WHEN: TODAY, WEDNESDAY, JUNE 1ST
WHERE: CNBC'S "CLOSING BELL"
Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Nokia CEO & President Stephen Elop today on CNBC's "Closing Bell." All references must be sourced to CNBC.
GRIFFITH: MR. ELOP THANKS FOR JOINING US TODAY LET'S CLEAR THIS UP RIGHT NOW ARE YOU TALKING TO MICROSOFT ABOUT SELLING THE COMPANY OR NOT RIGHT NOW.
ELOP: NO THOSE RUMORS ARE BASELESS THERE ARE NO CONVERSATIONS.
GRIFFITH: YOU ARE NOT TALKING ABOUT SELLING THE PHONE BUSINESS YOU ARE NOT HAVING ANY CONVERSATIONS BEYOND THE FACT THAT YOU HAVE THIS DEAL WITH MICROSOFT TO DEVELOP THESE WINDOWS-BASED PHONES THAT WILL BE OUT SOMETIME LATER THIS YEAR THAT'S IT?
ELOP: THAT IS CORRECT THERE ARE NO CONVERSATIONS OF THAT NATURE GOING ON WE'RE FOCUSED ON THE STRATEGIC ANNOUNCEMENT THAT WE MADE IN FEBRUARY AND EXECUTING ON THE STRATEGY AND NOTHING BEYOND THAT.
GRIFFITH: VERY GOOD JON.
FORTT: ALRIGHT THANKS STEVE FOR BEING WITH US ONCE AGAIN NOW BERNSTEIN EARLIER TODAY DOWNGRADED NOKIA EXPECTING LOSSES IN Q3 POSSIBLY Q1 OF NEXT YEAR AND I THINK WHAT'S ON THE MIND OF LOTS OF INVESTORS HOW BAD COULD THIS GET HOW LONG COULD THIS TURNAROUND TAKE IS THIS ONE YEAR, TWO?
ELOP: SO CERTAINLY YESTERDAY'S ANNOUNCEMENTS WERE DISAPPOINTING I THINK THEY WERE INDICATIVE OF THE TRENDS THAT HAVE BEEN FACING NOKIA AND THE TRENDS THAT JUSTIFIED OUR NEED TO MAKE A STRATEGIC SHIFT. BUT WE'RE FOCUSED ON NOW IS GOING THROUGH THIS TRANSITION PERIOD AS QUICKLY AND EFFECTIVELY AS WE CAN AND MAKING SURE THAT WE DELIVER GREAT RESULTS IN THE FUTURE WE ARE NOT AT THIS POINT PROVIDING ANY ADDITIONAL GUIDANCE BEYOND WHAT WE PROVIDED YESTERDAY BUT WE'RE VERY CONFIDENT IN OUR ABILITIES TO DELIVER GREAT MOBILE PRODUCTS AND TO DRIVE THE RESULTS FROM THERE
FORTT: BUT I AM JUST WONDERING IF YOU COULD PUT SOMETHING MORE ON THAT I KNOW YOU ARE A STUDENT OF TECH HISTORY ADOBE HAD SOME HICCUPS IN THE LATE NINETIES THEY MANAGED TO GET THROUGH THOSE IN ABOUT A YEAR OR TWO APPLE TOOK FIVE YEARS FOR A TURNAROUND IS THIS MORE OF AN ADOBE SCALE ISSUE OR AN APPLE SCALE ISSUE
ELOP: IN THIS PARTICULAR ENVIRONMENT YOU HAVE TO MOVE QUICKLY. THE NATURE OF THE MOBILE INDUSTRY, IT'S CHANGING RAPIDLY. WE'RE CHANGING RAPIDLY. WE EXPECT TO BE ABLE TO IMPROVE THINGS RAPIDLY AS WELL.
FORTT: WHAT DOES CHANGING RAPIDLY MEAN IN THIS CASE? DOES THIS MEAN GETTING THOSE WINDOWS PHONE 7s OUT FASTER THAN EXPECTED? WHAT?
ELOP: THE RANGE OF CHANGE AT NOKIA IS MULTIFACETED. IT BEGINS WITH A NEW RANGE OF GREAT MOBILE PRODUCTS, SOME OF WHICH WILL USE THE WINDOWS PHONE OPERATING SYSTEM WHICH WE ANNOUNCED IN FEBRUARY AND ALSO A WHOLE RANGE OF PHONES AT LOWER PRICE POINTS TO SERVE EMERGING MARKETS. IN ADDITION TO THAT WE ARE INTRODUCING OTHER CHANGE TO MAKE SURE WE'RE MOVING MORE AGGRESSIVELY IN THE FUTURE. MOVING FASTER. BETTER LISTENING TO CONSUMERS, EXECUTING BETTER. WHILE PEOPLE HAVE BEEN FOCUSED ON THE PRODUCT CHANGE, OF COURSE, THERE ARE MANY OTHER CHANGES UNDER WAY AT NOKIA TO ENSURE SUCCESS IN THE FUTURE.
GRIFFITH: HERE'S THE QUESTION I HAVE, MR. ELOP. AS YOU TRANSITION FROM THE SIMBIEN PLATFORM THE OPERATING SYSTEM YOU'VE HAD FOR SO MANY YEARS THERE, TO THE WINDOWS OPERATING SYSTEM, YOU ARE ALREADY SCALING BACK RESEARCH AND DEVELOPMENT. TRYING TO CUT COSTS AS YOU MAKE THIS TRANSITION. BUT YOU'RE MAKING THE TRANSITION TO AN OPERATING SYSTEM THAT'S BEEN, USED FOR HANDSETS FOR TEN YEARS AND HAS FAILED TO GAIN TRACTION AT THIS POINT. AGAINST THE LIKES OF AN APPLE OR ANDROID. I GUESS MY FIRST QUESTION TO YOU IS, YOU KNOW WHAT IF IT DOESN'T GAIN TRACTION? THESE NEW WINDOWS PHONES THAT YOU'RE GOING TO BRING TO MARKET LATER THIS YEAR?YOU'RE ALREADY ABANDONING SIMBIEN FOR DOWN THE ROAD? WHAT'S PLAN B IF THIS DOESN'T WORK?
ELOP: PLAN B IS TO MAKE SURE THAT PLAN A IS VERY SUCCESSFUL. THE CRITICAL INGREDIENT FOR SUCCESS ARE THERE, CONSUMERS ARE SAYING THE WINDOWS BRAND OPERATING SYSTEM IS VERY GOOD. BETTER IN TERMS OF THEIR SATISFACTION THAN THE COMPETING PLATFORMS BUT MICROSOFT HASN'T HAD A PARTNER DOING ITS BEST WORK FOR WINDOWS PHONE.THAT'S THE COMMITMENT NOKIA MADE THROUGH THIS PROCESS. BY BRINGING TOGETHER OUR HARDWARE, SOFTWARE AND SERVICES ASSETS WITH THE STRENGTHS THAT MICROSOFT BRINGS WE HAVE A FORMULA WE BELIEVE WILL DRIVE GREAT SUCCESS.IT'S FURTHER SUPPORTED BY THE FACT DYNAMICS IN THE INDUSTRY ARE SUCH THERE IS A NEED FOR A THIRD OR BALANCING ECOSYSTEM IN THE ENVIRONMENT. SO EVEN IN THE LAST 48 HOURS AS I'VE BEEN SPEAKING TO SOME OF THE CEOS OF LARGE OPERATORS AROUND THE WORLD, THE SUPPORT IS VERY STRONG FROM THEM AS WELL. THEY SEE THE STRENGTH OF APPLE, THEY SEE WHAT IT'S GOING ON WITH ANDROID,THEY NEED A THIRD FORCE.NOKIA AND MICROSOFT REPRESENT THAT OPPORTUNITY.
GRIFFITH: WE HAVE BEEN SPEAKING TO ANALYSTS IN THE LAST COUPLE OF DAYS IN PREPARATION FOR THIS INTERVIEW. A COUPLE WILL JOIN US AFTER THIS INTERVIEW.ONE OF THEM HAD THIS QUESTION, AND I THINK IT'S A PERTINENT QUESTION HERE. YOU'RE FAMOUS NOW, FAMOUS MEMO THAT CAME OUT EARLIER IN THE YEAR, IN WHICH YOU SAID YOU'RE ESSENTIALLY ON A BURNING PLATFORM AT NOKIA AND HAD TO DO SOMETHING SOONER RATHER THAN LATER BECAUSE OF THE EROSION OF YOUR MARKET SHARE. THE QUESTION THEY BRING UP, THESE ANALYSTS IS, YOU HAVE YET TO JETTISON THE LEADERSHIP THAT YOU WERE HIGHLY CRITICAL OF THAT CAME BEFORE YOU THAT GOT YOU INTO THIS PREDICAMENT YOU STILL HAVE THOSE SAME GUYS AROUND AND YOU ARE EXPECTING THEM TO MAKE THIS TRANSITION TO THE NEW WINDOWS OPERATING SYSTEM. THEY'RE WONDERING WHY YOU HAVEN'T BROUGHT IN NEW MANAGEMENT TO MAKE THIS TRANSITION?
ELOP: SO, IN FACT, THERE HAVE BEEN A NUMBER OF SENIOR MANAGEMENT CHANGES. IF YOU LOOK AT THE TABLE AT WHICH I SIT IN TERMS OF THE LEADERSHIP OF NOKIA TODAY, OF THE 14 PEOPLE SITTING AT THAT TABLE WITH ME ON A REGULAR BASIS. SEVEN ARE NEW PEOPLE FROM EITHER OUTSIDE OR INSIDE COMPANY IN DIFFERENT ROLES AND SEVEN OF THEM ARE PEOPLE WHO HAVE BEEN WITH US FOR SOME TIME. ITS A NICE MIX OF THE TALENT. MY FUNDAMENTAL BELIEF IS THAT PEOPLE WILL SUCCEED OR FAIL IN THE CONTEXT OF THE LEADERSHIP THAT THEY'RE BEING PROVIDED. MY SPECIFIC LEADERSHIP IS ONE OF VERY AGGRESSIVE DRIVEN RESULTS ORIENTATION, AND WHAT THEY'VE HEARD ALSO IS THERE'S ACCOUNTABILITY. FOR EXAMPLE, WITH SOME OF THE CHALLENGES WE FACED MOST RECENTLY AND ANNOUNCED AS IT RELATES TO CHINA, THAT'S RESULTED IN MANAGEMENT CHANGES IMMEDIATELY.I'M NOT AFRAID TO MAKE THE HARD DECISIONS BUT I AM ALSO WILLING TO PUT PEOPLE IN ROLE THAT I BELIEVE THEY CAN BE SUCCESSFUL IN, IN MY MANAGEMENT STYLE.
FORTT: SMART PHONE SUCCESS IS THIS ESSENTIAL TO YOUR FINANCIAL RESULTS GOING FORWARD PARTICULARLY ON THE MARGIN, CRACKING NORTH AMERICA, SOMETHING NOKIA FAILED TO DO IN THE PAST IS KEY TO THAT.PART OF WHY YOU'RE SITTING IN THE CHAIR NOW IS KEY TO THAT. CAN YOU GIVE SOME SPECIFICS ON HOW YOU THINK YOU CAN DO THAT IN WAYS YOUR PREDECESSORS WEREN'T ABLE TO?
ELOP: WHAT WE CAN DO IN NORTH AMERICA FIRST OF ALL, LISTEN CAREFULLY TO THE CONSUMERS IN NORTH AMERICA. WHAT IS IT THAT THEY WANT THAT'S DIFFERENT THAN THE MARKETS WHERE WE'VE TYPICALLY BEEN MOST SUCCESSFUL?IT IS THE CASE IN 2004, NOKIA HAD SOMEWHERE BETWEEN 30 AND 40% MARKET SHARE IN THE UNITED STATES. JUST SEVEN YEARS AGO. YET AT A CERTAIN POINT WE STOPPED LISTENING AND DECIDED, NO.OUR INTERESTS WERE ELSEWHERE.WE WEREN'T LISTENING TO THE CONSUMERS THE WAY WE NEEDED TO DO SO. WITH THAT LISTENING, WITH THE FOCUS ON THE CRITICAL OPERATORS IN THIS COUNTRY, WHO CONTROL A GREAT DEAL OF THE ACTIVITY AND ENVIRONMENT.WE BELIEVE WE CAN BE SUCCESSFUL. THIS IS AN EXAMPLE OF THAT. OUR FIRST WINDOWS PHONE PRODUCTS ARE DESIGNED AND PUT TOGETHER HERE IN CALIFORNIA WITH THE U.S.MARKET VERY MUCH IN MIND.
FORTT: ARE YOU GOING HAVE ENOUGH OF THEM? SAMSUNG IS A GOLD STANDARD NOW IN NORTH AMERICA.THEY JUST PUT OUT A HECK OF A LOT OF PHONES IN NORTH AMERICA. MORE THAN ANYBODY ELSE. WILL YOU BE ABLE TO PUT OUT THE VOLUMES TO SERVE THE VARIOUS CUSTOMERS IN YOUR FIRST ROLLOUT -- HOW MANY ARE YOU GOING TO HAVE?
ELOP: SO I AM GOING TO GIVE YOU TWO ANSWERS FOR THAT, JON. FIRST OF ALL, IT'S NOT ABOUT THE NUMBER OF PHONES YOU CRANK OUT. THROWING A BUNCH OF PHONES AT THE WALL TO SEE WHAT STICKS IS NOT THE ANSWER. IT'S ABOUT QUALITY.IT'S ABOUT PRECISION.IT'S ABOUT A GREAT DESIGN A WONDERFUL USER EXPERIENCE. THOSE ARE THE THINGS THAT WE'RE MOST FOCUSED ON NOW THAT BEING SAID, TO ANSWER YOUR QUESTION SLIGHTLY DIFFERENTLY, NOKIA HAS A LONG HISTORY OF SERVING CUSTOMERS AT ALL PRICE POINTS. SOMETHING WE ABSOLUTELY INTEND TO CONTINUE TO DO USING WINDOWS PHONE AS OUR PLATFORM TO DO SO.
GRIFFITH: LAST QUESTION FROM ME, SIR. I RARELY ASK A CEO THIS QUESTION.GIVEN THE RAPID EROSION OF YOU CURRENT BUSINESS FOR THE SIMBIEN PLATFORM PHONES AND WHAT ITS DONE TO YOUR STOCK PRICE. TALK TO SHAREHOLDERS NOW TRYING TO HANG IN THERE.WHY SHOULD THEY HANG IN THERE WAITING FOR THE WINDOWS OPERATING SYSTEM, EVEN AS YOUR CURRENT BUSINESS DETERIORATES AS RAPIDLY AS IT IS? ONE OF THE ANALYST WE SPOKE TO SAID BASICALLY AT THESE PRICES YOUR PHONE BUSINESS HAS NO VALUE TO SPEAK OF AND EVEN YOU ADMITTED YOUR OPERATING MARGINS ARE NOW BASICALLY FLAT YOU'RE GIVING THE PHONES AWAY. SO WHY SHOULD ANYBODY WANT TO OWN YOUR STOCK BETWEEN NOW AND THE TIME YOU'RE ABLE TO INTRODUCE THESE WINDOWS OPERATING PHONES?
ELOP: CLEARLY WE ARE FOCUSED BOTH IN THE NEAR-TERM IN DAY-TO-DAY EXECUTION AS WELL AS THE IMPLEMENTATION OF OUR NEW STRATEGY USING WINDOWS PHONE. THE REASON TO OWN THE NOKIA STOCK TODAY IS TO RECOGNIZE THAT NOKIA IN ITS 146-YEAR HISTORY HAS REPEATEDLY GONE THROUGH THESE PATTERNS OF HAVING GREAT SUCCESS, MARKET CONDITIONS CHANGE, AND THEN WE HAVE TO CHANGE COURSE AND EXECUTE EVEN BETTER AND MORE STRONGLY THAN BEFORE. THAT'S THE PATH WE'RE ON TODAY.AND THAT'S WHY WE HAVE GREAT HOPE FOR THE FUTURE OF NOKIA.
FORTT: THANKS, STEVE.
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