Nokia's new CEO, former Microsoft executive Stephen Elop, will bring a touch of Silicon Valley to the Finnish cellphone giant. But there's a lot more Elop is going to have to do to get Nokia back on track.
While the company is still the world's largest cellphone manufacturer, it has lost much of its mindshare in the high-end smartphone industry to Apple and Google. (Apple has swallowed the profits, too.) It won't be easy to win it back, but Elop should at least be able to make some progress. We've put together a checklist for Elop's first few months on the job.
1. Make it the company's top priority to be competitive in smartphones
Smartphones are still a small percentage of the overall phones sold in the world, but they represent a significant, disproportionate percentage of revenues and profits. If Nokia continues to lose at smartphones, it will be in serious trouble. So this should be Elop's first mandate.
2. Shift the focus from smartphone hardware to software
What made Apple's iPhone such a revolutionary product wasn't just its industrial design but its software. It was miles ahead of the entire industry, and is still the best mobile software on the market.
This has been a weak spot for Nokia, and that's where Elop's background at Microsoft and Macromedia could be helpful. He should at least realize how important software is to smartphones, something Nokia's last regime didn't seem to. According to a former Nokia employee who got in touch with Daring Fireball's John Gruber, Nokia has long valued hardware over software. If Nokia has a chance to compete with Apple and Android, it must flip that around.
3. Pick a single smartphone platform to invest in, and dramatically simplify its platforms across the board
Nokia has one of the most convoluted product lines in the tech industry. Its size has a lot to do with it, but it just feels disorganized. No one knows what they're getting. It's time to cut down the product line, perhaps by half or more, and focus onone smartphone platform—whether Symbian, the newer MeeGo, or something new.
And Nokia's dumb phones should all start to run on one or two similar platforms, too, so the entire lineup is more cohesive.
4. Take a long, hard look at Google Android (or maybe Microsoft's Windows Phone 7)
The smartphone platforms that Nokia has in-house are not up to speed with Android or Apple's iOS. Apple's software is off-limits. But Nokia could adopt Android. It would be a huge shift for the company, and it might put it in a weaker position in some aspects because it would no longer fully control the software it uses for the basis of its products. Nokia would be the equivalent of HP or Dell in the PC world.
But if Nokia were to adopt Android, it would instantly be the biggest Android partner in the world. It could have a real impact on how Android was developed, and it could also customize Android however it wanted. And, even better, it would further reduce Apple's relative share to Google.
Elop may want to partner with Microsoft and Windows Phone 7 instead, assuming it's any good. That would be a huge coup for Microsoft, but it probably wouldn't give Nokia as much control than if it were to use Android.
5. Install a product visionary or two in charge of making Nokia awesome
Elop is a manager. And unless he has been hiding talents, he doesn't seem like much of a product visionary. But Nokia needs one of those, so Elop has to find one. It's possible they're hiding inside Nokia, the way Apple's industrial design guru Jonathan Ive was there before Steve Jobs returned.
But maybe Nokia will try to hire former Microsoft product dude J Allard, or former gadget boss Robbie Bach? They had a few successes — and many failures — at Microsoft, so it's hard to say they're going to be the best options. But Elop knows them.
6. Get the services strategy under control
Right before Apple got everyone thinking about mobile apps, Nokia went on a services shopping spree, under the impression that it was going to sell its customers not just phones, but mobile services. Generally, apps and the web have taken over a lot of that activity, though. But now Nokia still has Navteq (GPS), Plazes (social networking), Dopplr (social networking), and other acquisitions on its hands. So what's it going to do with all that? And what will happen with "Comes with music," Nokia's subscription-based attempt to rival iTunes?
7. Figure out what Nokia means to the United States, especially to carriers
Nokia still has a big presence in Europe and in other markets, but it's as good as dead in the U.S. That's not good because the U.S. is one of the most important markets for high-end smartphones, and where a lot of the best smartphone app development is happening.
So Nokia needs to figure out its U.S. strategy quickly, and convince U.S. carriers like AT&T and Verizon Wireless that it will be useful to them again. Because it hasn't been for years.
8. Prove to developers it's worth their time
New CEO Elop channeled old boss Steve Ballmer's famous "developers, developers, developers" mantra today to close out the Nokia World conference, showing his affection for developers. But if a developer is going to write a mobile app these days, especially if it's based in the U.S., it's going to do it for the iPhone first, Android second, and Nokia... probably fourth or fifth. Nokia can win developers by illustrating a great platform and commerce strategy. But until then, they're right to be skeptical.
9. Boost employee morale
Nokia actually has pretty good employee ratings, according to Glassdoor.com, which tracks this stuff. Nokia staffers gave the company a 3.5 rating, which is "satisfied." That's higher than Ericsson (3.3), Motorola (2.8), and Samsung (2.8), but it's lower than Apple (3.8) and Google (3.9).
If Nokia is going to leapfrog Apple and Google, it needs to be an awesome place to work.
10. Do something magical
Nokia has always been decent, but it's been a long time since anyone went "whoa!" when they used a Nokia device. (If ever.) Apple (and Android) have won by totally leapfrogging the competition, which is one of the reasons that Motorola, Palm, RIM, and Nokia were or are in so much trouble.
So Elop needs to push Nokia to do something truly amazing, and not just good-enough or mediocre. This isn't the first priority, and one hit phone won't save the company, but it would be a huge help.