SAN DIEGO—Nokia CEO Stephen Elop took the stage at Qualcomm’s Uplinq conference Thursday, where he laid out a five-step plan to turn the company’s struggling smartphone business around.
Elop said Nokia had to impress consumers; create a comprehensive portfolio of devices covering various uses instead of a single stand-out product; support operators; broaden its device ecosystem with technologies like NFC; and drum up app developer support for Windows Phone 7.
“Manufacturers out there are doing their best work for Android… Windows Phone has been a second-place player for many of these manufacturers,” Elop said. “Windows Phone is the environment for which we will do our best work.”
Nokia faces an uphill battle to regain its dominance in the wireless industry. The company ditched its foundering Symbian platform in favor of Windows Phone 7 in February, but is still expected to have a difficult time competing with Apple and Android smartphones. Nokia will not begin releasing its own Windows Phone 7 devices until late this year.
While conceding that a long road lay ahead for Nokia, Elop struck an optimistic note in his speech. As laid out in his plan, Nokia plans to give operators incentive to sell its smartphones by creating new ways for them to make money off the apps, videos and games subscribers use on their devices.
The company is also working to woo developers. Nokia has relationships with 132 operators around the world for in-app carrier billing, which makes it easier for developers to make money off their apps. Elop said that in-app carrier billing remained a “very compelling thing” and pledged to provide developers with tools to make it easier to distribute and publish their apps.
“The developer community needs to embrace this ecosystem for it to achieve escape velocity,” Elop said.
Elop remained cagey about when Nokia would come out with a tablet. Even though he pledged to “broaden the ecosystem” of devices, Elop stopped short of announcing any definitive plans for a Windows-based tablet, saying the tablet market was overcrowded already.
Elop said that market conditions for tablets are “not yet optimized,” with devices currently on the market struggling to compete with “one tablet,” a reference to the wildly successful Apple iPad. Elop said the industry could expect to “see some interesting things” from Nokia in the tablet space, but suggested that the company would wait to launch a tablet until it was sure it would stand apart from the competition.
“I don’t just want to be tablet number 202,” Elop said. “We believe we have to do something that’s fundamentally differentiated.”
Elop also provided some details about Nokia’s decision to go with Windows Phone 7 instead of Android.
He said Nokia considered both Windows Phone 7 and Android when it realized Symbian had become too “fragile” to continue as its primary handset platform and MeeGo couldn’t be developed fast enough to keep pace with the market.
After lengthy discussions with both Microsoft and Google, Elop decided to choose Windows Phone 7 despite Android’s “winning trajectory.”
“Though there were a number of opportunities to differentiate with Android, our final assessment was that we would not be able to differentiate enough. It would be hard to stand out amongst them,” Elop said. “That’s a challenge that will be faced in the Android ecosystem.”
Elop said that Nokia’s decision to eschew Android also had an “attitudinal point.”
“It felt a bit like giving in,” he said. “There’s a strong attitude in the company that you don’t give in, you fight hard.”
A lot has changed at Nokia, including the company’s once-contentious relationship with Qualcomm. Nokia and Qualcomm waged a legal battle over patent rights that lasted for three years before the companies inked a 15-year settlement in 2008.
Elop addressed the two companies’ storied past in his opening remarks. “Some of you who know the history of the mobile industry may think it’s a bit odd for the CEO of Nokia to be standing on a Qualcomm stage,” he said, referring to a time when Nokia and Qualcomm were “essentially beating each others’ brains out in a court of law.”
Elop said he knew from his first day at Nokia that Qualcomm “would be an important part of Nokia’s future” and met with Qualcomm CEO Paul Jacobs his first day on the job, Sept. 21, 2010.
Elop described a series of frank discussions with Jacobs about Nokia’s troubles in the handset market that culminated in the two companies agreeing to cooperate on Nokia’s upcoming line of Windows Phone 7 smartphones. Qualcomm’s support gave Nokia the confidence to get its first Windows Phone 7 devices out in the fourth quarter of this year, Elop said.
“The relationship with Qualcomm is an important step with Nokia opening up,” Elop said before a packed crowd of developers, vendors and other representatives from the wireless industry. “I’m here today to show how Nokia is open to all of you.”