In February 2011, Stephen Elop, CEO of Nokia, issued the “burning platform” memo (via @cdixon). In it, one paragraph particularly struck me:
The first iPhone shipped in 2007, and we still don’t have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.
And on February 11, Elop announced a strategic partnership with Microsoft in which all their mid- to high-end phones would run on Windows Phone 7.
Despite good reviews, Windows Phone has yet to gain significant market share, sitting at ~5%, and not all of those handsets are Nokia.
Nokia is in the midst of a major restructuring since its debt has been downgraded to junk status. It sold Vertu, and today announced it is cutting 10,000 jobs and shaking up parts of the management team.
In his original memo, Elop says that Nokia has to make a choice:
we’re going to have to decide how we either build, catalyse or join an ecosystem.
Did Elop make the wrong choice by trying to catalyze the WP ecosystem?
I think it’s more likely that his “burning platform” analogy was too close to the truth. Nokia faced either certain death from the flames by continuing their current strategy, or almost certain death in the icy waters of the North Atlantic if they were to radically change course.
In either scenario, Nokia is hard pressed to make it out alive.