Nokia faces intense competition from Apple and Google as well as Chinese manufacturers in the low-end price range and “fell behind, missed big trends, and lost time,” its CEO said in a staff memo, according to tech blog Engadget.
In the very candid memo, posted to an internal Nokia employee system, Chief Executive Stephen Elop told Nokia staff the company was standing on a "burning platform," and that it had to decide how it was going to change its behavior, Engadget reported late Tuesday.
A spokeswoman for Nokia declined to comment on the contents of the memo, published in its entirety by Engadget, or its authenticity.
In the document, Elop lamented Nokia’s lack of progress in developing products that can compete effectivelywith those of its rivals, adding the company has been too slow to respond.
Chinese competitors were fast and cheap and proving a serious challenge for the group, he said.
“I have learned that we are standing on a burning platform. And, we have more than one explosion—we have multiple points of scorching heat that are fueling a blazing fire around us,” Elop said in the memo.
“Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range,” he added.
“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 (two) years ago, and this week they took our leadership position in smartphone volumes. Unbelievable,” he said.
He warned that Google had become “a gravitational force” that was attracting application developers, service providers and hardware manufacturers.
China was a force to reckon with in the low-end price range, Elop said, adding Nokia was losing market share to its Chinese competitors and had to up its game.
Manufacturers in the Shenzhen region of China are producing phones “at an unbelievable pace,” Elop said.
“By some accounts, this ecosystem now produces more than one third of the phones sold globally—taking share from us in emerging markets,” he said.
He asked how the company had got to this point. “Why did we fall behind when the world around us evolved?” he said.
Nokia needs to make some important decisions to win back market share, according to Elop.
Investors will be eager to discover what the CEO plans to do to regain market share and transform the group.
They will find out more on Friday, when Nokia will reveal its strategy at a Capital Markets Day event in London.