You may have seen the rounds of a supposed Memo circulating internally at Nokia from new, Canadian

CEO, Stephen Elop. a!elled "urning #latform, the sentiments of the memo echo the crisis Nokia faced
which Elop sees M$S% result in a change of !ehaviour from Nokia. &eal or not, it is the honest truth
a!out Nokia. 'aving followed Nokia from the ()s through the !right days of Sym!ian and early
smartphones, it has !een so frustrating to watch the awesome talent and innovation at Nokia dilute itself
and give the competition such an easy time.
*t seems Nokia will make a +$M#. , -ump they would not otherwise do, and never something we would
comprehend e.cept under the current circumstances of a platform !urning. *s /#0 the cold rough seas1
*s Sym!ian the !urning platform1 /hat2s Mee3o doing in all of this1 *s Mee3o the life!oat that actually
rescues the guy1 #erhaps all suggestions *2ve given is something else entirely.
Hello there,
There is a pertinent story about a man who was working on an oil platform in the North Sea. He woke up
one night from a loud explosion, which suddenly set his entire oil platform on fire. In mere moments, he
was surrounded by flames. Through the smoke and heat, he barely made his way out of the chaos to the
platforms edge. hen he looked down o!er the edge, all he could see were the dark, cold, foreboding
"tlantic waters.
"s the fire approached him, the man had mere seconds to react. He could stand on the platform, and
ine!itably be consumed by the burning flames. #r, he could plunge $% meters in to the free&ing waters.
The man was standing upon a 'burning platform,( and he needed to make a choice.
He decided to )ump. It was unexpected. In ordinary circumstances, the man would ne!er consider
plunging into icy waters. *ut these were not ordinary times + his platform was on fire. The man sur!i!ed
the fall and the waters. "fter he was rescued, he noted that a 'burning platform( caused a radical change
in his beha!iour.
e too, are standing on a 'burning platform,( and we must decide how we are going to change our
behaviour.
#!er the past few months, I!e shared with you what I!e heard from our shareholders, operators,
de!elopers, suppliers and from you. Today, Im going to share what I!e learned and what I ha!e come to
belie!e.
I ha!e learned that we are standing on a burning platform.
"nd, we ha!e more than one explosion + we ha!e multiple points of scorching heat that are fuelling a
bla&ing fire around us.
,or example, there is intense heat coming from our competitors, more rapidly than we e!er expected.
"pple disrupted the market by redefining the smartphone and attracting de!elopers to a closed, but !ery
powerful ecosystem.
In -%%., "pples market share in the /$%%0 price range was -1 percent2 by -%3% it escalated to 43
percent. They are en)oying a tremendous growth tra)ectory with a 5. percent earnings growth year o!er
year in 67 -%3%. 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.
"nd then, there is "ndroid. In about two years, "ndroid created a platform that attracts application
de!elopers, ser!ice pro!iders and hardware manufacturers. "ndroid came in at the high8end, they are
now winning the mid8range, and 9uickly they are going downstream to phones under :3%%. Google has
become a gravitational force, drawing much of the industrys innovation to its core.
;ets not forget about the low8end price range. In -%%., <ediaTek supplied complete reference designs
for phone chipsets, which enabled manufacturers in the Shen&hen region of China to produce phones at
an unbelie!able pace. *y some accounts, this ecosystem now produces more than one third of the
phones sold globally 8 taing share from us in emerging marets.
hile competitors poured flames on our market share, what happened at Nokia= !e fell behind, we
missed big trends, and we lost time. At that time, we thought we were maing the right decisions"
but, with the benefit of hindsight, we now find ourselves years behind.
The first i#hone shipped in $%%&, and we still dont have a product that is close to their
experience. Android came on the scene 'ust over $ years ago, and this wee they too our
leadership position in smartphone volumes. (nbelievable.
!e have some brilliant sources of innovation inside )oia, but we are not bringing it to maret
fast enough. !e thought *eeGo would be a platform for winning high-end smartphones.
+owever, at this rate, by the end of $%,,, we might have only one *eeGo product in the maret.
"t the midrange, we ha!e Symbian. -t has proven to be non-competitive in leading marets lie
)orth America. "dditionally, Symbian is pro!ing to be an increasingly difficult en!ironment in which to
de!elop to meet the continuously expanding consumer re9uirements, leading to slowness in product
de!elopment and also creating a disad!antage when we seek to take ad!antage of new hardware
platforms. "s a result, if we continue like before, we will get further and further behind, while our
competitors ad!ance further and further ahead.
"t the lower8end price range, >hinese #?<s are cranking out a de!ice much faster than, as one Nokia
employee said only partially in )est, 'the time that it takes us to polish a @ower@oint presentation.( They
are fast, they are cheap, and they are challenging us.
"nd the truly perplexing aspect is that were not e!en fighting with the right weapons. e are still too
often trying to approach each price range on a de!ice8to8de!ice basis.
The battle of devices has now become a war of ecosystems, where ecosystems include not only the
hardware and software of the de!ice, but de!elopers, applications, ecommerce, ad!ertising, search,
social applications, location8based ser!ices, unified communications and many other things. .ur
competitors arent taing our maret share with devices" they are taing our maret share with an
entire ecosystem. This means were going to have to decide how we either build, catalyse or 'oin
an ecosystem.
This is one of the decisions we need to make. In the meantime, we!e lost market share, we!e lost mind
share and we!e lost time.
#n Tuesday, Standard A @oors informed that they will put our " long term and "83 short term ratings on
negati!e credit watch. This is a similar rating action to the one that <oodys took last week. *asically it
means that during the next few weeks they will make an analysis of Nokia, and decide on a possible
credit rating downgrade. hy are these credit agencies contemplating these changes= *ecause they are
concerned about our competiti!eness.
>onsumer preference for Nokia declined worldwide. In the BC, our brand preference has slipped to -%
percent, which is . percent lower than last year. That means only , out of / people in the (0 prefer
)oia to other brands. Its also down in the other markets, which are traditionally our strongholdsD
Eussia, Fermany, Indonesia, B"?, and on and on and on.
+ow did we get to this point1 !hy did we fall behind when the world around us evolved1
This is what I ha!e been trying to understand. I belie!e at least some of it has been due to our attitude
inside Nokia. !e poured gasoline on our own burning platform. I belie!e we ha!e lacked
accountability and leadership to align and direct the company through these disrupti!e times. e had a
series of misses. e ha!ent been deli!ering inno!ation fast enough. ere not collaborating internally.
)oia, our platform is burning.
e are working on a path forward G a path to rebuild our market leadership. !hen we share the new
strategy on 2ebruary ,,, it will be a huge effort to transform our company. *ut, I belie!e that
together, we can face the challenges ahead of us. Together, we can choose to define our future.
The burning platform, upon which the man found himself, caused the man to shift his beha!iour, and take
a bold and bra!e step into an uncertain future. He was able to tell his story. )ow, we have a great
opportunity to do the same.
Stephen.