Kurt Hellstroem has been at the helm of Ericsson AB, the third-largest cellphone maker, for less than two years. Jorma Ollila has headed up bigger rival Nokia Oyj for almost a decade.
Hellstroem's company had its first quarterly loss from operations in nine years in the first three months of 2001. Nokia still leads the industry, by both profitability and market share.
That's where the differences end. Both Nordic executives confront the same challenges: market saturation, falling prices, declining stocks, debt-laden customers and a slowing economy.
"They both are facing a difficult environment," said James Sandison, who helps oversee about US$882 million as head of European fund management at Edinburgh Fund Managers Plc. He owns Nokia shares, not Ericsson. "There's nowhere to hide for these companies."
Shares of Nokia, once Europe's most valuable company, have fallen 37 percent this year, while Ericsson's have fallen 44 percent. The stocks trade at about 36 times estimated profit, less than one-third of what they traded at a year ago.
The intervening year has been a period of falling sales forecasts for handsets and network equipment, and rising debt as both have offered financing to their customers.
Ollila and Hellstroem face similar dilemmas and similar debuts to their CEO careers: Both replaced chief executives who were ousted by their boards.
Ollila, 50, arrived at Nokia in 1985. He ran Nokia's mobile phones division and was chief financial officer before replacing Simo Vuorilehto, who left in 1992 after a quarrel over strategy.
Hellstroem, 57, joined the company in 1984 with a background in radio communications. He was formerly responsible for Ericsson's Asia-Pacific region and replaced Sven-Christer Nilsson when he left in July 1999 after handset profit started falling.
Their companies are more divergent. In the fourth quarter, Nokia's phone unit had operating profit that was 21.3 percent of sales, while Ericsson's lost money. Nokia's global handset market share increased to about a third, while Ericsson dwindled to a tenth.
"Ollila's job should be easier," said Arnold Gast, who helps manage about 6 billion euros at Gilissen Capital Management. Hellstroem "deserves a little more time. He's got a much harder job." Gast has held Nokia since 1998, never Ericsson.
When he presented Nokia's results Jan. 30, Ollila mentioned rivals only in passing, saying that last year "was not such an easy year, as I hear from our competitors. We came out extremely well."
Nokia, Motorola and Ericsson have all reduced forecasts for 2001 industry sales of handsets as consumers balk at buying new models that let them surf the Internet. Nokia expects the industry to sell as few as 450 million phones this year, implying that growth may slow to 9 percent from 46 percent in 2000.
"I can't see how things are going to get better in the short term," said Ed Protheroe, who helps manage US$250 million at Aberdeen Asset Management Plc in London. "I'm not at all confident we've heard all the bad news."
Ericsson and Nokia are taking on more debt exposure as they vie for equipment and handset contracts by lending telecom operators the money to build faster networks, which won't start in Europe until at least 2002. France Telecom SA and European rivals saw their debt grow and credit ratings drop after spending US$90 billion on licenses for faster mobile phone services.
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