Nokia Finally Faces the Hard TruthS

Nokia CEO Stephen Elop is pissed the Finnish cellphone maker relinquished their market dominance to Apple and Google. Real pissed. Fearing the company has reached a point of no return, Elop issued a no-holds-barred 1,300-word memo to employees, and seems primed to make some bold moves in the next week to help Nokia regain some of its former glory.

Bluntly stating that they've failed to compete with any of the major smartphone players, Elop, a former Microsoft executive, minced no words in the memo, which included the following bit:

"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."

Elop not only called out Nokia's lack of innovation in recent years, he even suggested that latching onto another smartphone platform was a possibility. Doom and gloom as this scenario may seem, it's actually a good thing for Nokia. We've been saying for a long time now that Nokia was traveling down a path of suck when it comes to their software. And finally, they realize change is necessary...radical change.

Elop compared Nokia's situation to a man on a burning oil rig who jumped from the rig's platform into freezing waters to save himself. He said Nokia is on a burning platform (which they poured gasoline all over) and it's time for them to jump.

Praising Apple's commitment to user experience, and Android's ability to attract the masses through innovation, Elop evaluated the current state of Nokia as well. While indicating that the MeeGo platform is promising, he worried MeeGo would be obsolete by the time a device hit the market, and conceded that Symbian's time has come and gone. Ultimately, he says a single product alone can't save Nokia, and that they need a unified ecosystem across all devices, whether it's one they create, or one they adopt.

While Nokia has tried to woo developers with Symbian's openness, the truth is that they've had an ambivalent attitude towards their smartphone OSes, and it shows. In fact, the main problem with Nokia smartphones is not the hardware. It's the software. The N8 and N97 phones were both well-constructed disasters, even by Nokia's standards.

When using their smartphones, rarely do the hardware and software feel like they're working together to deliver a quality user experience. It seems like if the internal hardware is up to speed, the OS is a mess. And when Nokia introduces something innovative on the software side, the phone lacks the proper hardware to make proper use of that innovation.

In the past, it was easy for Nokia to fall back on profits from international dumbphone sales. After all, they had the best-selling phone in the world. But now that the dumbphone market is drying up and smartphones are increasingly viewed as just phones by the average consumer, Nokia no longer has that security blanket. And in that spirit, Elop attributed Nokia's decline on a lack of leadership, a lack of internal collaboration and, most importantly, a lack of innovation.

Ah, innovation. Once upon a time, Nokia used to innovate. What Apple did for smartphones in 2007 with the iPhone, Nokia did for dumbphones in 1996 with the introduction of the 2160, which was lightyears ahead of most other phones. Even in the '00s they had some imaginative products; for example, the 6800, which featured one of the first foldout QWERTY keyboards on a phone, or even the N95, which made tech geeks swoon prior to the iPhone's release. But when the industry focus shifted to software, Nokia fell behind, because their strength had always been hardware.

Nokia says they'll start talking about the future on Friday. But where should they go from here? The possibility of Nokia functioning strictly as a hardware company sounds amazing. They make AWESOME hardware. They always pack great cameras in their phones. The build quality is always top notch. And when was the last time Nokia suffered anything resembling an Antennagate scandal? The only thing missing from their devices is a good mobile OS. If they adopt the Android platform (which would force them to conform to a set of required specifications) and put all their effort into hardware R&D, Nokia could really churn out some quality phones and tablets. Maybe then, they could become relevant in the tech world once again. [The Register via Engadget]