'Burning' memo from Nokia's Elop sets stage for OS shake-up

Nokia must go through radical changes to flourish in the smartphone sector, the CEO says

By , IDG News Service |  Mobile & Wireless, MeeGo, Nokia

Nokia CEO Stephen Elop has compared the company's current situation to standing on a burning oil platform in the North Sea. Nokia must decide how it is going to change its behavior, or perish in the flames as its platform burns, Elop wrote in a memo to employees.

Two Nokia employees who asked that their names not be used confirmed the existence of the memo to IDG News Service. The website Engadget published what it says is the full contents of the memo, which pulls no punches about Nokia's dire situation and past failures.

Nokia hired Elop, its first non-Finnish CEO, in September 2010, luring him away from his job as head of Microsoft's Business Division. The company's board was widely seen to be searching for a turn-around CEO.

The memo doesn't explicitly say that Nokia will get rid of existing software platforms and adopt either Windows Phone 7 or Android when it announces its new strategy on Friday, but the writing is on the wall, according to analysts. Elop includes that possibility in a short list of alternatives he sees for Nokia.

"The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things," the memo says. "Our competitors aren't taking our market share with devices; they are taking our market share with an entire ecosystem. This means we're going to have to decide how we either build, catalyze or join an ecosystem.

"This is one of the decisions we need to make. In the meantime, we've lost market share, we've lost mind share and we've lost time."

The memo opens with Elop recounting a "pertinent story" that is an obvious reference to the Piper Alpha oil platform explosion in the North Sea in July of 1988. A man awakes to a loud explosion and finds the "entire" platform on fire and must make the awful decision to either to be consumed by fire or plunge into the "dark, cold foreboding" waters. "We too, are standing on a 'burning platform,' and we must decide how we are going to change our behavior," according to the memo as published at Engadget.

Elop goes on to say that Symbian has proven to "be non-competitive in leading markets like North America." Also, the company is finding it difficult to rapidly develop new products with the latest hardware features. "As a result, if we continue like before, we will get further and further behind," the memo says.

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