Burning Platform Memo Reveals Nokias Angst

Anyone hoping for fireworks from Nokia’s Capital Markets Day event this Friday may not be disappointed, if a memo from Nokia CEO, Stephen Elop, allegedly leaked by someone at Nokia to Engadget, turns out to be real.

In the memo, Elop compares Nokia’s current predicament with that of a man working on an oil platform in the North Sea. The platform catches fire, and he is faced with a choice of burning to death or jumping into the freezing sea in the hope of surviving. He jumps, he survives. The memo then says: “We too, are standing on a ‘burning platform’, and we must decide how we are going to change our behaviour.

The memo considers the threats Nokia is facing, and its so-far lacklustre respose to them, at the top and bottom ends of the market, and, to complete the picture, in the middle too. There are so many choice, candid remarks contained in the memo, many of which bear repeating, such as:

“We have more than one explosion – we have multiple points of scorching heat that are fuelling a blazing fire around us.”

“Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range.”

“Google has become a gravitational force, drawing much of the industrys innovation to its core.”

“At the lower-end price range, Chinese OEMs are cranking out a device much faster than, as one Nokia employee said only partially in jest, ‘the time that it takes us to polish a PowerPoint presentation.’”

“While competitors poured flames on our market share, what happened at Nokia? We fell behind, we missed big trends, and we lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.”

“The first iPhone shipped in 2007, and we still dont have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.”

“We thought MeeGo would be a platform for winning high-end smartphones. However, at this rate, by the end of 2011, we might have only one MeeGo product in the market.”

Perhaps most revealingly, Elop says: “At the midrange, we have Symbian. It has proven to be non-competitive in leading markets like North America. Additionally, Symbian is proving to be an increasingly difficult environment in which to develop to meet the continuously expanding consumer requirements, leading to slowness in product development and also creating a disadvantage when we seek to take advantage of new hardware platforms. As a result, if we continue like before, we will get further and further behind, while our competitors advance further and further ahead.”

Rumours of a shift from Nokia to making Android or Windows Phone 7 devices have been rife for some time. In July last year, the firm’s then-head of mobile solutions, Anssi Vanjoki, attempted to draw a line under the issue when he said: “There are no plans to introduce an Android device from Nokia.”

But he resigned in September, the same month that Elop, ex-Microsoft, took up his post. It now looks like the biggest shock on Friday will be if Nokia doesn’t announce a major strategic shift.