It’s an interesting move by Nokia to even reveal that it is considering strategy changes in the smartphone segment. The company said it had some gems on which it could build its future success. Nokia has also indicated its intention to partner with another company.
Nokia’s chief executive officer Stephen Elop told the Wall Street Journal’s tech blog AllthingsD that the phone industry has changed and that Nokia needs to adapt quickly to the new situation. The company’s high end devices will run on its MeeGo operating system, which is based on Linux and was developed in partnership with Intel. Details regarding Nokia’s MeeGo products will be revealed on February 11 when Elop will meet investors.
The statements from Stephen Elop are being watched with great care because he is a former Microsoft executive who headed the business division there. Before joining Microsoft, he was the chief operating officer of Juniper Networks. Stephen Elop succeeded Olli-Pekka Kallasvuo after the performance of Nokia nosedived under him. The appointment of Stephe Elop was a surprise because he was a Canadian national whereas the Nokia management was dominated by Finnish executives before him.
Nokia believes that the devices market is evolving in a way to make developers and the ecosystem more important for high end devices; whereas distribution, scale and cost are significant for low end devices. The term ecosystem refers to a smartphone platform that is conducive to large scale app development; has a store where it sells apps; and tends to tie down users because they get accustomed to the apps on one platform and don’t want to change to another. Nokia either needs to create an ecosystem of its own or join one — such as by making an Android smartphone since Android is a well developed ecosystem.
Elop admitted that Nokia has faced a series of disappointments in the US market and that the company should partner (with a device platform) that creates possibilities for Nokia in that country.