FINNISH PHONE MAKER Nokia has dumped its current CEO and replaced him with a former high ranking Microsoft executive.
Nokia's embattled CEO Olli-Pekka Kallasvuo, who recently pleaded for speculation about his job security to stop, was granted his wish with the news that on 21 September he will shown the door. Taking his place will be the current head of Microsoft's business division, Stephen Elop.
Elop will have a lot of work cut out for him as figures show that Nokia, although retaining its top spot in the global mobile phone market, is facing an uphill battle against Apple and Google.
Kallasvuo's inability to lead the company in the last few years was hinted at in a statement by the board. "The time is right to accelerate the company's renewal; to bring in new executive leadership with different skills and strengths in order to drive company success. The Nokia Board believes that Stephen [Elop] has the right industry experience and leadership skills to realize the full potential of Nokia." For those who aren't fluent in management speak, that's tantamount to saying that the board had lost faith in Kallasvuo's abilities and hopes that by hiring Elop it will be able to turn the company's direction around.
Don't feel too sorry for Kallasvuo, though. His golden parachute includes €4.6 million and 100,000 shares in the firm, which on the New York Stock Exchange were going for around $10 a piece this morning. While Nokia's chairman of the board thanked Kallasvuo for his thirty years of service, it became apparent that something major had to be done before the firm slid into obscurity.
No doubt a few eyebrows will be arched with the news that Nokia, a company that makes most of its money flogging mobile phones, has hired a former Vole. Microsoft is hardly regarded as a successful vendor in the mobile market, with its Windows Mobile operating system all but dying on its feet even when it had the market practically all to itself.
That said, Elop was in charge of the division that most notably develops the Microsoft's Office suite of productivity applications. While one can argue whether Microsoft has produced any real innovation in its Office software products since Clippy, the fact that the company has managed to keep Office in position as a major cash cow is impressive, even though it's based on a fading OS monopoly.
Nokia's board is hoping that Elop can magically bring the same sort of perennial cash generation to the company before Apple and Google render it irrelevant, but he's going to need some great products and smart execution to pull it off. µ
Sign up for INQbot – a weekly roundup of the best from the INQ