the biggest reasons why he's going, that and his failure to react quickly enough to the growth of the touchscreen market).

    OPK failed to act quickly enough however a lot of the corrective action has now been taken. What they do need is a convincing CEO who has good US contacts and a hell of a lot better marketing skills. That's who Elop is.

    Equally, Rory, I'm reading articles like yours and other publications which if you were to go by the taglines would suggest that Nokia are hemorrhaging marketshare and money when, in reality, market share has increased over the last four quarters compared to the iPhone remaining static or decreasing. Yes, they've been hammered at the high end but if the new handsets arrest that decline then ASP will go up and market share will remain static or increase.

    I should also point out that Nokia's handset division has made substantial profits every quarter for the last ten years. The ill fated NSN has, unfortunately, dragged the overall number down.

    Hardly anyone buys a high end Nokia today however almost half the world buy low or mid tier Nokias. It's not really difficult to draw the conclusion that if they maintain the low/mid tier and start taking back a portion of the high end it's going to be better is it?

  • Comment number 11.

    Some very good points Mark_MWFC #8

    But you missed one of the biggest reasons why Nokia will never allow itself to be sucked into the Android camp. Google. I wouldn't want a handset with Android, given the privacy track record of Google.

    Android is designed to "phone home" on a regular basis. Just like the iPhone does, and it's not just so Google and Apple can keep track of their sheep either.

  • Comment number 12.

    I wish Nokia didn't feel it has to make exciting products like everyone else - as far as I can tell that leads to devices that review well because they have lots of impressive features, but are hopeless when you try to live with them.

    I used to always buy Nokia phones because they were solid and reliable. I need my phone to be primarily an excellent communications device - these days that means good push email, calendar synchronisation, integration with social networks and just to deliver all of that well and without clutter.

    My new Nokia phone does a huge amount of stuff I don't need, some stuff that's nice to have (music player, camera, GPS etc.) and the stuff I NEED it to do, it does badly. I wish they could continue to differentiate themselves the way they always did - slightly less flashy than other phones, but people always went back to them in the end - they'd be tempted away by a competitor's flaky offering but then vow never to buy anything but Nokia in the future.

    Seems to me a new Chief Exec would do well to recognise that.

  • Comment number 13.

    Mick #11: "Some very good points Mark_MWFC #8. But you missed one of the biggest reasons why Nokia will never allow itself to be sucked into the Android camp. Google. I wouldn't want a handset with Android, given the privacy track record of Google."

    Exactly. Android is a dumbed-down, hijacked linux. I just don't get why people are so eager to grab second best. Just because Google has a budget for advertising?

  • Comment number 14.

    Hi Rory,

    I never comment in these sort of forums but feel so strongly about your comments on this subject that I took the trouble to register so I could respond.

    Mark_MWFC is almost bang on in my opinion. The only additional commentsI would add are that Nokia had to do something radical to:

    1. Appease its shareholders - the vast majority of which are US based pension fund, etc; and
    2. Turn the US [stock] market [analysts] back in it's favour - unfortunately it is a very fickle world we live in which listens to US market analysts above all else and thinks that if Nokia is not doing so well in the US then it must be bad.

    Sadly perception is everything these days and Nokia had to react so OPK was always an easy target (and he will walk away a very wealthy man so is it really that bad for him ;-) ) ?

    What we should focus on is Nokia's market share in Asia - massively higher than any of its rivals and the market where there is huge future growth potential. If Nokia's next generation of high end products can be up-sold to those up and coming consumers (who never bought an iPhone or an Android!) then the potential for Nokia is huge. If that happens it's not difficult to see who might easily then hold the majority of the value and profit share going forwards.

    Even with a Canadian at the helm, those Finns are not going to fall down quite so easily - and anyone that likens them to the one hit wonder that was Motorola and suggests they sell their soul to Google needs to think again.

    Times may change but journalism never varies!

  • Comment number 15.

    quixote #13.

    "Android is a dumbed-down, hijacked linux."

    it would be more accurate to say android is a JVM running on top of a (spec'd down) Linux.

  • Comment number 16.

    Just another irregular poster siding with Mark_MWFC and eneddy and wondering why it is that journalists are so obsessed with "mindshare" and the U.S. market...

    Then again, they've got Nokia thinking on exactly the same lines. And if the guys in Keilaniemi throw all their eggs in the basket of "playing well in Peoria" and forget their massive base in emerging markets, they may not be doing themselves such a great service after all.

  • Comment number 17.

    Just a quick comment, I think NOKIA have lost their way somewhat, I had a N97 its good but compared with an apple its a bit clunky. I also found the settings irritating and a pain to set up, i also found it needed reseting by taking the battery out every so often. Also a I get older I find i use apps less and just need the phone to get my emails and texts and calls I think they need to look at what market they are selling to (what ages) as as far as i can see the age market is also major factor, I mean do you need an all singing and dancing phone just for texting and checking your emails whilst out and about. I am certainly NOT a technophobe but think NOKIA need to market themselves better and maybe have a long look at the OS and what they are trying to accomplish and maybe get their core business i.e calling and texts and email right. Also change the designer of the hardware the new N8 its not a good looker is it really?

  • Comment number 18.

    I agree with Rory, this is a telling move if the truth be told. Whilst Nokia still has a huge market share amongst run of the mill phones across all markets globally they've taken their eye off the ball at the top end of the market for some time now.

    When they did make an earnest attempt at a high-end phone: The N97 the hardware was good (except the cheap plastic back) but the software was buggy and slow, so despite a great camera and the potential to do lots of cool stuff it crashed so regularly for me it had to go. I'm now quite happy with my E72 as a business phone which does most of the things one needs and has good battery life, but I'd like to have a nice touch screen with all the Nokia goodness as my other phone is a Blackberry so I don't really want 2 business devices, my plan was to have a business device and a social device because no-one is smart enough to offer the two combined yet, even better would be with dual sim, anyway, Nokia messed up big time with the N97 and should apologise to customers who bought it and send them a discount voucher off a new smartphone saying "we've changed" or something similar, many people just don't trust Nokia for high-end devices anymore.

    Nokia also don't really have a great customer support, when I bought the N97 I did so with the promise that there would be a Nokia Mac Suite which would basically do what the PC suite does, this still doesn't exist! I wrote to them about this several times and never heard back. Quite how Nokia expects to win over creatives who typically tend to use Macs for work is just beyond me. I've come to the conclusion that the Nokia dudes don't really know their customers that well and that lately this hasn't really bothered them much. Incidentally the PC Suite and Ovi Suite are very buggy and frustratingly poorly designed, I've wasted hours trying to do simple stuff because the software didn't recognise the phone or crashed.

    I'm very interested what the N8 and E7 will be like, as we've seen with the success of the HTC Desire if a handset is good then people really will flock to it. Nokia would be very smart to get closer to the early adopters and technologically interested customers to find out what they really want. They definitely need to become more attractive to app developers, perhaps by offering better terms than Apple and Google for developers and making clear that the Nokia world has a far greater number of users than all the other OS's combined.

    Perhaps the answer for Nokia is to start up a luxury brand, like Lexus for Toyota or Infiniti for Nissan, this would allow the brand to offer fantastic hardware and amazing software, hell maybe even Android if it's what the customer wants. Whatever happens Elop won't have much time to enjoy his house in Helsinki if he wants to dig Nokia out of this five year rut.

  • Comment number 19.

    All Nokia has to do is stay the course. Meego has the weight of Intel development behind it and, with the right hardware, should be able to reclaim the high end and geek markets. Until then they they can get by on the substantial amounts of market share and profits from their low and mid range phones in emerging markets.

    They should probably switch to using Android on their mid range though, Symbian really can't compete and it's costing them dearly.

  • Comment number 20.

    > There's no easy way to say this. Anyone who suggests
    > that Nokia should use Android is an idiot.
    > Sorry, but it's true.

    Amen on that.

    Anyone familiar with the Nokia Software Strategy[1] will know that Nokia have an elegant solution to support the vast range of devices they sell in a multitude of markets, whereas Android is for smartphones only, and relatively high spec devices at that.

    Symbian and MeeGo (with the Qt run-time present on both operating systems) gives Nokia *everything* they need to compete with Android and iPhone while still delivering in the low cost "feature phone" market. And with MeeGo, Nokia can go far beyond what is available today.

    Suggesting that Nokia give up control of it's platform to Google by embracing Android and becoming just another ODM competing with the likes of HTC, Huawei, Samsung etc. shows complete ignorance of the Nokia strategy[1]. This is something Rory and the BBC might want to investigate.

    Once again, embracing Android would be the worst possible choice that Nokia could make, they would be cutting their own throat. Continuing with and delivering on their current strategy (the first real product of which being the N8, due in a couple of weeks) is their best bet, by far.

    What Nokia *do* need to change is the quality of their service offerings (Ovi really needs a major overhaul, even a more comprehensible re-branding) and they need to get rid of the marketing agency that produces utterly incomprehensible marketing campaigns which make Nokia a laughing stock. Other than that, Nokia just need to deliver on their current technical strategy and they'll be absolutely fine - the new guy has a lot of changes that need to be made but meddling with the technical strategy is not one of them.

    1. [Unsuitable/Broken URL removed by Moderator] (4MB)

  • Comment number 21.

    Err right, it seems the link to the Nokia Software Strategy white paper is verbotten.

    Instead just Google for "nokia software strategy white paper" - it's the first hit (a 4MB PDF explaining in some detail why Android is not required).

  • Comment number 22.

    I have had a fair few Nokia's over the years and always found them reliable and very easy to use, and even with all the hype over the launch of the 3GS I still decided to stick with Nokia and ordered the N97, THE WORST PHONE I have ever ever used. Dropping calls constantly,freezing,refusing to unlock and the touch screen is Soo very bad that the phone needed the keyboard to be even slightly usable. It came with a list of functions and connectivity that on paper looked impressive, widgets on the home screen,firefox flash player,you can even download bit-torrents directly.....on paper! I could go on and on about this,not because I don't like Nokia but because I really wanted them to show all these upstart companies what a true Smart Phone should be. I hope the new guy can point them back in the right direction.......he can start by sending out an apology for the N97.



  • Comment number 23.

    > he can start by sending out an apology for the N97.

    The bloke who has just resigned, Anssi Vanjoki, head of Mobile Solutions (ie. high-end phones), basically apologised for the N97 back in February of this year.

    Nokia know the N97 was a disaster, and they have publicly said as much.

  • Comment number 24.

    Nokia dropped the ball quite frankly, not on the floor but down a mine shaft. If they can't get their OVI store up to scratch and create a simple, elegant yet powerful and reliable OS to compliment the generally good hardware then they SHOULD look at Android as it will only get better and more widely used despite it's detractors. Who cares if its VM if the hardware it runs on is quick enough. The emergence of pads in the market will only serve to increase it's attractiveness to consumers.

    Fact is the current OS is ridiculously buggy for the "app" hungry users of this generation without experiencing numerous problems on otherwise solid hardware, which is a crying shame. Whoever presided over such a fiasco would have been sacked from most other companies long ago.

    Some look to future OSes but look, in reality all Nokia did was stick plaster over existing code for the advent of touchscreens etc and tried to flog it as something new. Their attempt is quite frankly laughable and anyone who thinks it is a better platform now is deluded. The market crucially has voted with its wallet and the old guard within Nokia's walls should be kicked into touch.

    Those quoting Nokia penetration in Asia should note that budget devices will not be tolerated for many years to come, and they already salivate at the higher end offerings elsewhere. As Asians inevitably grow more prosperous the market for low cost tin cans coupled together with string will shrink considerably so Nokia's domination will remain for a while but on a foundation of sand unless things change.

    For a turnaround Nokia really need to take an honest look at their future offerings and be bold enough to dump anything that will not provide the rock solid user experience demanded by the increasingly tech savy public and get with creating the wow factor.

    Despite my comments regarding Andriod I do think Nokia should still pursue their own software delivery mechanism & OS, as for such a giant not to try to cash in is unthinkable, of course this does not mean that they can't test the waters.........

  • Comment number 25.

    I guess everyone tends to get very tribal about the whole smartphone issue. I'll be upfront, I'm an iPhone4 user and I love it. However, it seems to me that much of the argument misses the point - revenue!

    Nokia still lead the smartphone market by volume but Apple, with just 14% of the volume, walk away with a truly breathtaking share of the revenue. Maybe Rory will give us the facts to show this - I don't think house rules allow me to cut and paste the original US website showing the data.

    It matters little where people's loyalties lie, who's OS they prefer, which manufacturer they support and are comfortable with - if the manufacturer doesn't make money then they will eventually fall out of the market.

    My money is on Android being the mass-market winner, and Apple creaming off the high net-worth end, just as with their computer range, iPod, and I guess the same will be true with tablets and the iPad. Everyone else will be also-rans. Simple choice for Nokia!

  • Comment number 26.

    Milhousevh #23

    Really? Still stuck with this useless device for another 4 months tho. :-)

  • Comment number 27.

    I listened to Mikko Linnamaki at last night's momoLondon - he's CEO of Liquid Air Lab, which developed spodtronic the dominant white label mobile radio client (>100,000 app downloads a month currently). They've seen downloads from the Nokia Ovi app store overtake those from the Apple app store in the past three months.

    Their conclusion (and they're a German company despite Mikko's Finnish name)... Nokia has a future.

  • Comment number 28.

    quixote #13.

    "Android is a dumbed-down, hijacked linux."


    We can all play those games:

    WebOS is also a dumbed down Linux

    Symbian is an open-sourced and iteratively bloated/inefficient EPOC 5

    iOS is a dumbed-down OS X, which in turn is a load of Apple stuff on top of NeXTSTEP/UNIX blah blah blah.

    I'm not sure what your point is...Android just works (although it could be better - see webOS for the most elegant multi-tasking you'll ever see). Plus you can tinker with it if you like, which makes it even more useful.

    My thoughts about the article are that Symbian really isn't very good these days, it's stagnant. I was using an E72 recently (S60 3rd edition, Symbian 9.3) and I've also had a play with an N8, and Symbian just doesn't ever change, not really (I agree with streetpuppy above about Nokia's terrible touch implementation). The multi tasking is ok (although it often closes apps without telling you) and there are some good apps around, but the whole OS comes across as dated and really badly organised, and not intuitive at all. The amount of key presses it takes to do a simple thing is criminal, and web browsing is like pulling teeth. Nokia simply took their eye of the ball and became complacent, and I really hope that Meego changes this, as initial reports make it sound really exciting.

  • Comment number 29.

    Nokia is still number 1,but losing the smartphone martket.if they could switch to Android then they would be number one smartphone leader in time!

 

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