SEPTEMBER 10, 2010, 9:08 A.M. ET.
wall street journal
Nokia Taps Microsoft Executive as New CEO
By CHRISTOPHER LAWTON And GUSTAV SANDSTROM
Nokia Corp. said it was replacing embattled Chief Executive Olli-Pekka Kallasvuo with Microsoft Corp.'s Stephen Elop, as the world's largest handset maker seeks to reverse steep declines in earnings and market share that have decimated its share price. "The time is right to accelerate the company's renewal," Nokia's Chairman Jorma Ollila said in a statement. "The Nokia Board believes that Stephen has the right industry experience and leadership skills to realize the full potential of Nokia."
Mr. Elop's main task will be to develop a credible challenger to Apple Inc.'s iPhone, something Mr. Kallasvuo failed to achieve during his four-year tenure. Many analysts feel that Nokia was caught flat-footed by the iPhone's success and blame its weakness in smartphones for shaving about 70% off of Nokia's market value over the past three years.
The CEO change comes at an awkward time for Nokia. Next week, the company holds its annual "Nokia World" conference in London, where Mr. Kallasvuo was expected to articulate a new strategy to regain its footing in the industry and to present a new smartphone, the N8. The switch at the top of the company will likely draw attention away from those issues as investors question whether Mr. Elop, a Canadian and the first non-Finn to run the more than century-old company, can navigate the cultural and institutional pitfalls that lie ahead.
"The house is burning and things are going to be even more difficult in the short term," said Pierre Ferragu, analyst with Sanford C. Bernstein & Co, adding that there was little in Mr. Elop's record to suggest he could lead the turnaround of such a large company.
"The time is right to accelerate the company's renewal," Nokia's Chairman Jorma Ollila said in a statement. "The Nokia Board believes that Stephen has the right industry experience and leadership skills to realize the full potential of Nokia."
After joining Microsoft in January 2008, Mr. Elop was picked to lead its business division. Prior to Microsoft, he was chief operating officer at network-infrastructure company Juniper Networks Inc.
He joined Juniper having been president of Adobe Systems Inc.'s global sales organization, a company he joined as part of its 2005 acquisition of Macromedia Inc., where he rose to CEO in a career spanning seven years.
"He [Elop] might be a superstar, but on paper, it is not reassuring," said Mr. Ferragu, who called his trajectory "patchy" in a research note.
Nokia chose Mr. Elop partly because he is a Canadian. The Finnish press criticized the company after The Wall Street Journal reported its chairman was wooing some American candidates for CEO, according to a person familiar with the situation.
"That helps a lot that he is not American," this person said. Mr. Elop is at least seen "as a kindred spirit with the Finns."
Nokia's choice of the Microsoft executive robs Hewlett-Packard Co. of a possible corner office occupant. H-P, which forced out CEO Mark Hurd last month, had been considering Mr. Elop among other outside prospects, according to the informed individual.
Jyske Bank analyst Robert Jakobsen said the change is a positive because it puts an end to speculation about Mr. Kallasvuo's future and may help Nokia accelerate its strategy for renewal.
Mr. Elop's background within the software industry, his knowledge of the U.S. market, and his experience of change management will be important assets, Nokia spokeswoman Arja Suominen said.
"I am extremely excited to become part of a team dedicated to strengthening Nokia's position," Mr. Elop said in a statement. "I am confident that together we can continue to deliver innovative products that meet the needs of consumers."
The announcement ends weeks of speculation that the Nokia board of directors would replace Mr. Kallasvuo. The Wall Street Journal reported in July that Nokia's board had started the search for a new CEO. Mr. Ollila had reportedly wooed another U.S. executive, but was spurned, because the candidate didn't want to move to Finland.
While the board of directors remained silent, Mr. Kallasvuo went on an offensive. On business network CNBC in July, Mr. Kallasvuo said, "There has been a lot of speculation on my position, on myself, during the last couple of weeks and that is not good for Nokia and must be brought to an end one way or another," Mr. Kallasvuo said. "At the same time, I'm not in a position here and now to really shed any more light on the topic so I guess this is a no comment. I really concentrate now on the task at hand," he added.
Mr. Kallasvuo will leave his position on Nokia's board of directors with immediate effect, but will continue in a nonexecutive capacity to chair the board of Nokia Siemens Networks, Nokia's telecom equipment joint venture with Germany's Siemens AG. Nokia said Mr. Kallasvuo would receive a severance payment of €4.6 million ($5.8 million) and will also receive as compensation the fair market value of the 100,000 restricted Nokia shares granted to him in 2007, which vest Oct. 1.
Nokia has faced growing competition from rivals like Apple with its iPhone, Blackberry-maker Research in Motion Ltd. and devices based on Google Inc.'s Android platform, which has hit its high-end market share and margins, forcing it into recent profit warnings. Nokia has seen its market value fall over 70%, or more than $90 billion, over the past three years.
More recently, Nokia in May reshuffled top management and created a unit specially tasked with making smartphones after it posted weaker-than-expected first-quarter earnings. 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."
Mr. Elop inherits the herculean task of turning around a massive company, which observers say is bogged down in bureaucracy, causing it to move too slowly in an industry that thrives on new, trendy product introductions. Nokia commands roughly 35% of the global handset market by volume, brings in over €40 billion in annual revenue and employs more than 100,000 people.
Former employees describe the structure of the company as a confusing matrix organization, akin to the "Soviet Union." While Nokia was ahead on hot trends in the tech industry such as internet services and 3-D, lengthy approval processes and a lack of leadership inside of Nokia bogged down these innovations. One former employee added that Nokia, given its size, was never eager to invest in innovations that didn't have a high volume potential across many of Nokia's markets.
"Changing the CEO would be a short-term solution. Sure the stock price would rise for a moment, but Nokia is a big company and it will take years for things to change," says Ari Hakkarainen, a former Nokia engineer, who wrote a book about the company.
Another challenge may be that Mr. Elop isn't Finnish, or even European. Nokia was first founded in 1865 as a wood paper mill by Fredrik Idestam, a mining engineer. Over the years, the company built positions in rubber, cable and electronics. The company didn't make its move into telecommunications until the late 1960s. In 1992, when Mr. Ollila took over as CEO, he focused the company solely around telecommunications and led the company to its current top global position by 1998. Throughout his tenure, Mr. Ollila, who was educated in London and got his start at in corporate banking at Citibank's London office, has sought to bring in American and British talent, former employees say. Still the company, which is headquartered in Espoo, remains culturally Finnish, they say.
"Nokia is definitely a Finnish company. It was born from Finnish culture," says Juhani Risku, 53, a former Nokia executive, who also wrote a book about the company.
—Joann Lublin contributed to this article.
Corrections & Amplifications:
Stephen Elop will succeed Olli-Pekka Kallasvuo. An email alert about this article misspelled the name of Nokia's incoming chief executive.
Read more: http://online.wsj.com/article/SB10001424052748703597204575482902836750116.html#ixzz0z8GVvZFD
Read more: http://online.wsj.com/article/SB10001424052748703597204575482902836750116.html#ixzz0z8GVvZFD
Read more: http://online.wsj.com/article/SB10001424052748703597204575482902836750116.html#ixzz0z8GVvZFD
Read more: http://online.wsj.com/article/SB10001424052748703597204575482902836750116.html#ixzz0z8GVvZFD
Read more: http://online.wsj.com/article/SB10001424052748703597204575482902836750116.html#ixzz0z8GVvZFD
Read more: http://online.wsj.com/article/SB10001424052748703597204575482902836750116.html#ixzz0z8GPs4Gp
Read more: http://online.wsj.com/article/SB10001424052748703597204575482902836750116.html#ixzz0z8GCoL9L
Nenhum comentário:
Postar um comentário