Nokia CEO Stephen Elop is living in the fast lane, and Wall Street wouldn't have it any other way.

In just four months, the former Microsoft (MSFT) executive hired to turn around the stumbling cell phone giant, has slashed its workforce by 1,800 and, on Friday, announced a bold strategy to dump its market-share-losing mobile operating system, Symbian, as well as to curtail its focus on its MeeGo-Intel (INTC) partnership.

Instead, Elop is virtually putting all his eggs in one basket: Microsoft's Windows Phone 7 operating system. That bold move and other steps he has taken to date since arriving in September have earned him a B+ grade from industry analysts.

"The primary reason is that in a short period of time, he has digested the company's position, assessed its weaknesses and shortcomings, developed a strategy and taken a bold step," says Charles Golvin, a Forrester Research analyst. "Whether it's the right step will be proven out over time."

Symbian held 37.6% of the global mobile operating system market last year, while Microsoft had 4.2%, according to research firm Gartner. Over the years, Symbian's market share has been steadily declining, as developers chose to write fun and exciting applications for Android and the iPhone's iOS, analysts said.




'Burn the Ships and Focus on Android'

Elop's strategy, however, is not a blind one. Motorola Mobility (MME) CEO Sanjay Jha took similar measures in 2008, after he arrived at the down-and-out cell phone maker, which was using Symbian and other operating systems at the time. Jha, in a matter of months after his arrival from chipmaker Qualcomm (QCOM) zeroed in on Google's (GOOG) Android, according to a New York Times report.

With a keen awareness that he had only a year to deliver a competitor to Apple's iPhone in order to appease Wall Street and investors, Jha told Motorola's Verizon Razr project manager to "Burn the ships and focus on Android," according to the Times.

Fast-forward a couple years to Elop's "burning platform" memo, which likened Nokia's reliance on Symbian to the condition of a worker trapped on a burning oil rig who must decide between the lesser of two evils -- staying on or jumping off -- according to a Wall Street Journal copy of the memo.

"This is the same exact situation Sanjay came into two or three years ago. He needed to respond to the iPhone, but Motorola was a big company comfortable with the way it had always done things and not willing to adapt," says Jonathan Goldberg, a Deutsche Bank analyst. "Sanjay made a few important decisions, cut costs, focused on Android and put everything into one basket with Android. At least Nokia wasn't as bad off as Motorola when they did this. Nokia has lost a lot of market share, but at least it's vaguely profitable and still the No. 1 handset maker."

Planned Transition Period Is Too Long


Goldberg also applauded Elop for initiating fast changes. However, the analysts note that the true test of Elop's reign will be whether he can successfully execute on his strategy to deliver net sales growth in Nokia's devices and services that exceed the market's performance, and boosting its operating margins to above 10% in the next two years.

Elop's big plans make the coming years a crap shoot for Nokia's investors, which may have contributed to the stock plummeting as much as 14.3% in intraday trading to $9.32 a share Friday. Nokia noted in its announcement that it expects its transition period to last two years, which analysts say is too long in the smartphone market.

"Two years is practically an eternity in the smartphone market," Golvin says. "I understand the time needed to transition the product portfolio and the hard shift for their software and hardware investments. But. . .that window may test the patience of Nokia investors."





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inzharman5

How is it that just anybody can write a blog and get as popular as this? Its not like you've said anything incredibly impressive –more like you've painted a pretty picture over an issue that you know nothing about! I don't want to sound mean, here. But do you really think that you can get away with adding some pretty pictures and not really say anything?
http://www.onlinecheck.com/small_business_loans.html-

February 14 2011 at 2:31 AM Report abuse rate up rate down Reply
Tim

Years ago Motorola made the most popular pager worldwide in Tennessee. The company I work for just got me a new motorola phone, its made in China. I bet those 1800 jobs wre not eliminated but sent overseas. We have become a nation of consumers. These jobs go overseas so the bottom line looks better and the big wigs get huge bonuses. These products could be produced at a profit in the US, just not profit big enough for the stock prices to be driven up reulting in the huge bonuses. Soon there will be no solvent consumers to purchase the foriegn products, then what?

February 13 2011 at 8:58 AM Report abuse +5 rate up rate down Reply
3 replies to Tim's comment
Devon

Wow, I love buying products from someone who has cut his force and once again can pay more to the stockholders. Bye

February 12 2011 at 9:48 PM Report abuse +1 rate up rate down Reply
1 reply to Devon's comment
hello steve

THE STOCKHOLDERS OWN THE CO.,THEY ARE THE ONES THAT EMPLOY THE WORK FORCE TO MAKE MONEY NOT BECAUSE THEY ARE NICE.TRY AND GET PEOPLE TO INVEST IN A CO. WITH
A BUSINESS MOTO OF ( WE WON'T MAKE MONEY BUT WE ARE NICE)

February 13 2011 at 9:07 AM Report abuse rate up rate down Reply
Kat

Way to go Nokia, 1800 more people unemployed.

February 12 2011 at 1:36 PM Report abuse +4 rate up rate down Reply
1 reply to Kat's comment
hello steve

PEOPLE START CO'S TO MAKE MONEY, IN THE PROCESS THEY HIRE PEOPLE TO HELP THEM.
WHEN THEY DON'T MAKE MONEY THEY GO OUT OF BUSINESS AND EVERYONE LOSES THEIR JOB. P/S DOES NOT APPLY TO GOV'T

February 13 2011 at 8:58 AM Report abuse -1 rate up rate down Reply