This weekend’s news that Stephen Elop, CEO of Nokia, is planning a night of the long knives is perhaps unsurprising. He has been in position now for several months, and has clearly had time to define his strategy for the coming months. A changing of the guard is to be expected, as Elop looks to bring in new blood that is better positioned to help him achieve what he believes are the new goals for the company.

But there is a real danger in making too many changes, too soon. Considering the tough times the industry has seen, Nokia is still in a relatively sound position financially, and is still the number one handset vendor by some margin. In gaining and maintaining this position, the company will have gathered a wealth of experience which remains valuable now, and which could be lost if following a policy of change for change’s sake.

There are certainly areas where Nokia’s strategy has been flawed; smartphones and services being the obvious candidates. But the timeframe for bringing a new product to market is long, and changes made by the new management will take some time to come to fruition. Nokia must be careful that its focus on the long-term does not impede its progress in the immediate future.

There is a clear example for Nokia to look at: Motorola. When Sanjay Jha took the helm at the US-based vendor, he undertook a geographic retrenchment to focus on a number of key markets, placed Android-based smartphones at the centre of its strategy, and cancelled a number of devices which were on the way to market. This had the obvious effect on shipment volumes, and at the same time the company has lost market share to companies including Apple, RIM, Huawei and ZTE.

Whether Jha’s bold strategy will pay-off in the long term has yet to be confirmed. While Motorola is recovering, it is still not consistently profitable, and while its focus on Android smartphones has been strategically sound, it does mean the company is more exposed to competition from rivals using the same platform – including, notably, HTC, Samsung and Sony Ericsson. Its geographic focus also means its success is dependent on a limited number of operators, as has been underlined by the effect of the launch of Apple’s iPhone 4 by Verizon Wireless – the impact on sales of Motorola-made, Droid-branded devices is likely to be significant.

The problem for Nokia is that its nearest competitor, Samsung, is both hugely ambitious and has the potential to capitalise on its rival’s weakness. In its recent results conference call, it stated that it expects its shipment volume increases to outpace the market, and in addition to its well documented success in the high-tier with the Galaxy S, it is also performing well in emerging markets with its mass-market smartphones and touch-screen featurephones.

In its most recent conference call, Elop said that he had “reinforced my belief in Nokia’s gems.” It will be important now, when he begins making his changes, to ensure that these are protected if Nokia is to hold on to the number-one spot in the coming years.

Steve Costello

The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members