Q&A: Nokia's CEO Explains Plan for Smartphone Dominance

Nokia CEO Stephen Elop is ready for mobile war. Photo: Jon Snyder/Wired.com

LAS VEGAS — Stephen Elop doesn’t have much time. As Nokia’s head honcho, he’s tasked with ushering a once-dominant mobile phone company — a business that built its fortunes on “dumbphones” — into a new era where even the most cost-conscious consumers are looking to buy smartphones.

At Nokia’s CES keynote address last Monday, Elop launched into a spirited oration on his company’s plans for 2012 and beyond, sounding more like a general leading his troops into battle than a CEO outlining a company roadmap.

Indeed, it sounded like someone brushed up on his Sun Tzu before landing in Las Vegas. Elop’s keynote focused on establishing a series of “beachheads” in the ongoing war of mobile devices, with each new Nokia handset serving to boost the fledgling Windows Phone platform.

We sat down with Elop in Las Vegas last week for further insight into Nokia’s vision of a mobile future.

Wired: So the keynote was eventful.

Stephen Elop: It was. We tend to have those days.

Wired: You came out with guns blazing. It’s particularly interesting to hear Nokia say [the war] is about App ecosystems.

Elop: If you want to characterize the fundamental shift in the industry over the last so many years, it used to be the case that Nokia’s XYZ product competed against ABC product. Now, it’s about all of the collective services, and everything around them, that constitute the value that’s being offered. One has to operate on that basis. That was a fundamental element in our decision to pursue a strategy with Microsoft around Windows Phone.

Essentially, we were making an ecosystem decision. Do we build something all ourselves? Do we join the Android ecosystem, or do we go after Windows Phone and say, “OK, we’re going to step aside from the pack and say we have an opportunity for differentiation.” Clearly we chose the third strategy.

Wired: That’s why other manufacturers chose to hedge their bets.

Elop: There’s a lot hedging going on in the industry, that’s for sure. And this is why I say rather boldly these are the first real Windows Phones. Our best innovation, our best industrial design, our best cameras, our best software, whatever it is, is being focused on the Windows Phone platform. Unambiguously. We’re not doing a little bit of everything. This is what we’re doing.

Wired: But how do you get the product out there? As it stands today, you’re fighting an uphill battle.

Elop: If we get it into the hands of the consumer, and they begin to use a Windows Phone device, their rating of it is quite high. But therein lies the answer to the challenge. How do you go from people who don’t have a general awareness to a position where they actually try it? If we can get there, then we’re going to win.

We have to introduce people to the fact that this experience is different than what Android and iPhone are doing. It’s not a static grid of application icons. It’s an entirely different experience.

But there are other steps you have to take. You have to familiarize the consumer with this. The salespeople in the AT&T stores, for example.

Wired: That’s exactly what I was thinking about. As a retail associate, there’s a sure bet of selling someone an iPhone. I know I’m going to get my commission. So how do you attack that prejudice? How do you convert them to pitching that Windows device?

Elop: First of all, it is a challenge. If something is easy to sell, then it’s easily sold. I get that. But there is a very deliberate set of steps in sales and marketing. It means training people, and putting a lot of these devices into their hands so they can experience them. As we get [retail associates] excited about the product, they’ll tell those stories.

Consumers want to feel that there’s momentum building, that something is happening. When Microsoft announced yesterday that Windows Phone had surpassed 50,000 applications, that’s acceleration since our launch in October.

Wired: I have to ask about developer strategy, another critical part of dealing with an app system. Often it’s a chicken or egg situation with devices and apps. How are you guys going to deal with this?

Elop: First of all, if you like the leading applications, you can follow the curve and say there’s a small number of apps that a lot of people are interested in using. Between ourselves and Microsoft, we are very deliberately targeting those applications, targeting those developers.

When you go into the marketplace, for example, there’s a section that shows the essentials — all the apps that you would expect. [Editor's Note: Think Angry Birds.]

One of the great strengths that Nokia brings is our global footprint. We have a huge reach, and more boots on the ground helping developers around the world than any other mobile company out there. I meet with developers in India, China and Brazil and Mexico. I have met a lot of developers who have been developing for Symbian and our low-end mobile phone products. People who have worked in those environments are anxious to begin pursuing Windows Phone. Now, we’re on a program of rolling out country by country by country. So that problem is being addressed as we continue to roll out.