« Burning platform », le mémo de Stephen Elop (PDG Nokia)


 Le 09/02/11

Voici un évènement qui, d’après moi, annonce un tournant majeur dans l’histoire de Nokia. La firme va mal, depuis la sortie de l’iPhone c’est la dégringolade, chute amplifiée par l’arrivée d’Android et son incroyable ascension ces derniers mois.

Le 11 Février se tient le Nokia Capital Markets Day à Londres, une journée dédiée stratégie et analyse financière. Nous savions que le 11 serait une date très importante pour Nokia, à la veille du MWC 2011, mais l’évènement a pris en ampleur suite à la publication d’un mémo interne rédigé par le PDG de Nokia, Stephen Elop, intitulé « Burning platform ».

Le PDG fait référence à une plateforme pétrolière en feu et raconte l’histoire d’un homme qui a dû prendre la décision la plus importante de sa vie, sauter de la plateforme dans les eaux glacées ou reste sur la plateforme et mourir brûlé. L’homme a finalement décidé de sauter, a survécu et a pu raconter son histoire. Cet homme, aujourd’hui et d’après Elop, c’est Nokia. La firme doit maintenant prendre une décision, la décision qui déterminera le futur du géant du mobile en chute libre.

Le mémo en question est réellement puissant, je vous invite à le lire en fin d’article. Voici quelques commentaires et morceaux choisis.

Elop commence par raconter son histoire de plateforme en feu puis conclut par :

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


Ensuite, il explique de ces derniers mois, il a écouté, appris, des actionnaires, opérateurs, développeurs, fournisseurs ainsi que des employés de Nokia et que ce mémo est le « compte rendu » de ces quelques mois : ils se tiennent sur une plateforme en feu et les explosions responsables de la situation sont multiples.

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


Elop explique la concurrence est rude est qu’elle évolue plus rapidement que prévu. Il commence par Apple, qui a redéfini le marché du smartphone avec son iPhone et a réussi à attirer les développeurs dans son écosystème fermé mais puissant. Le PDG aborde ensuite les parts de marché d’Apple dans le mobile et conclut par une constatation : Apple possède aujourd’hui le segment haut de gamme.

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.


Le PDG aborde ensuite Android, qui en deux années seulement a attaqué le marché haut de gamme, attiré des développeurs et s’en prend maintenant au segment moyenne gamme avec des appareils en dessous de 100€.

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.


Finalement, il y a le segment entrée de gamme, initialement largement occupé par Nokia, qui a vu depuis 2008 un nombre impressionnant de constructeurs de la région de Shenzhen en Chine proposer des terminaux aux prix très bas. D’après certains analystes, ces constructeurs produisent à eux seuls près de 1/3 des mobiles vendus dans le monde et mangent les parts de marché de Nokia dans les pays émergents.

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.


Par ces quelques lignes, Elop rappelle la difficile situation dans laquelle se trouve Nokia, le segment haut de gamme est attaqué et même occupé par Apple et, de plus en plus, par les smartphones Android, qui se retrouvent également en moyenne gamme et les parts de marché de Nokia sur le marché de l’entrée de gamme se réduisent comme peau de chagrin en raison des constructeurs chinois qui produisent des mobiles en moins de temps qu’il n’en faut pour « Nokia de réaliser une présentation Powerpoint » (citation du mémo, dixit un employé de la firme, sous un ton à moitié humoristique à moitié réaliste).

Voici d’ailleurs une phrase qui résume bien la situation, de façon dure et franche, mais réaliste :

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.


Stephen explique ensuite que Nokia est capable d’innover mais ne le fait pas assez rapidement, exemple avec MeeGo, plateforme très prometteuse chez Nokia mais qui tarde à arriver. D’après Elop, à ce rythme, « fin 2011 il n’y aura qu’un seul mobile équipé MeeGo dans notre catalogue ».

Après MeeGo, il aborde Symbian. Qui « a prouvé ne pas être compétitif sur certains marchés leaders comme celui de l’Amérique du Nord. De plus, Symbian a prouvé qu’il était un environnement de développement difficile » dans lequel il est presque impossible d’arriver à combler les besoins grandissants des utilisateurs. « Si Nokia continue [dans cette direction] comme avant, nous nous retrouverons de plus en plus en retrait, alors que nos concurrents continueront d’avancer encore et toujours ».

Elop affirme ensuite que le pire dans cette histoire, c’est que Nokia ne combat pas avec les bonnes armes, essaie de riposter mobile par mobile alors qu’aujourd’hui, « la bataille des appareils s’est transformée en guerre des écosystèmes, qui incluent pas seulement le matériel et le logiciel, mais aussi les développeurs, les applications, l’e-commerce, la publicité, la recherche, les applications sociales, les services géolocalisés, les communications unifiées et beaucoup d’autres choses ». Stephen a raison, j’ai envie de dire que c’est ce que Nokia a essayé de faire depuis 2009 avec Ovi, sans succès majeur.

Il est temps de prendre une décision, la concurrence ne prend pas des parts de marché avec des mobiles mais avec des écosystèmes entiers :

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.


Hier, les notations de crédit de Nokia A long term et A-1 short term (notations A et A-1 sur long et court terme) on été remises en question car Standard & Poor’s doute de la compétitivité de la firme. Pour ce qui est des consommateurs, la réputation de Nokia est largement moins bonne qu’avant, notamment en Angleterre où « seulement 1 personne sur 5 préfère Nokia aux autres marques ». Ceci est valable dans la plupart des marchés où Nokia est traditionnellement leader.

Elop termine en expliquant qu’il a cherché à comprendre d’où venait le problème durant ces derniers mois et que la firme est prête à aller de l’avant. « Le 11 Février, Nokia annoncera sa nouvelle stratégie, qui sera un gros effort pour transformer l’entreprise ».

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.


Préparez-vous, donc, à une grosse annonce le 11 Février, avec potentiellement de belles présentations Dimanche 13 Février à la veille du MWC. Nous serons sur place pour couvrir la conférence. Pour le coup, je vais m’abstenir de faire des suppositions ou prévisions, nous n’avons que quelques jours à attendre, je préfère m’en tenir aux faits.


Le mémo complet « Burning platform » :

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.

via engadget

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