Nokia: A crisis unfolding

A Stephen Elop memo gives a strong indication Nokia is in trouble, but how serious is the crisis?

These troubles may well have started when Apple launched the iPhone. When Steve Jobs' firm announced the device would change things forever, it wasn't lying.

The Cupertino company started a revolution in the industry and yet some competitors were not so sharp at recognising the paradigm shift, according to senior research analyst Rene Millman from Gartner.

"Any major player would be foolish to have ignored the smartphone revolution that Apple brought in four years ago," Millman told IT PRO.

"It caught Nokia on the hop as well as Microsoft. Both these giants didn't get what Apple was doing and Nokia still didn't appear to do so before today."

One major area Nokia will be considering is what OS to use. Symbian, although still widely used, has come under fire from various quarters and its declining market share only serves to reflect its falling popularity.

According to Millman, Symbian has had its day.

"Developers didn't much care for making apps on the platform," he added.

"Developers are governed by two things: is the platform popular and well-supported and is it relatively easy to develop software and code that can be sold easily?"

Apple and Google both understood these developer motivators, as perhaps have others, the analyst said.

"The other entrants understand this to differing degrees and this shows through when you look at handsets sold in the marketplace," he added.

A new start?

So where now? There have been plenty of rumours flying around about Symbian being replaced, even though Nokia has been fairly bullish about the platform in the past.

"Lots of people now expect Nokia to throw its lot in with Microsoft as their new CEO used to work there," Millman said.

"But I wouldn't rule out an Android-powered smartphone to make an appearance in the next few months."

So a new operating system could be in the works. But you may be forgiven for asking what happened to MeeGo?

Well, reports have indicated the software could be put on the backburner for some time, possibly indefinitely.

Citing two industry sources close to the company, Reuters reported that Nokia has ceased development of its first MeeGo-based smartphone. The company declined to comment on the situation.

This Friday will see the company host a strategy and financial briefing. It would come as no surprise if some fairly sweeping changes are made.

At least Elop has recognised the situation needs reversing and the coming months will be critical if Nokia is to continue as a major force in the smartphone segment.

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