NOKIA on Friday confirmed rumors of a search for a new CEO by replacing its long-serving chief Olli-Pekka Kallasvuo with Microsoft executive Stephen Elop. The now former head of Microsoft's business division was picked for both his experience in software and "change management" that will help reorganize the company. In the past, he had worked with Adobe and Macromedia as well as Juniper Networks.
Elop will assume the new position as of September 21 and is ending Kallasvuo's 30-year career at Nokia. The departing CEO is resigning his executive and Board of Directors positions immediately and will only keep his chairman role on the Board of Directors at Nokia Siemens Networks. He will still get 1.5 years of salary in severance pay equivalent to $5.85 million as well as cash out 100,000 shares on October 1.
The swap represents the culmination of increasing frustration at the company with Kallasvuo's inability to turn around Nokia's performance. Despite controlling virtually half of the total phone market when he signed on in June 2006, Nokia has dropped to 34 percent and has seen a nearly similar plunge in its once secure smartphone lead. Most of the drop has been credited to Apple's iPhone, RIM's BlackBerry and more recently Google's Android. All of these have typically been quicker to adapt to modern tastes in smartphones with touchscreens, messaging services and more intuitive interfaces. Nokia didn't have a significant touchscreen phone until the end of 2008 and is only now adding multi-touch with the ready-to-ship N8.
The Finnish company under Kallasvuo was also criticized for neglecting the US. Repeated promises to properly serve the American market went unfulfilled as the company refused to press for deals for most of its smartphones and often provided North American models several months after the European releases, guaranteeing that many of them were already obsolete by the time they shipped. Nokia has about eight percent or less of the total US phone market where Apple, Motorola, RIM and Korean manufacturers all have more share.
The swap represents the culmination of increasing frustration at the company with Kallasvuo's inability to turn around Nokia's performance. Despite controlling virtually half of the total phone market when he signed on in June 2006, Nokia has dropped to 34 percent and has seen a nearly similar plunge in its once secure smartphone lead. Most of the drop has been credited to Apple's iPhone, RIM's BlackBerry and more recently Google's Android. All of these have typically been quicker to adapt to modern tastes in smartphones with touchscreens, messaging services and more intuitive interfaces. Nokia didn't have a significant touchscreen phone until the end of 2008 and is only now adding multi-touch with the ready-to-ship N8.
The Finnish company under Kallasvuo was also criticized for neglecting the US. Repeated promises to properly serve the American market went unfulfilled as the company refused to press for deals for most of its smartphones and often provided North American models several months after the European releases, guaranteeing that many of them were already obsolete by the time they shipped. Nokia has about eight percent or less of the total US phone market where Apple, Motorola, RIM and Korean manufacturers all have more share.
