HELSINKI, Sep 10 – Nokia, battling to regain its dominance of the mobile phone handset market, replaces its chief executive, tapping a senior Microsoft executive to run the Finnish telecommunications equipment giant.
Nokia named senior Microsoft executive, Stephen Elop, as its new chief executive and president, in place of Olli-Pekka Kallasvuo.
The company, once the undisputed ruler of the mobile phone market, has had its considerable lead in the smartphone market pecked away by Apple\’s iPhone, RIM\’s Blackberry and Google\’s Android operating platform.
When the company posted a 40-percent operating profit slump in the second quarter of 2010 speculation was rife that Kallasvuo, a 30-year-Nokia veteran, would be ousted.
Kallasvuo would also resign his position on the Nokia Board of Directors, but continue to chair the Board of Nokia Siemens Networks in a non-executive capacity, the company said.
"The time is right to accelerate the company\’s renewal; to bring in new executive leadership with different skills and strengths in order to drive company success," former CEO and Board Chairman Jorma Ollila said in a statement.
The news sent Nokia shares up 4.97 percent to 8.12 euros on the Helsinki Stock Exchange up 1.11 percent at around 0830 GMT.
Senior equities analyst for Pohjola Bank Hannu Rauhala said Nokia had been surprised by how quickly the market changed and had been playing catch-up ever since.
"Apple came on the market with a completely new way to use mobiles, and Google Android came quickly behind.
"The speed in which this happened was astonishing," said Rauhala, adding that Nokia\’s only real answer was the N8 series, which will hit shop shelves later this month.
Nokia is also developing an operating platform with Intel, which is intended to challenge Google\’s Android, Rauhala noted.
Elop, who is currently the President of Microsoft\’s Business Division, will take over as Nokia CEO on September 21.
"I am extremely excited to become part of a team dedicated to strengthening Nokia\’s position as the undisputed leader of the mobile communications industry," Elop said in the Nokia statement.
Rauhala said the appointment of a Microsoft executive was an acknowledgement by Nokia that its leadership should change to reflect that the entire mobile phone industry had drastically changed over the past ten years.
"It\’s now more about services and operating systems," he said.
Nokia is "looking for a more software-oriented leader," he added.
Elop joined Microsoft in January 2008, making the move from network infrastructure company Juniper Networks, where he was the chief operating officer.
Kallasvuo has been with Nokia for just over 30 years, taking over as CEO in 2006 when Jorma Ollila stepped down. He has served on the board of directors since 2007.
"The whole Board of Directors joins me in thanking Olli-Pekka for his thirty years at Nokia, during which he has been deeply involved in developing the company and its operations," Ollila said in a company statement.