reuters
On Wednesday 4 May 2011, 0:34
By Tarmo Virki, European Technology Correspondent
HELSINKI (Reuters) - Nokia, the world's largest phone maker by volume, has started to look for a new chairman to succeed Jorma Ollila who will step down next year, Ollila said on Tuesday.
Ollila led Nokia's transformation from a rubber boots and TVs conglomerate into a mobile phone giant in the 1990s but the Finnish technology giant has recently lost out in the smartphone market to newcomers Apple and Google.
"It was a tough year, and I expect the year ahead to be a tough one too," Ollila told the annual shareholders meeting.
"For a long time he did a great job at Nokia but then he made some mistakes that cost shareholders a fortune," said John Strand, founder and chief of Danish Strand Consult.
"Under Ollila Nokia was slow in smartphone development, not active in the fight with Apple and Google and failed to succed in the United States," Strand said.
Ollila joined Nokia in 1985, was chief executive between 1992 and 2006, and has been chairman since. He is also a chairman of Royal Dutch Shell Plc.
Shares in Nokia were 0.2 percent higher at 6.31 euros by 1430 GMT.
PAINFUL SMARTPHONE MOVE
To turn around its smartphone fortunes, Ollila last year replaced his old colleague Olli-Pekka Kallasvuo with Canadian Stephen Elop, a unit chief from Microsoft.
In February Elop unveiled a shift in strategy in smartphones by adopting Microsoft's unproven operating software in preference to Nokia's own Symbian platform.
Elop on Tuesday reiterated that Nokia would receive billions from Microsoft as part of the deal, including substantial payments for the use of patents.
Uncertainty over the success of the Microsoft deal has driven Nokia shares down 25 percent since the deal was unveiled, and the stock is trading at a mere third of what it was worth three years ago.
"It has been very painful to be a Nokia shareholder for the past several years," said shareholder Pekka Voutilainen.
Last week Nokia said it will axe 7,000 jobs, including outsourcing its Symbian software development unit, to cut 1 billion euros ($1.48 billion) in costs.
(Editing by Greg Mahlich)
http://sg.finance.yahoo.com/news/Nokia-chairman-step-next-year-rsg-2301262808.html?x=0&.v=1
==========
Nokia Chairman Says Board Supports CEO Elop’s Strategy
By Diana ben-Aaron - May 3, 2011 10:23 AM ET
Nokia Oyj (NOK1V) Chief Executive Officer Stephen Elop, who has presided over a 23 percent decline in the company’s stock price since a February agreement with Microsoft Corp., has the backing of the board, Chairman Jorma Ollila told shareholders today.
Nokia is shifting its smartphone production to Microsoft Windows Phone 7 devices and phasing out handsets based on its own Symbian software. The Espoo, Finland-based company announced April 27 that it will transfer Symbian development units with 3,000 workers to Accenture Plc, and cut 4,000 more jobs globally as part of a 1 billion-euro ($1.48 billion) cost-reduction program. The transition should be complete by the end of 2012.
Elop, 47, a former Microsoft executive, “has moved Nokia forward in many ways,” Ollila told about 3,300 shareholders at the company’s annual meeting today in Helsinki. He cited the CEO’s “huge amount of energy and desire to succeed,” as well as his software background and experience at other companies. “The board stands behind this new strategy.”
Ollila, 60, who was CEO from 1992 to 2006 and built Nokia into the world’s largest mobile-phone maker, today commented on Elop’s performance for the first time at an annual meeting. The company’s share price has fallen by about two thirds since Apple Inc. (AAPL) introduced the iPhone in 2007. Its market capitalization last month fell below that of Taiwanese smartphone maker HTC Corp. (249
It has since retaken the lead.
Nokia rose 0.2 percent to 6.31 euros at 5:22 p.m. in Helsinki trading, giving it a market value of 23.6 billion euros.
Ollila reiterated today that he is willing to serve until next year’s annual general meeting.
Elop’s Compensation
Elop will be rewarded at the end of 2012 with extra Nokia shares if he manages to raise the share price above 9 euros, according to a company filing. The payout will be maximized if shares hit 17 euros. He will also be compensated if the company places in the top half of a selected peer group for total shareholder return, according to the filing.
Jouko Karvinen, CEO of Finnish papermaker Stora Enso Oyj, Kari Stadigh, CEO of Finnish insurer Sampo Oyj, and Helge Lund, CEO of Norway’s Statoil ASA are expected to be elected to the board today, along with Elop. Lalita Dileep Gupte, an executive at India’s ICICI Bank, and former Finnair Oyj CEO Keijo Suila are leaving the board.
Smartphone Share
First-quarter net income declined 1.4 percent to 344 million euros, Nokia said last month. Handset revenue rose 6.4 percent to 7.09 billion euros ($10.5 billion), surpassed for the first time by iPhone sales of $12.3 billion in the period.
The company’s smartphone market share fell to 30.8 percent at the end of last year, according to researcher Gartner Inc., a 20 percentage point drop since Apple brought out the iPhone and raised customer expectations for integration with services and ease of use.
Google Inc. (GOOG)’s Android smartphone software, offered on devices from dozens of vendors, has established itself as the challenger to iPhone, and is expected to pass Nokia this year as the world’s biggest smartphone system, according to Gartner.
Nokia, which helped put mobile phones in pockets from Bhutan to Bolivia, also manufactures simpler phones that accounted for about half of its revenue and 78 percent of units shipped last year. Elop calls this business the “second pillar” of his strategy and says the third consists of research and development for “the next disruption” in mobile technology.
To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net
To contact the editor responsible for this story: Kenneth Wong in Berlin at kwong11@bloomberg.net
http://www.bloomberg.com/news/2011-05-03/nokia-chairman-says-board-is-pleased-with-choice-of-elop.html?cmpid=yhoo
| 