Ailing Nokia seen to announce major shift
HELSINKI (AP) — Suffering from plunging market share and losing the technological edge in the wireless industry, Nokia Corp. is headed for change.
Stephen Elop, the new Canadian chief executive of the world's largest mobile phone maker, is expected to make a groundbreaking announcement at a strategy briefing with analysts in London on Friday.
He is the first non-Finn to head Nokia, with the choice of a North American reflecting increasing dominance of U.S. and Canadian companies in the phone business.
Elop has refrained from commenting on the Finland-based company's plans since he took over in September. But statements attributed to him, allegedly made to personnel this week and leaked to the media, suggest major changes are afoot.
Attention has focused on Elop's previous post at Microsoft Corp., with speculation he will announce a deal to incorporate the U.S. software giant's operating system on Nokia phones. Others believe Nokia will ditch its own Symbian platform for the increasingly popular Google Inc.'s Android system.
"Right now, Nokia is in a situation that we don't know where it's going and how," said Hannu Rauhala, analyst at OP Pohjola Bank in Helsinki. Nokia must tell us "what it's going to do, how it's going to do it and in what time frame," he said.
Nokia became world No.1 mobile phone maker in 1998, a position it still holds. Last year, it sold 432 million devices — more than its three closest rivals combined.
But market share has plunged — from a high of 41 percent in 2008 to 31 percent in the last quarter of 2010. And it is no longer the innovative trailblazer.
Apple Inc.'s iPhone has set the standard for today's smart phones, while Research In Motion Ltd.'s BlackBerrys are the favorite of the corporate set. And more recently, Android software has emerged as the choice for phone makers that want to challenge the iPhone.
Rauhala says it's difficult to know what's in store on Friday because "the speculation is from such extreme ends."
Besides losing the battle in the top end, Nokia's share in emerging markets is also being clawed away by dozens of Asian handset makers in what Neil Mawston from Strategy Analytics describes as a "pincer movement."
"Americans are pressuring Nokia at the top end and Asian vendors are doing so at the cheaper end," Mawston said.
Elop has acknowledged as much.
Last month he said the mobile industry had changed and that "now it's time for Nokia to change faster."
If this week's leaked memo is to be believed, his words have been harsher.
It says Elop blames an "attitude inside Nokia," which lacks "accountability and leadership to align and direct the company through these disruptive times."
In the memo, Elop is quoted as comparing Nokia to an oil platform on fire with "more than one explosion ... fueling a blazing fire around us."
Investors have long been expecting something new from Nokia but that has not happened and its share plummeted 20 percent last year.
For several days before Friday's meeting, Nokia's stock edged up — buoyed by expectations of positive news. But on Thursday it closed down almost 3 percent at €8.16 ($11.10) in Helsinki.