Last week I flew to Dubai to attend a roundtable discussion with Stephen Elop, the new Nokia president and CEO. He was in the region to rally Nokia’s human resources during this period of uncertainty for the company, before the restructuring and possibly tens of thousands of layoffs begin. The man is the consummate executive, suited up, buttoned down and nicely media trained thanks to his years at Microsoft.
The roundtable took the traditional format with Elop making an opening statement during which he briefly discussed Nokia’s strategy moving forward. He emphasized the importance of the company’s “winning smartphone strategy,” which is now focused on Microsoft Windows Phone. He mentioned that the mobile giant plans to focus as well on the “several billion people in the world today who are within cell phone signal range and who have not yet had their first Internet experience.” He also spoke about the importance of Nokia continuing to take a “leadership mindset” and invest in “future disruptions,” meaning technologies for the future of mobile.
“We’re in a period of ambiguity” said Elop. “There’s certain information as it relates to our operating expenses and associated reduction to head count in the company that we have not provided an answer to, but will soon. There’s ambiguity about when we will deliver our first Windows Phone device and I assure you we’ll announce that very close to when those devices are available. In the meantime it’s ambiguous and that’s something that we’re all just dealing with. And then of course there’s ambiguity about what happens to the business in the meantime. As you go through this transition, how well will you execute and so forth. Of course it becomes incumbent on us to demonstrate that we will execute well and deliver well against our commitments. I’ve had a great deal of very positive feedback from our large shareholders about the importance of having a clear strategy and that we’ve made some very good decisions.”
Elop stated that despite Nokia’ strong presence in the Middle East and Africa (MEA) region, he still considers it to be an area of significant growth. He believes that this is because the company historically has been interested in selling the “Nokia experience and not just phones.”
In terms of future investment in the region, he wouldn’t give any monetary figure but advised that, “Regions that have the opportunity for disproportionate growth attract disproportionate amounts of spending in order to support those regions and the Middle East is a good example of that.”
The roundtable discussion moved forward very predictably with journalists throwing out their questions and Elop providing nicely crafted, well-rehearsed responses. To make the proceedings a little more fun, I had planned that we’d play a bit of “Show and Tell.” I would “show” and ask Elop to “tell.”
When my turn came, I took from my coat pocket a chunky, brick of a handset, held it up and asked Elop what it was, “It’s one of the original, older Nokia devices,” he guessed. He claimed that he couldn’t tell what it was from across the table. It was a disappointing response. The handset on display was the Nokia E90, part of Nokia’s top of the line Communicator series. It was considered to be the ultimate business tool back in 2007, retailing at more than SR3,000 when it came to the market. Any executive in the Middle East would know the handset on sight and some are still using it. Elop couldn’t even say how long it had been part of Nokia’s portfolio.
Elop, an American executive, would have been unfamiliar with the E90 in a business setting due to Nokia’s poor penetration in the US market. But that’s really no excuse. His company has just brought out the E7 — the successor to the E90. One would think that Elop would have some minimal understanding of Nokia’s product line — especially since he’s planning to tear the guts out of it at the high end where it will impact customers of E-Series devices.
However, Elop didn’t think that Symbian’s demise (the operating system running Nokia’s handsets), would have much impact on consumers. He is of the opinion that people are interested in great experiences from Nokia and that the platform supporting the experience is of no concern to them.
“There are consumers who are not excited about our next generation of devices and what we’re doing,” Elop remarked. “Let’s be clear. What we are going to deliver to the marketplace is a Nokia experience. We’re going to use some software from Microsoft but for tens of millions of people around the world, the only thing they will know is that this is a Nokia experience…They’ll look at a Nokia experience, and they’ll have no idea whether it’s Microsoft, this, that, or the other thing. That won’t be a part of the experience. It will be a Nokia experience that we’ve taken as a base experience, differentiated in the regions around the world as we have always done, and delivered something that’s great.”
One of the new ways consumers may be able to have a Nokia experience in the future, could be on a tablet device. Elop wouldn’t commit to announcing a Nokia tablet but he advised that for the company’s success moving forward, the hardware options must grow beyond smartphones. What might consumers expect in a Nokia tablet computer?
“With the new relationship with Microsoft we are now presented with multiple options in terms of tablets,” Elop explained. “For example there’s opportunities within the Microsoft operating system environment to take advantage of and there’s also work that has been ongoing within the company to take advantage of. My challenge to the team is to continue the work. I need this to go forward because the ecosystem opportunity is much broader than just smartphones, but it needs to be uniquely Nokia. It needs to stand for something that’s different. I’m not just talking about the shape of the device, but fundamentally what’s the value proposition that differentiates our strategy from what others are doing.”
