Nokia is expected to announce a new partnership with Microsoft at its annual Capital Markets Day tomorrow, according to several reports. Nokia CEO Stephen Elop, an outsider who arrived from Microsoft last year to take charge of the Finnish company, believes that a partnership between Nokia and another yet-to-be named player is Nokia’s best bet going forward.
As big as Nokia is, it can’t afford to go it alone, Elop told the blog AllThingsD in an interview last week. But who is Nokia’s new partner? BusinessWeek says that Elop held talks with both Microsoft and Google on the matter. But now, all signs are pointing to Microsoft as the key to Nokia’s radical strategy shift.
Nokia, Our Platform is Burning….
Despite the inability of former Nokia execs to grasp the fact that the mobile industry has changed since the time when Nokia was king, it has. Tomi Ahonen, a former Nokia exec turned consultant, claimed that Elop’s memorable “Burning Platform” memo to company employees was a hoax written by an American analyst.
But it was not a hoax at all, according to a number of high-profile news sites, including Engadget and BBC News, who each independently verified the memo’s legitimacy with multiple sources. Instead, it represents the new thinking that Elop brings to the global brand – a frank, “tell it like it is” viewpoint that former Nokia employees like Ahonen can’t quite understand.
“We poured gasoline on our own burning platform,” wrote Elop in the memo to employees. “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.”
The signs that Nokia was on a downward trend have been there for some time, but perhaps it took an outsider like Elop to take action – action like canceling Nokia’s first MeeGo smartphone, for example. This week, it was reported that the company has ditched its plans to launch its first phone using the MeeGo operating system, the OS that emerged from a combination of Nokia’s Maemo and Intel’s Moblin OS’. MeeGo was going to be Nokia’s new flagship OS, the one it would use to compete with the Androids and iPhones of the smartphone world.
Nokia has lost market share over the past few years to competitors like Apple and Google, the latter of which is now poised to compete with Nokia not only on the high-end smartphone front but also on low-end feature phones that have typically been Nokia’s bread-and-butter.
Nokia Said to be Choosing Microsoft
And now, the world and the markets await news of Nokia’s comeback plan.
According to a number of reports, that plan involves Microsoft. One of BusinessWeek‘s sources said that Nokia would prefer to have a partnership with a software company like Microsoft, rather than being yet another company that licenses Android software.
Microsoft’s new Windows Phone 7 mobile operating system has been favorably reviewed by technology journalists, bloggers and analysts, but has not picked up significant market share as of yet. A Nokia partnership where the Microsoft’s software ran on Nokia hardware – traditionally one of Nokia’s strengths – would change that.
A telling tweet from Google’s VP of Engineering, Vic Gundotra, appears to confirm this is the case. In a message that would appear cryptic to casual observers, Gundotra posted: “#feb11 “Two turkeys do not make an Eagle.” The date is referring to Nokia’s Capital Markets Day and the “turkeys” are clearly Google’s competitors in mobile: Nokia and Microsoft. Obviously, if Nokia had chosen Google, Gundotra wouldn’t be insulting the company in such a way.
Perhaps what’s most incredible about the forthcoming announcement, is not just the radical overhaul and course correction it represents for Nokia, but the speed with which it came about. Elop only took Nokia’s helm last fall – he moves fast, it seems.
Also expected tomorrow is confirmation of the reports that Nokia will shake up its management structure, too, with the dismissal of several top executives: Mary T. McDowell, the executive in charge of Nokia’s mobile phones unit; Niklas Savander, the manager of the markets unit; Tero Ojanpera, the manager responsible for services and mobile solutions; and Chief Development Officer Kai Oistamo.
Friday is shaping up to be an interesting day for mobile observers. Stay tuned.
