Nokia has decided to replace its CEO Olli-Pekka Kallasvuo with Stephen Elop, from Microsoft. The market applauded the move with a 5 percent rise in Nokia's share price. Kallasvuo will remain in place until 20 September. Shortly after the appointment, Nokia announced that Anssi Vanjoki, head of its unit Mobile Solutions (smartphones), has decided to resign, with a notice period of six months.
The management changes follow a restructuring and are clearly aimed at dealing with Nokia's weak spot: smartphones, and especially smartphones in North America. The company is currently going up against Apple (iPhone, iPad), Research In Motion (BlackBerry) and the numerous Android phones hitting the market. Rumours of Kallasvuo's departure have been brewing for some time. In theory Elop is a good replacement given his background in software and reported skills in 'change management'. At the same, his background at Microsoft is in theory not a plus point, as Microsoft has similar problems to Nokia: surpassed by more skilled competitors and struggling with new products and services. However, Elop was responsible for the Business division at Microsoft (and not Windows or Office) and he also worked at a Microsoft rival, Adobe.
Still the question is whether changes in Nokia's business structure can bring the company closer to Apple, RIM, Samsung, HTC and the Android partners. Undoubtedly the issue is also about creactivity, an issue difficult to mesh with structural changes. Something also outside the management's control is image, and for that the company needs to move quickly. At the Q2 figures, the company showed an increase in handsets sold in all regions except North America. After a decline of 19 percent, only 2.6 million phones were sold there, out of a worldwide total of 111 million. What the management can influence is the choice of technology: which operating system and which components (such as touch screens). They also need to look at issues such as user-firendliness and a wide choice of applications.
Stephen Elop will still need to deal with Nokia's North America market share and a boost to its global smartphone position. First, he will need to replace Anssi Vanjoki. Nokia's committment to Symbian and MeeGo makes it doubtful that he can do anything about the OS, such as embracing Android or maybe even Windows Mobile. First, all eyes will be on the Nokia World event, 14-15 September in London, where the new N8 will be shown as well as other new Symbian 3 phones. Whether Kallasvuo and Vanjoki, which are still working at the company, play any great role in the event is questionable.
