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Nokia Chairman Jorma Ollila to Step Down in 2012


SEPTEMBER 14, 2010

Jorma Ollila, chairman of Nokia, speaks during a news conference at the company’s headquarters in Espoo, Finland, on Sept. 10. Ollila is also non executive Chairman of Royal Dutch Shell Plc


Nokia Corp. Chairman Jorma Ollila, the executive credited with turning the Finnish company into the world’s largest handset maker, plans to step down in 2012, a spokeswoman said.

News of Mr. Ollila’s planned exit, which comes just days after Nokia said it had hired Microsoft Corp. executive Stephen Elop to replace its chief executive, signals a deeper transformation could be in store at the Finnish company than many had anticipated.

Some analysts worried the continued presence of Mr. Ollila atop Nokia would make it more difficult for an outsider like Mr. Elop to rejuvenate the handset giant. Mr. Ollila’s planned departure would clear the way for Mr. Elop to pursue his own course.

The news came the same day Nokia unveiled three new smartphones to join its flagship N8 model, and announced upgrades to its developer tools, as the company responds to pressure from Apple Inc.’s iPhone and smartphones running Google Inc.’s software.

The company devices are based on Nokia’s new Symbian operating system. Nokia said has added more than 250 new features and improvements compared with the old system, which has been criticized by developers in the past for being difficult to use.

“Today our fight back to smartphone leadership shifts into high gear,” Niklas Savander, Nokia’s executive vice president for markets, said speaking to an audience of 3,000 people at the company’s annual Nokia World event.

Yet the turmoil in Nokia’s executive ranks and uncertainty over its strategic direction has raised doubts about whether it can achieve its goals on the smartphone front. Mr. Ollila’s planned departure follows the announced exits in recent days of CEO Olli-Pekka Kallasvuo and Anssi Vanjoki, the head of Nokia’s smartphone unit.

Mr. Vanjoki, one of Nokia’s highest ranking executives, submitted his resignation on Saturday morning, after not being picked for the CEO job. “I was twice running for the job and considered myself to be the right guy. When you don’t get it the second time, it’s a little bit too much,” he said in an interview.

Mr. Ollila’s exit would mark the most dramatic turn in the company’s recent turbulent history. The 60-year-old chairman, served as Nokia’s CEO for 14 years, stepping down in 2006. During his tenure, he focused the more than century-old engineering conglomerate on mobile phones, turning the company into both the world’s largest handset maker and Europe’s technology standard bearer.

More recently, Nokia has struggled to keep pace with its rivals, especially Apple, in the lucrative market for high-end smartphones. Those struggles have prompted Nokia shares to fall about 70% over the past three years. The company’s American depositary shares Tuesday fell 18 cents to $9.95 in afternoon trading on the New York Stock Exchange.

Tuesday’s event in London was supposed to mark a fresh start in the company’s smartphone strategy. It presented the N8 flagship smartphone, which comes with a 12-megapixel camera and high-definition video capabilities.

The company said it had received the highest-ever demand for online pre-orders for the device and has signed up 100 operators to offer it, including Vodafone Group PLC. Nokia didn’t say which U.S. carrier would offer the device.

The N8 will be priced at €370 ($476) in Europe, excluding taxes and subsidies. It also showcased a €495 smartphone with a slide-out keyboard aimed at business users. In addition, the company announced two smartphones with enhanced social-networking.

Tim Shepherd, an analyst with Canalys, a market research firm, said Nokia’s new phones would help in the mid-range market but don’t fill the gap for the company at the high end, which Nokia also acknowledged. “They are not products that will compete with the iPhone,” Mr. Shepherd said.

The latest models are expected to be available in time for the key Christmas period and will have access to Nokia’s updated Ovi Store and free access to Ovi Maps, Nokia’s navigation application.

Write to Christopher Lawton at [email protected] and Ian Edmondson at [email protected]


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