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Knives out for Nokia boss

Suomi wrestling

Nokia is seeking a new boss and for the first time he won't be a Finnish national, according to a report in the Wall Street Journal.

The paper claims that a decision to replace CEO Olli-Pekka Kallasvuo will be made by the end of the month. The nature of the sources suggests the board, under pressure from investors, has already made up its mind, and hopes the CEO will voluntary shuffle through the Ovi marked 'Exit'.

Nokia's share price has fallen by 42 per cent in just three months, and the company warned its financial results due this week would be lower than expectations.

Kallasvuo was appointed in 2006, and is only the fifth CEO in 43 years, since the modern Nokia was founded by merger in 1967. He had the misfortune to follow the phenomenally successful 14-year tenure of Jorma Ollila.

Although Nokia was already primed to take advantage of the deregulated telco market when Ollila took over - having been involved in radio products for 40 years and helping develop the GSM spec - Ollilla focused Nokia on mobile, selling off everything that wasn't mobile-related, including PCs, TVs, IT data processing and the historical cable business, which dates back to 1865. He also ensured the company executed to perfection.

Apple and Nokia share prices since March 2010

That can't be said for Kallasvuo. Nokia's competitiveness has eroded both in its traditional high-margin phones market - Apple and RIM take the lion's share of the smartphone profits - but also now in feature phones, too. Samsung overtook Nokia in European sales of feature phones for the first time in Q1 (up 18 per cent while Nokia was down 18 per cent), and is now only 3.5 per cent behind Nokia's European market share of 32.8 per cent for all phones. Under Kallasvuo, Nokia continued its retreat in the US market, where it now scrapes up just 8.1 per cent of the phone market.

Kallasvuo reorganised the company in 2007, and again late last year - but that plan was torn up this spring as the extent of Nokia's problems finally became apparent.

Bloomberg notes that Nokia outspends Apple six to one in R&D investment, but has little to show for it in terms of competitive products - there's almost nothing for Kallasvuo or his successor to fight back with. And who may that be?

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