Nokia replaces CEO with Microsoft exec Elop

The board of directors for Finland’s Nokia has ousted long-time CEO Olli-Pekka Kallasvuo in favor of the former head of Microsoft’s business unit, Stephen Elop. Elop will take the reigns of the company effective September 21, and investors are hoping Elop’s leadership will make Nokia—still the world’s largest maker of mobile handsets—more directly competitive in the smartphone arena, where it has lost major ground to the likes of RIM, Apple, and now Android.

“I am extremely excited to become part of a team dedicated to strengthening Nokia’s position as the undisputed leader of the mobile communications industry, with a relentless focus on meeting the needs and expectations of customers,” said Elop in a statement. “Nokia has a unique global position as well as a great brand upon which we can build.”

The transition ends Olli-Pekka Kallasvuo’s career at Nokia, which has spanned some three decades—he had served as CEO since 2006. He is also giving up his seat on Nokia’s board, although he will remain on the Nokia-Siemens board in a non-executive capacity. Rumors of Kallasvuo possible departure had been circulating for months, with even Kallasvuo conceding the uncertainty was not a good thing for Nokia.

Elop comes to Nokia after a little more than two and a half years at Microsoft, heading up the company’s business division. In that time, Elop was involved in extending cooperation between the two companies, which say Nokia embracing Microsoft technologies (such as Silverlight, Microsoft search technology, and supporting Exchange services), and even saw MIcrosoft launch a communications hub for Nokia phones. Prior to Microsoft, Elop had high-level executive positions at Juniper Networks, Adobe, and (before Adobe’s acquisition) Macromedia.

Nokia is still the world leader in mobile handsets, but many of those handsets are comparatively low-margin products sold into developing markets—where many users’ first experience of the Internet is via a mobile device. Nokia has lost ground in the high-end (and high-margin) smartphone market, particularly in the United States where the company has largely trotted out phones on its own without any carrier support. The company has also had difficulty defining its platform: first it took Symbian open source, then ran hard with Symbian^3, and now seems fixated on Maemo, the open source operating system developed in partnership with Intel.

In the meantime, companies like RIM, Apple, and now Google (with its Android operating system) have been rapidly redefining the consumer phone market, in part through services and applications designed to run on mobile devices. Nokia hasn’t been sitting on its hands in those areas—launching music, social networking, mapping, and games services for its devices. However, Nokia has failed to break into the North American market, despite claims of making it a top priority.

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