NOKIA PLAN B

We are a group of nine young Nokia shareholders. All of us have worked with Nokia in different capacities in the past. We plan to challenge the company’s strategy and partnership with Microsoft in the next Annual General Meeting scheduled for May 3, 2011.

If you elect us to a majority in the Nokia Board of Directors we will pursue the following agenda:

Return the company to a strategy that seeks high growth and high profit margins through innovation and overwhelmingly superior products with unrivaled user experience.
Maintain ownership and control of the software layer of the Nokia products. Software is where innovation, differentiation and shareholder value can most easily be created.
Revamp hiring strategy to target the top young software talent from around the world. Only if Nokia is able to attract and keep the best talent in the industry it will be able to generate the level of innovation that is needed to achieve sustained growth and consistently high profit margins.
Dramatically increase efficiency by eliminating outdated and bureaucratic R&D practices like geographically distributed software development and outsourcing.
Avoid at all cost becoming a poorly differentiated OEM with only low margin, commodity products that is unable to attract top software talent and cannot create shareholder value though innovation.
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If you elect us to a majority in the Nokia Board of Directors we will take the following concrete actions:

Immediate discharge of Stephen Elop from his duties as President and CEO of the company. Appointment of a new CEO with an international mobile industry background. The new CEO will be committed to carry on the rest of the actions listed below.
Restructure alliance with Microsoft as a tactical exercise focused primarily at the North American market. Release one or two Windows Phone devices under a Nokia sub-brand. Only if carrier acceptance, sales volumes and profit margins are satisfactory, consider releasing more WP devices and make them available in Europe. Windows Phone will not be the primary development platform for Nokia. The Nokia phones with Windows Phone operating system will simply take advantage of the existing developer tools and application ecosystem already put in place by Microsoft.
MeeGo will be Nokia’s primary smartphone platform. This is where the bulk of the innovation will happen. If MeeGo does not bring great devices to market at an accelerated pace, this strategy will not work. MeeGo smartphones and tablet devices will offer overwhelmingly superior experiences and applications than iOS and Android based competitor products. To reduce time to market, all MeeGo R&D will be done in-house and in a single geographical location. If necessary, suspend cooperation with Intel and concentrate resources on innovation and releasing new Nokia MeeGo devices to market faster.
Increase the lifespan of Symbian to a minimum of 5 years. Reap the profits of the existing market share and consumer preference that Symbian already enjoys in Europe and Asia. Increasingly use Symbian to target mid-tier and feature phone segments. Up-sell existing Symbian users to MeeGo. Focus Symbian efforts in specific countries in Europe, Asia and Latin America where Nokia and Symbian enjoy a high level of consumer goodwill and can be sold at healthy margins.
Developer strategy based on Qt with primary focus on MeeGo, but providing a credible developer story for Symbian. Enable developers to make money by targeting the huge Symbian installed based while simultaneously offering their best user experience on the MeeGo platform. All this with a common developer ecosystem that allows writing and releasing software for both Meego and Symbian with minimal interoperability work.
End of distributed R&D. Transition to an R&D setup where 90% of all Nokia R&D takes place in only two geographical locations. One of them will be in Finland and the other will be defined later. There will be no more R&D projects with resources in multiple cities and different time zones. Only small tactical software projects will be allowed to take place outside two main R&D locations.
End of R&D outsourcing. Bring all core software and hardware development in-house. Immediate end to outsourcing structures where there are multiple layers of Nokia project managers and subcontractor project managers between product managers and the software developers (in some cases up to 90% of the team is management overhead). This action implies substantial personnel layoffs in Finland and other R&D locations worldwide as well as hiring of key external talent and possibly tactical company acquisitions.
Leadership team shakeup. Immediate discharge of Tero Ojänpera, Niklas Savander and Mary McDowell from all their duties with the company. Other members of the Nokia Leadership Team may be discharged pending individual reviews with the Board of Directors. Discharged members of the Nokia Leadership team to be replaced with internal and external talent.
Aggressively recruit young software talent from top universities. Nokia Recruiting to actively visit top universities worldwide to screen and and invite top students for interviews in Nokia R&D locations. Establish a credible and rewarding technical career progression path in Nokia (to avoid the best talent leaving the company or becoming management overhead). Offer internationally competitive salaries to new talent (if necessary, significantly above local market salaries). Establish Nokia as a company where the best and the brightest want to work.
Specific further actions related to the S40 platform, the Ovi services and the company’s marketing activities will be determined at a later stage.
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We will update this website with more specific information about this Plan B and about ourselves in the near future. We will also provide specific instructions on how you can support us and make sure this Plan B is approved during the next Nokia Annual General Meeting.

For now, if you are a Nokia shareholder or institutional investor and support this plan, please get in touch with us at investors (at) NokiaPlanB.com

An Letter From Nokia to Nokia

Hi all,

I read a mail from Stephen Elop, the CEO of Nokia sent to all the Nokia employees. I found it very interesting so thought i should post it.


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 platform's edge. When he looked down over the edge, all he could see were the dark, cold, foreboding Atlantic waters.

As the fire approached him, the man had mere seconds to react. He could stand on the platform, and inevitably be consumed by the burning flames. Or, he could plunge 30 meters in to the freezing waters. The man was standing upon a "burning platform," and he needed to make a choice.

He decided to jump. It was unexpected. In ordinary circumstances, the man would never consider plunging into icy waters. But these were not ordinary times - his platform was on fire. The man survived the fall and the waters. After he was rescued, he noted that a "burning platform" caused a radical change in his behaviour.

We too, are standing on a "burning platform," and we must decide how we are going to change our behaviour.

Over the past few months, I've shared with you what I've heard from our shareholders, operators, developers, suppliers and from you. Today, I'm going to share what I've learned and what I have come to believe.

I have learned that we are standing on a burning platform.

And, we have more than one explosion - we have multiple points of scorching heat that are fuelling a blazing fire around us.

For example, there is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.

In 2008, Apple's market share in the $300+ price range was 25 percent; by 2010 it escalated to 61 percent. They are enjoying a tremendous growth trajectory with a 78 percent earnings growth year over year in Q4 2010. 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.

And then, there is Android. In about two years, Android created a platform that attracts application developers, service providers and hardware manufacturers. Android came in at the high-end, they are now winning the mid-range, and quickly they are going downstream to phones under €100. Google has become a gravitational force, drawing much of the industry's innovation to its core.

Let's not forget about the low-end price range. In 2008, MediaTek supplied complete reference designs for phone chipsets, which enabled manufacturers in the Shenzhen region of China to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally - taking share from us in emerging markets.

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

The first iPhone shipped in 2007, and we still don't have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.

We have some brilliant sources of innovation inside Nokia, but we are not bringing it to market fast enough. 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.

At the midrange, we have Symbian. It has proven to be non-competitive in leading markets like North America. Additionally, Symbian is proving to be an increasingly difficult environment in which to develop to meet the continuously expanding consumer requirements, leading to slowness in product development and also creating a disadvantage when we seek to take advantage of new hardware platforms. As a result, if we continue like before, we will get further and further behind, while our competitors advance further and further ahead.

At the lower-end price range, Chinese OEMs are cranking out a device much faster than, as one Nokia employee said only partially in jest, "the time that it takes us to polish a PowerPoint presentation." They are fast, they are cheap, and they are challenging us.

And the truly perplexing aspect is that we're not even fighting with the right weapons. We are still too often trying to approach each price range on a device-to-device basis.

The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren't taking our market share with devices; they are taking our market share with an entire ecosystem. This means we're going to have to decide how we either build, catalyse or join an ecosystem.

This is one of the decisions we need to make. In the meantime, we've lost market share, we've lost mind share and we've lost time.

On Tuesday, Standard & Poor's informed that they will put our A long term and A-1 short term ratings on negative credit watch. This is a similar rating action to the one that Moody's took last week. Basically it means that during the next few weeks they will make an analysis of Nokia, and decide on a possible credit rating downgrade. Why are these credit agencies contemplating these changes? Because they are concerned about our competitiveness.

Consumer preference for Nokia declined worldwide. In the UK, our brand preference has slipped to 20 percent, which is 8 percent lower than last year. That means only 1 out of 5 people in the UK prefer Nokia to other brands. It's also down in the other markets, which are traditionally our strongholds: Russia, Germany, Indonesia, UAE, and on and on and on.

How did we get to this point? Why did we fall behind when the world around us evolved?

This is what I have been trying to understand. I believe at least some of it has been due to our attitude inside Nokia. We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven't been delivering innovation fast enough. We're not collaborating internally.

Nokia, our platform is burning.

We are working on a path forward -- a path to rebuild our market leadership. When we share the new strategy on February 11, it will be a huge effort to transform our company. But, I believe 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 behaviour, and take a bold and brave step into an uncertain future. He was able to tell his story. Now, we have a great opportunity to do the same.

Stephen.