Nokia, Elop and the «road to hell»

13 May 2013

As featured on TM Forum's the Insider blog

Nokia’s embattled CEO, Stephen Elop, continues to draw flak, not just from the press, but this time from his own shareholders.

The man, accustomed to jumping from burning platforms and being criticized by all and sundry for dumping Symbian and jumping into bed with Microsoft, has now been told that it might be time to ‘switch to another road.’

One particularly brazen and obviously disgruntled shareholder – and Finnish no doubt – with the name of Hannu Virtanen told Elop, “You're a nice guy ... and the leadership team is doing its best, but clearly, it's not enough," according toReuters.

He then asked, “Are you aware that results are what matter? The road to hell is paved with good intentions. Please switch to another road.”

He may as well have said that Elop had already sold his soul to the devil. Industry commentators have been quick to throw fuel on the hell fire, just as they did when the first platform first started burning, The Insider included.

Sarah Reedy atLight Reading commented, “The problem is, it's going to be quite hard to ‘switch to another road’ at this point. I do think Nokia is smart to stay on the sidelines of the Apple and Android fight, but it has to find its niche elsewhere.

Crawling back to Android is a lost cause -- it's too little, too late. At this point, its options may be to either focus on taking down BlackBerry, a tricky proposition given their relative enterprise offerings, or to become the champion of the cheap phone.”

Telecom TV’s, Martyn Warwick, exhibiting his best restraint, said that angry investors were having increasing doubts about “the man whose bath time pleasure is to rearrange the tiny deckchairs on his battered and soapy model of the Titanic” after he gave “the full steam ahead and damn the torpedos” spiel to shareholders. Warwick refers to Elop as the “CEO who seems mesmerized by an evangelical vision of Windows that is invisible to almost anyone else apart from Steve Ballmer.”

Perhaps the biggest concern to anyone following this ‘disaster novel in the making’ is that Elop, under questioning, said he had no Plan B – or at least was not admitting to having one. It seems bizarre, even to the untrained observer, that any CEO would lead a faltering company down a one-way path with no backup plan in case that road becomes impassable.

I’m sure he has a Plan B but it may have been too early or too embarrassing to reveal it at this stage. If it was to release versions of the slow-moving Lumia range powered by another OS, then he would upset his biggest benefactor, Microsoft. If it is to re-visit Symbian, he will be laughed out of the job, and if it’s to buy Blackberry or develop a new OS, the economics just wouldn’t stand up.

It may be wishful thinking but maybe, just maybe, the announcement this week of the new low-end touchscreen Asha 501, which is the first to run on a new version of the vendor’s Asha mass-market device platform, is his real Plan B. Nokia said it expects to sell 100 million of these sub $100 smartphones over the coming years, and they might just do it.

This is not only a plausible Plan B; it would help Nokia claw back position in emerging markets where it has lost ground in the cheaper feature phone sector. Those customers are now scrambling for smartphones, and operators are only to happy to provide them with something in the sub-$100 range.

Nokia may be well advised to offer operator-branded models to keep those competitive mobile CSPs on side as well. Android and iOS may simply be overkill for these markets, and Asha may establish a beachhead that could prove difficult to overrun.

Whatever happens between now and his next shareholder meeting, Elop will need to put his best fire-fighting, swimming and road running skills into practice if he hopes to complete his own triathlon test as a CEO.

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