Stephen Elop's mission impossible

By Michal Lev-Ram

Nokia chief executive officer Stephen Elop is a man on a mission. Despite the Finnish phonemaker's rough week (it issued a profit warning on Tuesday, which sent shares tumbling), the newish CEO recently made the rounds at a couple of confabs in Southern California to pitch his turnaround plan for the company.

Speaking at Qualcomm's (QCOM) Uplinq conference in San Diego Thursday morning, Elop said there is room for a third ecosystem -- Nokia's (NOK) collaboration with Microsoft (MSFT) -- to compete with Apple (AAPL) and Google (GOOG). But the CEO's lofty plans to come up with a viable alternative to increasingly popular iPhones and Android devices may turn out to be just lofty plans. Why? With the first NokSoft device expected late this year, the company's current trajectory is already too little, too late. And no amount of future innovation on Microsoft or Nokia's part can turn back time.

"What has happened over the last couple of years is there has been a shift from a battle of devices to a war of ecosystems," Elop told an audience of mobile developers at the Uplinq conference. In that he's echoing a sentiment that comes across in a long Bloomberg Businessweek profile that paints Elop as a leader tasked with rallying yet rebuilding Finland's equivalent, in status and prominence, of 1980's era General Motors -- a monolith at the height of its powers, and thus in an undeniable decline.

Well, that ecosystem war started way back in 2007, when Apple launched the iPhone. While Google responded with the now-wildly successful Android, Nokia wasted time tinkering with Meego, a mobile platform it collaborated on with chipmaker Intel (INTC). It took until February of this year for the Finnish phonemaker to decide to throw its weight behind Microsoft's Windows Phone. And it will take until end of this year to see what the fruits of that partnership will look like.

In the meantime, hundreds of thousands of developers have jumped on the Android bandwagon (talk to any startup desperately looking to hire Android programmers and you'll see why). Even Elop admits that Google, not other phonemakers like HTC or Samsung, is his greatest competition. Of course, Nokia considered partnering with Android before it chose the Microsoft/Windows Phone route. But Elop said on Thursday that Nokia's final assessment was that "we would not be able to differentiate enough" on Android's platform.
So will Windows Phone give Nokia the level of differentiation it needs to really make a dent in Google and Apple's growth? That's doubtful, though we won't know for sure until at least 2013, when more NokSoft devices launch. By that time, Android in particular is expected to be even more ubiquitous, making it even harder for Nokia to compete.

Even Windows Phone 8, the upcoming version of Microsoft's mobile operating system, can't solve Nokia's problems. On Wednesday Microsoft unveiled a sneak peek at the revamped OS, a new, touch-centric interface that can work on any device and could help Nokia come out with some innovative tablets. But it doesn't solve the bigger problem facing both companies -- being late to the game.

Elop is a man on a mission alright, but it's hard to see how it's not mission impossible.

Is Nokia Breaking Up ?

Analysts mull Nokia breakup amid debate over shareholder gain
June 3, 2011 — 11:53am ET By Paul Rasmussen

Nokia CEO Stepehen Elop has strongly rebuffed rumors that Microsoft plans to take over Nokia's key devices and services unit. But research conducted by Bloomberg suggests that, having destroyed shareholder value by such a significant amount, the breaking price could be more than 50 per cent of its current worth.
Once valued at $300 billion, Nokia has seen its market value plummet around 77 percent, valuing the company at around $25 billion. Separating Nokia‘s handset, infrastructure, mapping and patents businesses would make the company worth around $39 billion, based upon valuations of comparable companies, according to Bloomberg.

"It's a classic situation where the parts are worth more than the whole," Matt McCormick, a money manager at the US-based financial advisory firm Bahl & Gaynor, told Bloomberg. "The clock is ticking. Nokia is a good brand, but it's a tired brand and they need to come up with something. They are going to be a strong candidate for a takeover."

Other analysts were less positive, believing that Nokia remained unattractive because it lacks a clear path to competing better with Apple's iOS and Google's Android. Other industry watchers have claimed Nokia was unlikely to attract any bidders and that its share price was still spiralling downwards.

In an effort to calm the gossip, Timo Ritakallio, the deputy CEO of the Nordic insurance company Ilmarinen, and the largest Finnish owner of Nokia shares, told the newspaper Helsingin Sanomat, "As the company's situation is very unclear, speculators can make hay." Despite this, Nokia's share price has continued to slide and was down nearly 5 per cent on the Helsinki Stock Exchange as of midday on Friday.

Nokia Terminates Ovi

Nokia (NYSE:NOK) will discontinue its Ovi mobile services umbrella this summer, continuing its existing initiatives and rolling out new efforts under the Nokia brand.

The transition, slated to begin in July, is expected to continue throughout late 2012 and spans across all Ovi solutions and international markets--no disruption of the device maker's service roadmaps is expected, and Nokia adds that consumers who purchase a new Nokia smartphone or feature phone in the coming months will see the new branding in place on most preloaded services.

"By centralizing our services identity under one brand, not two, we will reinforce the powerful master brand of Nokia and unify our brand architecture," said Nokia's CMO Jerri DeVard on the Nokia Conversations blog. "Our mobile experiences are tightly integrated with our devices--there is no longer a differentiation."Nokia introduced Ovi in August 2007. Ovi--"door" in Nokia's native Finnish--heralded the company's expansion beyond mobile devices and platforms into a range of web and data services.

Last month, the company said its Ovi Store mobile content marketplace now tops 5 million downloads each day, adding the storefront has grown by nearly eight times over during the last year to over 40,000 apps.Earlier this year, Nokia announced it will embrace Microsoft (NASDAQ:MSFT)'s Windows Phone 7 mobile operating system as its primary smartphone platform. Per terms of the agreement, Nokia and Microsoft will forge a worldwide mobile ecosystem integrating their respective assets--for example, Microsoft's Bing engine will power search across Nokia devices and services, and Microsoft assets like Bing and AdCenter will incorporate the Nokia Maps solution.

Last month, Nokia stated it will transfer its Symbian software activities as well as about 3,000 employees to global management consulting, technology services and outsourcing firm Accenture as part of its ongoing global workforce and site operations consolidations alignment. Per terms of the agreement, Accenture will provide Symbian-based software development and support services for present and future Nokia smartphones, also supplying Windows Phone-based mobility software, business and operational services to Nokia and other ecosystem participants. Nokia expects to sell roughly 150 million additional Symbian units in the years ahead despite the transition to Windows Phone 7.