Nokia may announce the death of MeeGo platform today. Nokia owns two
mobile platforms Symbian and MeeGo. Symbian is ruling the low end
phone market and still the market leader, however the market share has
been decreasing rapidly with the rise of platforms like android and
Iphone. MeeGo is still a developing platform and only one phone may be
launched by the end of 2011 if the development continues. Looking the
Nokia CEO's mail, Nokia may even scrap MeeGo development and shift its
focus to Windows mobile 7 or android. Most likely it will adopt
Windows 7.
Have a look at Nokia CEO Stephen Elop's mail to employees. Not sure of
the authenticity of this mail, however this news has been there for
quite sometime now and there has been no comment from nokia as yet.
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There is a pertinent story about a man who was working on an oil
platform in the North Sea. He woke up one night from a loud explosion,
which suddenly set his entire oil platform on fire. In mere moments,
he was surrounded by flames. Through the smoke and heat, he barely
made his way out of the chaos to the platform's edge. When he looked
down over the edge, all he could see were the dark, cold, foreboding
Atlantic waters.
As the fire approached him, the man had mere seconds to react. He
could stand on the platform, and inevitably be consumed by the burning
flames. Or, he could plunge 30 meters in to the freezing waters. The
man was standing upon a "burning platform," and he needed to make a
choice.
He decided to jump. It was unexpected. In ordinary circumstances, the
man would never consider plunging into icy waters. But these were not
ordinary times - his platform was on fire. The man survived the fall
and the waters. After he was rescued, he noted that a "burning
platform" caused a radical change in his behaviour.
We too, are standing on a "burning platform," and we must decide how
we are going to change our behaviour.
Over the past few months, I've shared with you what I've heard from
our shareholders, operators, developers, suppliers and from you.
Today, I'm going to share what I've learned and what I have come to
believe.
I have learned that we are standing on a burning platform.
And, we have more than one explosion - we have multiple points of
scorching heat that are fuelling a blazing fire around us.
For example, there is intense heat coming from our competitors, more
rapidly than we ever expected. Apple disrupted the market by
redefining the smartphone and attracting developers to a closed, but
very powerful ecosystem.
In 2008, Apple's market share in the $300+ price range was 25 percent;
by 2010 it escalated to 61 percent. They are enjoying a tremendous
growth trajectory with a 78 percent earnings growth year over year in
Q4 2010. 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.
And then, there is Android. In about two years, Android created a
platform that attracts application developers, service providers and
hardware manufacturers. Android came in at the high-end, they are now
winning the mid-range, and quickly they are going downstream to phones
under €100. Google has become a gravitational force, drawing much of
the industry's innovation to its core.
Let's not forget about the low-end price range. In 2008, MediaTek
supplied complete reference designs for phone chipsets, which enabled
manufacturers in the Shenzhen region of China to produce phones at an
unbelievable pace. By some accounts, this ecosystem now produces more
than one third of the phones sold globally - taking share from us in
emerging markets.
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 don't 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 have some brilliant sources of innovation inside Nokia, but we are
not bringing it to market fast enough. 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.
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.
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." They
are fast, they are cheap, and they are challenging us.
And the truly perplexing aspect is that we're not even fighting with
the right weapons. We are still too often trying to approach each
price range on a device-to-device basis.
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. 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, catalyse
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.
On Tuesday, Standard & Poor's informed that they will put our A long
term and A-1 short term ratings on negative credit watch. This is a
similar rating action to the one that Moody's took last week.
Basically it means that during the next few weeks they will make an
analysis of Nokia, and decide on a possible credit rating downgrade.
Why are these credit agencies contemplating these changes? Because
they are concerned about our competitiveness.
Consumer preference for Nokia declined worldwide. In the UK, our brand
preference has slipped to 20 percent, which is 8 percent lower than
last year. That means only 1 out of 5 people in the UK prefer Nokia to
other brands. It's also down in the other markets, which are
traditionally our strongholds: Russia, Germany, Indonesia, UAE, and on
and on and on.
How did we get to this point? Why did we fall behind when the world
around us evolved?
This is what I have been trying to understand. I believe at least some
of it has been due to our attitude inside Nokia. We poured gasoline on
our own burning platform. 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.
We are working on a path forward -- a path to rebuild our market
leadership. When we share the new strategy on February 11, it will be
a huge effort to transform our company. But, I believe that together,
we can face the challenges ahead of us. Together, we can choose to
define our future.
The burning platform, upon which the man found himself, caused the man
to shift his behaviour, and take a bold and brave step into an
uncertain future. He was able to tell his story. Now, we have a great
opportunity to do the same.
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