Nokia, the world's largest mobile-phone company, put an end to succession questions on Monday when it named one of its top executives, Olli-Pekka Kallasvuo, to replace longtime chief Jorma Ollila.
Kallasvuo, 52, is currently the head of Nokia's biggest group, the mobile-phone business. He will become president and chief operating officer of the entire company in October, and then chief executive in June next year, the company said in a statement.
A 25-year Nokia veteran and former chief financial officer, Kallasvuo has helped shore up the company's faltering market share since he took over the mobile-phone business in January last year.
Big shoes
On Monday, he promised the company would be more aggressive. Nokia "has to lead the change and not be a follower," he said during a news conference in Espoo, Finland.
Kallasvuo will be stepping into the shoes of one of the most influential executives in the mobile-phone industry. Ollila, 54, has been Nokia's chief executive for 13 years and is credited with building the company from an electronics and consumer-products manufacturer to a mobile-phone giant by introducing phones at low cost.
Ollila has been criticized in recent years by analysts and investors because Nokia failed to introduce snappy new phone designs like its peers, with features like cameras, and lost customers before being forced to play catch-up. He had said before that he might step down next year.
By some measures, Nokia's position in the market is improving. The company consistently increased market share for the last three quarters of last year, to 33 percent of all phones sold by year's end. But in the first quarter of this year, that market share dipped to 30.4 percent before increasing again in the second quarter. And on July 21, Nokia said that profits were beneath expectations in the second quarter because heavy competition was driving down prices.
"The turnaround, in terms of stopping the rot, has worked," said Richard Windsor, an analyst with Nomura in London.
More work ahead
But Nokia still has to deliver on the second part of its strategy by introducing phones that customers rush out to buy.
"They have to recapture the imagination of the market," Windsor said.
Pekka Ala-Pietila, 48, Nokia's current president, who was often considered a candidate for the top job, said on Monday that he would retire in October. He told reporters he had not put his hand up for the chief executive spot because he "no longer had the fire" after 17 years in the industry.
Ollila is "stepping aside to allow one of his loyal lieutenants to play a role," said Paul Sagawa, an analyst with Sanford C. Bernstein & Co.
"I doubt you'd see an American CEO do this thing, but it is very Finnish," he said.
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