Feeds

Shock treatment! Nokia's radical break with the past

Tackling the corporate bureaucracy

Internet Security Threat Report 2014

Analysis So Nokia's board has decided the company needs shock treatment: it's brought in a non-Finn for the first time in its history, and someone who carries very little baggage to boot. This should be interesting.

In fact, Stephen Elop has just six months' experience as the CEO of an independent company, gained in a brief stint leading Macromedia into an acquisition by Adobe. So modest is Elop's resume, that he lists his tenure at fast food outlet Boston Chicken Incorporated twice on his LinkedIn profile. (To be precise - Boston Chicken Inc and Einstein Brothers Bagels.)

The decision is tough on the most capable internal candidates - particularly the popular Anssi Vanjoki, whose time may yet come - but at Nokia from today, inexperience and outsider qualities may be considered virtues.

In interviews Elop has stressed the importance of the user experience in modern electronics, the UI and UX as part of the elusive "consumer satisfaction". Nokia owes much of its success in the 1990s to design and usability, but it has dropped the ball in the past decade, and since 2007 has been handed a brutal lesson in what really matters to the end user by an upstart, Apple.

Elop's background in operations - which includes a year at Juniper, steering Macromedia through the dot.com bust and of course the Boston Chicken experience - must have impressed the board. Nokia's global logistics operation is formidable - you don't want to muck it up - but that's not the company's main problem. The CEO that Nokia has just sacrificed to the markets, Olli-Pekka Kallasvuo, was an accomplished operations guy too. Something radical is needed - and the new CEO faces something of a paradox.

What went wrong?

The conventional wisdom amongst financial analysts is that Nokia remains rooted in a business that's now old and increasingly unprofitable: voice phones. The warning bell sounded clearly two years ago when DKIB pointed out that Nokia was now dependent upon sub-$50 phones. The future belongs to manufacturers of high margin data devices. So Nokia needs to join them there, and also diversify, by creating new markets where its mobility and radio engineering skills can be profitably exploited.

It's amazing just how widespread is the perception that Nokia has been left behind. For example, today the BBC, reporting on the change of CEO, tells us that Nokia has "struggled to break into the smartphone market". This must hurt; Nokia effectively created the smartphone market and has (numerically, at least) led it for a decade. But Nokia's smartphones really aren't used as data devices. They're expensive phones, and the end-user experience has been horrible and getting worse. (Six months before Apple unveiled the iPhone, we were asking "Whatever happened to the smartphone?"). Nokia responded with a very poorly executed push into services (outsourced to a design agency) which simply highlighted all the things it's not very good at.

It's true that Nokia is taking a beating in the high-end: its products aren't competitive and it has wasted three years through staggering complacency, as the iPhone and new Blackberry phones take the lions' share of the profits. But as I pointed out recently, unlike IBM or Apple in their crisis days, Nokia still makes money. The danger is that it can't afford complacency, because consumers change phones far more easily than they change other goods or services.

Secure remote control for conventional and virtual desktops

More from The Register

next story
YOU are the threat: True confessions of real-life sysadmins
Who will save the systems from the men and women who save the systems from you?
Broadband sellers in the UK are UP TO no good, says Which?
Speedy network claims only apply to 10% of customers
Download alert: Nearly ALL top 100 Android, iOS paid apps hacked
Attack of the Clones? Yeah, but much, much scarier – report
Virgin Media struck dumb by NATIONWIDE packet loss balls-up
Turning it off and on again fixes glitch 12 HOURS LATER
Ofcom snatches 700MHz off digital telly, hands it to mobile data providers
Hungry mobe'n'slab-waving Blighty swallows spectrum
Fujitsu CTO: We'll be 3D-printing tech execs in 15 years
Fleshy techie disses network neutrality, helmet-less motorcyclists
Facebook, working on Facebook at Work, works on Facebook. At Work
You don't want your cat or drunk pics at the office
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
The Heartbleed Bug: how to protect your business with Symantec
What happens when the next Heartbleed (or worse) comes along, and what can you do to weather another chapter in an all-too-familiar string of debilitating attacks?
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.