Nokia CEO Elop's leaked memo savages firm's failings

A memo to staff from Nokia boss Stephen Elop has laid bare his view of the company's failings.

Elop said that the company had been rapidly outpaced by Apple at the top end of the market, where Nokia used to dominate. Nokia's other key strength, sales in Asia and developing economies, was being undercut from Chinese manufacturers who can produce handsets more cheaply and in greater volume.

At the same time the company is being squeezed in the mid-range volume sector by Android he said, and had a very poor showing in the key US market.

"The first iPhone shipped in 2007, and we still don't have a product that is close to their experience," he wrote in the memo, leaked to Engadget.

"Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable."

As for operating systems there was still only one MeeGo handset on sale, while Symbian was not seen as competitive and was proving difficult to develop into a more full-featured platform.

Last year Nokia's market share was down eight per cent in the UK to just one in five users and that decline is mirrored in other markets. Credit ratings agencies have already told him they will be downgrading the company's stock further.

Within the company itself there was a general lack of accountability and leadership. There had been a series of technical misses and the company was in serious decline. Elop said the company would be making a major shift based on his announcement on 11 February.

Elop's memo comes after a series of internal ructions at Nokia, and it's clear some of the incumbent team are unhappy. He must have known the memo would leak, which means he's setting the scene for something that will seriously change the company.

It seems he will have a lot of explaining to do at Mobile World Congress to win hearts and minds, both within the company and with the wider world.

09 Feb 2011