Nokia is replacing CEO Olli-Pekka Kallasvuo with top Microsoft’s executive Stephen Elop as the world’s largest mobile phone maker aims to regain lost ground in the competitive smartphone market, the company announced on Friday.
“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,” said Jorma Ollila, Nokia’s chairman and former chief executive.
Elop, head of Microsoft’s business division, has held top posts at Juniper Networks Inc., Adobe Systems Inc., Macromedia Inc. He takes over Sept. 21, the company said Friday.
Analysts welcomed the choice of the 46-year-old Canadian, who has worked closely with Nokia at Microsoft and Macromedia with developing the Symbian software platform for Nokia phones and delivering Flash player memory capabilities on Nokia devices.
“In late May of this year, we started a CEO search process. We wanted to ask ourselves, and we did, who would be the best person to lead Nokia,” Jorma Ollila said at a press conference.
He praised his longtime friend Kallasvuo for being “gallant” about the whole process, which he described as open, transparent, and free of any “door-slamming.”
Nokia 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.
Nokia said Friday Kallasvuo would also resign his position on the Nokia Board of Directors but would continue to chair the Board of Nokia Siemens Networks in a non-executive capacity.
Elop, aged 46, acknowledged that he takes the reigns of the global mobile phone market leader at a time when the entire industry was in a state of upheaval.
“It is the case in the technology world that there are critical moments where fundamental change takes place. Today, right now today, we are going through a similar moment,” he told reporters. “For Nokia, this moment of change represents huge opportunities,” he added.
The news sent Nokia shares up about 5.0 percent on the Helsinki Stock Exchange. At 1143 GMT, company stock was trading 3.94 percent higher to 8.04 euros on a Helsinki Stock Exchange up 1.6 percent.
Senior equities analyst for Pohjola Bank Hannu Rauhala said Nokia had been surprised by how quickly the market had 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 market later this month.
Nokia is also developing an operating platform with Intel that is intended to challenge Google’s Android, Rauhala noted.
Stephen Elop, a 46-year-old Canadian, is currently the President of Microsoft’s Business Division and will take over as Nokia CEO on September 21.
He is the first non-Finnish CEO at Nokia, where non-Finns are a rarity in the executive leadership. “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,” he 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 the drastic change in the entire entire mobile phone industry over the past ten years.
“It’s now more about services and operating systems. Nokia is looking for a more software-oriented leader,” he said. Elop joined Microsoft in January 2008, making the move from network infrastructure company Juniper Networks, where he was the chief operating officer.
Kallasvuo took over as CEO in 2006, a year before Apple created waves in the smartphone market with the launch of its iPhone, 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. [via Guardian, BBC and Bloomberg]