Nokia Memo Makes MeeGo A ‘Burning’ Question

Nokia is standing on a “burning platform”, according to an internal memo to employees from chief executive Stephen Elop, which hints that Nokia may change operating system allegiances and even put its MeeGo operating system on hold.

In a memo leaked to technology blog Engadget, just days before Elop faces investors at a Nokia  Capital Markets day, the chief executive lamented Nokia’s inability to keep up with rivals Apple and Google, saying its MeeGo platform is “not arriving quickly enough”, and described Symbian as “an increasingly difficult environment in which to develop to meet the continuously expanding consumer requirements”.

Nokia has faced criticism for losing its way in smartphones, and Elop seems to agree: his memo likens the company’s position to that of a man on a burning oil rig faced with certain death, or a 30m drop into icy water.

“While competitors poured flames on our market share, what happened at Nokia? We fell behind, we missed big trends, and we lost time,” wrote Elop (above). “At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.

The chief executive went on to say that Nokia has failed to produce a device that can compete with Apple’s iPhone, and expressed disbelief at the speed at which Android phones had overtaken Nokia’s worldwide market share.

MeeGo a non-starter?

The memo suggests that drastic action will be taken, but is not specific about what that should be. It backs up comments made by Elop during Nokia’s disappointing Q4 2010 financial results, in which he hinted that the company was considering adopting a new operating system.

In a slightly enigmatic aside, Elop also suggested in his memo that MeeGo – formed last year by the merger of Nokia and Intel’s Linux-based platforms Maemo and Moblin – could be dead in the water, simply arriving too late to be of any use.

“We have some brilliant sources of innovation inside Nokia, but we are not bringing it to market fast enough,” he said. “We thought MeeGo would be a platform for winning high-end smartphones. However, at this rate, by the end of 2011, we might have only one MeeGo product in the market.”

Last week it was reported that Elop had been urged to dump the MeeGo project, in favour of Windows Phone 7, by analyst Adnaan Ahmad from London-based Berenberg Bank. In a letter to the executive, Ahmad described MeeGo as “the biggest joke in the tech industry”. He also advised Nokia to move Symbian to the low-to-mid-range smartphone market as quickly as possible.

Joining a new ecosystem?

“Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem,” wrote Elop in the memo. “This means we’re going to have to decide how we either build, catalyse or join an ecosystem.”

He finished by saying it was time for Nokia to take “a bold and brave step into an uncertain future”. This remark, and his suggestion that Nokia might “join” an ecosystem, are being seem as evidence that Nokia will adopt Windows Phone 7, or possibly Android.

Elop, who joined Nokia from Microsoft in September 2010, will be heading Nokia’s Capital Markets Day on 11 February, where he is expected to unveil his strategy to investors. Some analysts predict that Nokia will still show off the next MeeGo device at the event, or in Barcelona next week at Mobile World Congress.