Nokia announced yesterday it was replacing its CEO with the former head of Microsoft’s business unit, Stephen Elop.
I don’t know the man, but I know Nokia, and I know Microsoft, and I can tell you this is a match made in mutual mucky problems.
Nokia used to make excellent smart phones. It was among the first to make terrific smart phones, actually. Remember, years ago, when your options were the Palm Treo, or one of Nokia’s cool devices? That was a pretty terrific position to be in for Nokia.
But company never aligned itself with American wireless carriers, which could subsidize the cost of their phones. So its phones cost far more than competing models. This was and remains the rate-determining step. This is Nokia’s single greatest downfall, responsible for most of its problems.
Over the years, better, more affordable options appeared — Blackberry, the iPhone, Android phones — and consumers went there.
That’s how Nokia missed out on the massive American smart phone boom. (I’m talking smart phones in America here. I’m well aware Nokia still leads in worldwide phone sales, but that share is dropping, and fast.)
From there, without a critical mass of smart phone consumers, and without competitive smart phone revenue, Nokia’s innovation fell off.
Which brings to today: a big company, once successful, without any real compelling options for consumers shopping in the smart phone space.
Enter the new CEO, from Microsoft’s business unit.
Questions:
- How will his business unit experience translate into leading Nokia in the consumer space?
- What has Microsoft done in the last 10 years to excite consumers? (Answer: Not much — the Xbox.)
- What success has Microsoft had in the smart phone space? (Answer: Very little.)
- Nokia and Microsoft share the lack of ability to connect with consumers. Neither has found the answer yet. How will this shared frustration help Elop lead Nokia? (Answer: Can’t imagine that it will.)
This CEO should have come from Apple.
Or Samsung.
Or even RIM, which continues to hold onto its customers even though they have sexier options.
But Microsoft?
Microsoft is scrambling to figure out how it will energize consumers, just as Nokia is.
I hope this works, as I’ve long been a fan of Nokia.
But the odds appear to be against success.
Alex, interesting on how number two above you can only recite the Xbox. Maybe you still run Windows XP? I’d say Windows 7 was a win overall, moreso than the Xbox was in the past 10 years. Also if you look at Xbox, there is more to it than just a console, it’s a gaming industry – vis a vis the latest Halo release. Also, in the past 10 years I’d say Exchange and Outlook/Office have taken over quite tremendously from Lotus and lest us not forget other Windows Server products MS have introduced like Hyper-V in compete with other vendors. Sure, bu no means are MS doing all great, but I think you’re a bit shortsighted in your article.