Nokia 'on a burning platform,' CEO warns

HELSINKI: The world's top mobile phone maker Nokia is "standing on a burning platform" surrounded by a "blazing fire" of competition, new company head Stephen Elop says in a dramatic call for radical change.

In an internal memo obtained by AFP Wednesday, Elop's memo paints a picture of a desperate man who must make the drastic move of plunging into icy waters in order to save himself.

The company must now make a similar radical choice, he warned.

"We too, are standing on a 'burning platform,' and we must decide how we are going to change our behaviour," Elop said.

The memo is a scathing indictment of Nokia's "non-competitive" operating system Symbian, a lack of accountability and leadership, painfully slow product delivery, a lack of internal collaboration and a general "series of misses."

The Finnish company was once the industry's top dog, with a 40 percent share of the mobile device market as recently as second quarter of 2008 but it has been on the slide ever since, falling to 31 percent in fourth quarter 2010.

Although Nokia refused to officially comment on internal communications, a company source told AFP the memo was genuine and was sent to employees last week.

With this brutally honest appraisal of the company's woes, Elop appeared to be setting the scene for a spectacular shake-up, which he is expected to unveil on Friday at a strategy and financial briefing in London.

"When we share the new strategy on February 11, it will be a huge effort to transform our company," he said.

Ahead of the big day, there has been a flurry of rumours about what to expect, including a report by German weekly WirtschaftsWoche that Elop plans to sack half of Nokia's management.

The Federation of Professional and Managerial Staff and the Union of Professional Engineers meanwhile said they would be watching developments closely.

Analysts agree that Elop must address on Friday where the company stands on the crucial issue of mobile phone operating platforms.

The world is being carved up between users of Apple's proprietary platform, Google's open-source Android and Nokia's Symbian, which Elop has said has a good future.

"What we have seen is that Android and Apple have been very effective in taking market share and the big leader, Nokia, has not been able to convince end users that Symbian is as good as Android or Apple's iOS," Magnus Rehle of Greenwich Consulting told AFP.

"This means we're going to have to decide how we either build, catalyse or join an ecosystem," Elop said, referring to the key competitors who have been eating away Nokia's market share.

This comment sparked a flurry of speculation that Nokia could be considering teaming up with an existing platform, such as Android or even Microsoft's Windows Phone 7.

"It could either be a very bad marriage or a marriage of two players that have not been very effective alone," Rehle commented.

As for teaming up with Android, Pohjola Bank analyst Hannu Rauhala said that would be a serious dent to the Nokia brand, effectively relegating the company to a manufacturer of Android phones.

"Google steers Google's operating system and it will always look like Google's," he said.

Elop said in the memo that he did not doubt Nokia's "brilliant sources of innovation" but the problem was in bringing these innovations to the market -- a criticism made by analysts for years.

"Symbian3 came one quarter late and we're still waiting for the first software updates even though the products have been on the markets for four months now," Nordea Bank analyst Sami Sarkamies said.

"If you look from the outside, too little seems to come out of the company and it's coming out too slowly," Sarkamies added.