Nokia with new CEO, ex Microsoft executive, hopes to save itself

13th September, 2010 by adina
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Nokia has confirmed rumors of searching for a new CEO. Olli-Pekka Kallasvuo, its long-serving chief, has been replaced with Stephen Elop, ex Microsoft executive. The former head of the business division in Microsoft was chosen for his experience in software and also in change management that would help him to reorganize the company. He had worked with Macromedia and Adobe in the past and with Juniper Networks as well.

The new position will be taken by Elop on September 21st. the 30-year career at Nokia ends here for Kallasvuo who will resign immediately his positions as an executive and member in the Board of Directors and will keep only his role of chairman on Nokia Siemens Networks’ Board of Directors. He will get one and a half years of salary in severance pay, which is equivalent to $5.85 million, and will also cash out 100,000 Nokia shares on October 1st.

The move reflects the increasing frustration with the inability of improving Nokia’s performance Kallasvuo has shown. In June 2006, when the ex CEO has signed on, Nokia was controlling virtually not less than half of the entire phone market. Since then, the company has dropped to 34 percent and shows a similar tendency in its once very secure smartphone lead. This drop has been mostly credited to devices like Apple’s iPhone or Research in Motion’s BlackBerry and recently Google’s Android. All of them have proven to be quicker to follow the change in modern tastes in smartphones equipped with touchscreens and messaging services and, last but not least, more intuitive interfaces. Unfortunately, Nokia did not have a significant device to oppose to these touchscreen phones until the end of 2008. And more, it is adding multi-touch only now, with its N8 that is ready to ship.

Another criticism to the Finnish company under the lead of Kallasvuo was that it neglected the United States market. Repeated promises that have been made to consider the American market were unfulfilled, as Nokia did not hurry with deals for its smartphones and in many cases provided models for the North American market only several months after their European releases. Many of these models were already obsolete at the moment of their American launch. As a consequence, Nokia has only eight percent or even less of the entire US phone market, while its competitors, such as Apple, Research in Motion, Motorola and even Korean manufacturers have all more share.


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