Nokia has ended a summer of speculation by axing embattled chief executive Olli-Pekka Kallasvuo and replacing him with Microsoft man Stephen Elop.
Kallasvuo's future looked increasingly uncertain as the Finnish mobile giant posted disappointing figures in July. Investors were also reportedly unhappy at his failure to establish the firm as a big player in the smartphone space.
Kallasvuo, who has been with Nokia for 30 years, assumed the top job in 2006. He stated that he would devote a quarter of his time to re-establishing Nokia as a major force in the US market. Despite his efforts, the company still holds less than 10 per cent of the handset market in the US.
The summer months brought lots of industry talk that the firm might look to placate investors by replacing Kallasvuo with a North American executive. It has now done just that, with the Finn set to depart on 20 September, to be replaced the following day by Canadian Elop.
Kallasvuo departs with a €4.6m (£3.8m) severance package, plus 100,000 restricted shares in the company, to be cashed in on 1 October. Elop, who joins from a role as president of Microsoft's Business Division, claimed he was " extremely excited" about his new job.
"Nokia has a unique global position as well as a great brand upon which we can build," he said. "The company has deeply talented and dedicated people, and I am confident that together we can continue to deliver innovative products that meet the needs of consumers."
Chairman of the board Jorma Olila said the time was right to bring in fresh blood to kick-start a more successful period for the company.
"[Stephen's] strong software background and proven record in change management will be valuable assets as we press harder to complete the transformation of the company," he explained.
But some question the wisdom of the move. Nick Jones, distinguished analyst at Gartner, claimed earlier this summer that Nokia would have a hard time finding an executive with the requisite skills and background who could nestle comfortably into Finnish corporate culture. Elop's appointment has done little to convince him otherwise, it would seem.
“I am in two minds about this news; Microsoft has many of the same problems as Nokia in terms of innovation, especially in the smartphone business," he explained. "I am not sure [Elop] brings any specific skills that will fix Nokia’s challenges."
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