Investors aren’t happy with Nokia’s performance and want a change of direction, but Paul Withers argues the criticism is slightly harsh
If ever there was evidence of how fast our industry changes, look no further than the drama unfolding at Nokia.
The manufacturer looked to be on the road to recovery, but shareholders are not impressed, questioning the tactics used by president and CEO Stephen Elop over the past two years.
Nokia sold 5.6 million Lumia smartphones in Q1, up 27 per cent quarterly, and predicted more growth in Q2.
Elop said Nokia was executing its strategy with urgency and said that people are responding positively to its Lumia portfolio.
However, he still found himself in the firing line from shareholders at Nokia’s AGM in Helsinki earlier this month, who expressed concern his strategy of building Nokia around the Windows Phone 8 operating system was not working. One shareholder said:
“The road to hell is paved with good intentions. Please switch to another road.”
His absence from the recent global launch of the new Lumia 925 – the firm’s new flagship devices and biggest launch of the year to date – was noticeable.
Whatever the reasons, it’s hard not to defend Elop against some of this criticism. In February 2011, Nokia decided to start using Microsoft’s OS in its smartphones, rather than joining the ever growing list of Android users to retain some form of differentiation.
The move took guts, but shareholders, ultimately, are only interested in safeguarding their investment.
Nokia, and Elop in particular, needs the Lumia 925 to hit the ground running when it goes on sale next month. Anything less than a successful launch will halt Nokia’s progress and increase pressure on Elop from shareholders about continuing in his position.