When former Microsoft (Nasdaq: MSFT ) tech guru Stephen Elop took the reins of floundering telecom giant Nokia (NYSE: NOK ) , you'd think the changeover would have presented the perfect excuse to take Nokia in a new direction. Sorry, folks -- it ain't happening.
High-ranking Nokia managers are still pounding home the message that its MeeGo and Symbian platforms are the way forward, with MeeGo hitting the sweet spot for high-end phones and Symbian for low-cost models. There will be no Nokia phones based on Google's (Nasdaq: GOOG ) popular Android platform, and that's final.
While I can see the sense in protecting Nokia's pet projects and the substantial investments the Finns have made in them, it's never too late to admit that you're wrong and change tactics. MeeGo may or may not be the next megahit, but Android is already halfway there, and both platforms are fundamentally based on the same Linux technology. Never mind that we have yet to see the first actual product with MeeGo preinstalled, while Android is busy eating the global market-share lead Symbian built in the early days of smartphonery.
The mobile software market is getting crowded, and while I do appreciate any attempt to advance the state of the art, I don't think that direction will pay off for Nokia or its investors. It would be one thing if the company could claim wider profit margins from its software stakes, but that's not the case. If Nokia's slim margins are already more in line with a hardware company than a software one, why not just act more like a hardware company?
There's no reason why Nokia couldn't refocus on excellent hardware innovation and throw its lot in with a proven and progressive software platform. Well, except for corporate pride, of course. That's a lousy basis for this kind of major business decision, though.
Seven years ago, Nokia could have bought Apple (Nasdaq: AAPL ) with nothing but the cash on its balance sheet. But that was before the iPad, the iPhone, and at the very start of the iPod phenomenon. Now Apple could buy Nokia, if only to extinguish a rival. The company is getting marginalized almost as rapidly as BlackBerry builder Research In Motion (Nasdaq: RIMM ) -- but with the futures of a 25% bigger market cap and nearly 10 times as many employees at stake.
If Stephen Elop wants to take this sinking boat home, he needs to make some radical changes. Can you convince your underlings to go with Android, Steve? If not, I think you're doomed.