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September 10, 2010

Nokia dumps boss for Microsoft exec

Redmond's business division head replaces under fire OPK

By Steve Evans

Troubled mobile phone maker Nokia has ditched boss Olli-Pekka Kallasvuo and replaced him with Microsoft executive Stephen Elop, boss of Redmond’s Business Division.

Kallasvuo has been facing increasing pressure over the last few years as Nokia has struggled to keep up with the likes of Apple, HTC and BlackBerry in the smartphone development field. The Finnish company’s most recent financial results revealed a 40% slump in profits on the back of two profit warnings and a 40% dive in share price value between March and June this year.

Despite the poor performance Kallasvuo was confident about Nokia’s future. "The global handset market has continued to grow at a healthy pace, led by some of the less mature markets where Nokia is strong," he said at the time. "In smartphones, we continue to renew our portfolio. We believe that the Nokia N8, the first of our Symbian3 devices, will have a user experience superior to that of any smartphone Nokia has created."

However the company has clearly decided that he has had enough time to turn around Nokia’s performance. "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," the firm said.

Stephen Elop, the first non-Finn to lead Nokia, has also held positions at Juniper Networks, Adobe Systems and Macromedia. "The Nokia board believes that Stephen has the right industry experience and leadership skills to realise the full potential of Nokia," said Nokia chairman Jorma Ollila. "His strong software background and proven record in change management will be valuable assets as we press harder to complete the transformation of the company."

Gartner analyst Nick Jones believes that the appointment may not be the big leap forward that Nokia needs to make if it is to remain competitive against other smartphone developers.

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"I am in two minds about this," he wrote. "Microsoft have many of the same problems as Nokia in terms of innovation, especially in the smartphone business. I’m not sure he brings any specific skills that will fix Nokia’s challenges. My personal view is that Nokia’s board have made a safe choice when they should have made a courageous choice. Although, having an ex-Microsoft person running Nokia suggests lots of interesting possibilities for the future."

Elop will begin his new role on September 21.

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