“The man was standing upon a ‘burning platform,’ and he needed to make a choice,” Mr. Elop wrote in the memo, which was widely circulated on the Internet. “He decided to jump.” In the memo, Mr. Elop went on to say that Nokia, too, had to jump, metaphorically — take bold action to make up for lost ground.
Meanwhile, in San Francisco, H.P., the largest personal computer maker, took its own leap on Wednesday. The company announced that it would introduce a new tablet, the Touchpad, in an effort to chase Apple and its iPad. H.P. also introduced two new smartphones, entering another market in which it has lagged.
But Nokia and H.P. — tech giants though they are — face long odds in catching up with competitors that have a head start in a rapidly changing landscape. It’s hard to do that in any business, but especially so in technology markets.
“It’s possible to catch up, but it’s very difficult,” observed Mark R. Anderson, chief executive of the Strategic News Service, a technology newsletter. “It almost never works.”
History offers a handful of successful catch-up stories. For example, I.B.M., the mainframe behemoth, trailed the leaders in the new markets for minicomputers and then personal computers, but later caught up. And Microsoft was a latecomer to Internet browsing software, yet eventually became the market leader.
Still, slip behind in the innovation race, and fleet-footed rivals can gain momentum that is hard to slow down. Industry partners, software developers and customers flock to the front runner, and its gains snowball. As more people use the new technology, the more valuable it becomes, unleashing the power of “network effects,” in economic terms.
In Mr. Elop’s memo to employees, which first surfaced Tuesday on the blog Engadget, he noted such effects. He wrote that Nokia found itself losing in “a war of ecosystems,” including developers, software applications and games, advertising, e-commerce, search and other services.
Nokia, Mr. Elop wrote, must “build, catalyze or join an ecosystem.”
Mr. Elop is scheduled to address an analysts’ meeting Friday in London, and is expected to begin to outline Nokia’s new strategy. But what might that strategy include? For Nokia, which is based in Finland, joining a major technology partner, analysts say, is the most likely option in the long run.
“Nokia doesn’t have the weapons to fight this fight on its own,” said George F. Colony, chairman of Forrester Research.
The most attractive partners would be Google and Microsoft, analysts say. Both companies have been courting Nokia recently. Although Nokia may be losing ground in the smartphone market — with its worldwide share falling to 28 percent in the fourth quarter of 2010, down more than 10 percent from a year earlier — it still sells more smartphones than any other company. It could be a valuable partner and marketer for Google’s Android smartphone software or Microsoft’s Windows Mobile 7.
Most Nokia smartphones run on the much-criticized Symbian operating system. To get Nokia to switch, Google and Microsoft are offering hundreds of millions of dollars worth of engineering assistance and marketing support, according to a person who has done consulting for the company and was told of the talks.
Mr. Elop joined Nokia last September, and was recruited from Microsoft, where he was a senior executive. “But the obvious choice for Nokia is Android,” Mr. Colony said. “Microsoft would be the higher risk path.”
While Apple’s iPhone redefined the smartphone, handsets using Google’s Android software are fast attracting users and developers. In 2009, some 25 million iPhones were shipped, compared with about eight million phones running Android. Last year, Android shipments reached 61 million, compared with 48 million iPhones, estimates Sanford C. Bernstein & Company.
H.P. started its drive into the tablet market on Wednesday, as well as introducing two new smartphones. No pricing was announced, nor have wireless carriers yet been signed up as partners.
The products are the first based on technology from Palm, which H.P. acquired last July for $1.2 billion. “We lost a product cycle — no doubt about that,” said Jon Rubinstein, an H.P. senior vice president and Palm’s former chief executive. ked members to take “the long view” — “give our overseas friends time to learn.”
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