Original URL: https://www.theregister.com/2010/07/20/nokia_ceo_wanted_apparently/

Knives out for Nokia boss

Suomi wrestling

By Andrew Orlowski

Posted in Networks, 20th July 2010 14:06 GMT

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?

Who'll run Nokia?

Surprisingly, neither of the two most prominent internal candidates, Anssi Vanjoki (head of phones) and Tero Ojanperä (orbiting multimedia visionary) are being considered. Executives at US tech companies are being canvassed instead, the WSJ reports.

Nokia enjoyed a market share of over 50 per cent
in Europe throughout much of the Noughties

But then both insiders are Nokia veterans - with 39 years experience between them - and are tainted with the recent failings. Ojanperä bears the blame for the Ovi strategy, an expensive attempt to develop Nokia services when Facebook, Google and Twitter are the brand names customers look for on the high street, and which has made Nokia devices less competitive… and Comes With Music. Vanjoki's accomplishments are N-Gage, multimedia, and the obsessive focus on segmentation strategies rather than great products while running Nokia's Markets division.

Nokia's token American executive Mary McDowell isn't in the frame, while Venezuelan-born Alberto Torres, a former McKinsey guy who has deep experience of the US market (he interned at Apple) is apparently happy running Nokia's Vertu bling phone division. But who wouldn't be?

The new CEO will find plenty of assets - the brand name and the R&D budget - which can leverage Nokia into lots of funky consumer electronics propositions. But he or she will be hampered by a large bureaucratic organisation, European employment legislation that makes clearing away the dead wood difficult, and a product pipeline that is embarrassingly bare.

And as I noted last week, the new CEO doesn't have the luxury of a Lou Gerstner at IBM in 1993, with customers locked in for years and reluctant to move on. The new leadership will have to act swiftly and decisively. Here's a useful primer video for the wannabe turnaround artist.

Send us your candidates, and we'll open a book. Note that our spam checker is primed to reject "Fiorina" automatically. ®