Nokia’s newest CEO, imported from Microsoft, has his work cut out for him. The mobile giant has had its success everywhere except the world’s most important economy, the U.S, and that has stifled what could have (and should have) been a Symbian dominated smartphone market.
On September 10th, Nokia fired its longtime CEO, Olli-Pekka Kallasvuo, and swiftly replaced him with their first non-Finnish boss, Stephen Elop. The world’s no. 1 cell phone maker began its new journey with Elop on the 21st.
The changeup in leadership for Nokia is long overdue. The company should’ve been proactive when companies like Apple and Google started grabbing significant market share and profits. Now this huge problem stares Nokia down its throat, and calls for the new CEO to make drastic changes to a potentially struggling smartphone brand.
Stephen Elop, 46, was formerly the head of the Business Division at Microsoft. Nokia was intrigued by his familiarity with the U.S market, and it believes that his ability to help companies change will be a valuable asset to the company going forward. \”The time is right to accelerate the company\’s renewal,\” Nokia Chairman Jorma Ollila said in a statement. \”The Nokia Board believes that Stephen has the right industry experience and leadership skills to realize the full potential of Nokia.\”
The company’s new CEO has massive holes to plug in a fast-sinking ship. The Nokia N8 Symbian handset is set to hit the market on October 10th, and its specs don’t compare to its current U.S competition. Although it might be unfair to view the N8 as a flagship device, such as a Droid 2 or iPhone 4, its price doesn’t reflect that as much as it should ($549 unsubsidized).
For a smartphone billed as the newest iPhone killer, there is no news of a U.S carrier that will offer it with a deep discount, meaning it’s unlikely the device will get much of a foothold in the U.S—enter Stephen Elop.
Elop’s first order of business needs to be negotiating a deal with a major U.S carrier and even sacrificing profits for the bigger picture. The N8 and its future Nokia siblings need a strong showing in the U.S market, and the extra incentive consumers have to sign up with Verizon would help achieve this goal. Without relatively decent sales, Nokia’s smartphone business is at a major disadvantage to its competitors (in other words, this product line can’t be the Kin or Palm Pixi Plus). With Elop’s experience with U.S markets, he shouldn’t have a problem avoiding that iceburg.
For the foreseeable future, Stephen Elop’s mission must be to redirect the company to focus on its strengths, and that comes at the lower end of the smartphone market. After initiating a presence at a U.S carrier, Nokia needs to price and market its devices accordingly—its 5800XM and N8 can’t and shouldn’t compete with a Droid Incredible, and they should be priced that way. Nokia must introduce affordable handsets at the bottom of the rung first, and phones like the C6 and 5230 continue to prove they do very well there.
That still leaves Nokia without a real high-end flagship, with specs that can actually compare to its Android and iOS counterparts. The hardware of Nokia’s devices has always been solid, modern and elegant; it’s the software that alienates new smartphone buyers. This issue can only be addressed once Nokia’s root problem gets solved- Symbian.
Symbian is and always has been a relatively complex operating system with a rather laggy UI. The syntax is overly complicated and most of the tools are outdated. Unfortunately for Nokia, even Symbian 3 isn’t on the same level as Android. To quote a friend, “Its like going from Commodore 64 to Quadcore.” The user-friendliness of a smartphone is becoming increasingly important to consumers, and Nokia’s OS doesn’t meet that need.
Some experts say that Nokia needs to drop the Symbian OS altogether and reinvest in Android on all its handsets. Unfortunately for Nokia, the transition to Android could be painful considering its long-time investment in Symbian and its hundreds of legacy Symbian products.
Besides a changeup in operating systems, Nokia needs to open its eyes to the high demand of phone applications. Their Ovi app store isn’t cutting it, and estimates are that there are less than 7,000 apps currently available. To put that number in perspective, Android Market houses over 50,000 and Apple’s App Store almost 250,000 apps. With Nokia’s vast smartphone world market share (about 40%), the company should be able to access app developers in places that Android and Apple can’t.
Elop needs to make initiating a competitive app store a priority, and that means offering an open environment to developers. Nokia has the resources, they just need to be allocated and directed to the right investments. The fact is, consumers want apps-the demand is clearly there. Nokia can, and must meet that demand if it wants its high end products to compete in the U.S market.
If Nokia still wants to maintain its status as the world’s dominant smartphone manufacture, it has to break into the United States. In the end, regardless of what changes everyone thinks their new CEO needs to make, everyone can agree some tough decision-making must be done for the future of the company. Whether those decisions are to abandon its longtime OS, Symbian, or take a loss in profits in order to move phones off the shelves, those decisions must be made soon. Now is the perfect time for Nokia to confront its challenges with innovation, boldness and its freshest face, Stephen Elop.