Bad news? Nokia search new CEO?
Quote from The Wall Street Journal [online.wsj.com]
By JOANN S. LUBLIN And NIRAJ SHETH
Mobile phone maker Nokia Corp. has launched a search for a new chief executive, people familiar with the situation said Monday.
The move comes as the current chief executive, Olli-Pekka Kallasvuo, struggles to find traction for the company in the market for high-end smartphones.
While Nokia continues to sell more cellphones than any other manufacturer, it has failed to keep up with advances by such rivals as Apple Inc. and makers of smartphones running Google Inc. operating software.
The Espoo, Finland, company’s failure to get back in the race has taken a toll. Its stock rose eight cents to $8.82 in 4 p.m. New York Stock Exchange trading Monday but is off nearly 42% since April 19.
Laurie Armstrong, a U.S.-based spokeswoman for Nokia, said Monday the company wouldn’t comment on speculation. Efforts to reach spokesmen in Finland were unsuccessful.
“They are serious about making a change,’‘ one person familiar with the matter said. Nokia board members are “supposed to make a decision by the end of the month,’‘ that person said.
The CEO of a major U.S. high-tech company recently spurned Nokia’s approach after meeting with Chairman Jorma Ollila, because the candidate wasn’t interested in moving to Finland, this person said. Nokia also has flown in at least one other U.S. based executive to interview for the CEO job, the person said.
Mr. Kallasvuo has held the CEO job since 2006, the year before Apple introduced the iPhone and roiled the market for mobile phones. The company has stumbled several times in its efforts to catch up.
In May, a month after Nokia posted weaker than expected earnings in the first quarter, the Finnish company reshuffled top management, replacing a key handset executive and creating a unit specially tasked with making smartphones. That same month, it said it would launch a new line of smartphones later in the year.
In mid-June, the company again lowered its profit outlook, citing among other factors “the competitive environment, particularly at the high-end of the market.”
Analysts say Nokia needs to beef up its operating system software and cast of supporting applications developers to compete with the iPhone and Google’s Android operating system.
The company had aimed to roll out a new version of its main Symbian operating system in the second quarter, but now isn’t expected to release the software until later this summer. Meanwhile, it has decided to adopt a separate operating system, developed with Intel Corp. and called MeeGo, to power its high-end smartphones.
Worldwide, Nokia has a 40% market share of cell phones in use, with strong positions in Europe and developing countries like India. However, most of the phones Nokia sells in those markets are lower-priced models, limiting its profit margins.
In the third quarter last year, Apple overtook Nokia as the world’s most profitable phone maker, booking $1.6 billion in profit on the iPhone in the quarter compared to Nokia’s $1.1 billion, according to Strategy Analytics. Nokia made 108.5 million phones in that quarter, while Apple sold 7.4 million.
The company is scheduled to report earnings on Thursday.
Write to Joann S. Lublin at email@example.com