Nokia CEO steps aside for former Microsoft exec

Note: this article was mentioned 4/4/2011 on twitter in order to stimulate follow-up discussion.

It hasn’t been that long since many pundits, self included, read the technology tea leaves and predicted the pressure on Nokia CEO Olli-Pekka Kallasvuo would end in a change at the top.  Sure enough, I was just pointed to a MarketWatch article stating that OPK had resigned and was being replaced by Stephen Elop, a business executive coming from Microsoft.

I take neither pride nor delight in calling this one.  I was certainly not the first to bring it up, and as I’ve said I highly respected Mr. Kallasvuo.  But even if Nokia’s struggles the past few years were not his fault, directly or indirectly, it’s an unfortunate fact of the fast-paced business world that stockholders often need a sacrificial lamb in order to regain confidence.  CEOs, right or wrong, make the most obvious target. 

I don’t know much about Mr. Elop yet, but the brief blurb at MarketWatch sounds promising:

Elop currently heads Microsoft’s Business Division. Before joining Microsoft, Elop held senior executive positions in a number of US-based public companies, including Juniper Networks, Adobe Systems Inc. and Macromedia Inc. He holds a degree in computer engineering and management from McMaster University in Hamilton, Canada, which is his home country

The combination of technical and business savvy is exactly what Nokia needs to regain relevance.  Of course, as always, execution will be the key.

As a stockholder I’m willing to give Mr. Elop the benefit of the doubt for now.  There will be no overnight miracles, although I do expect a pop up in stock value in the very short term.  Elop will need time to settle in, assess the landscape, and then start putting his stamp on Nokia.

Unfortunately, he does come with a bit of baggage.  Microsoft’s recruitment of him involved a home-selling scandal that led to the company changing its relocation benefits policy.  How this may (or may not) impact Mr. Elop’s acceptance by Nokia stockholders, trade customers and industry insiders remains to be seen.

Nokia and Microsoft have enjoyed an interesting competitor-collaborator relationship for some time now.  Elop’s ship-jumping could serve to push that one way or the other.  I’m sure Microsoft’s rich experience in software and gaming play well into Nokia’s strategy and that there’s an expectation Elop will add to needed strengths.  I’m particularly curious to see if there’s an impact on troubled web service Ovi and the upstart operating system formed jointly with Intel, MeeGo.  No doubt we will see some decisive moves on several fronts by the end of this year.

What this change means for the company’s US presence (now teetering at the precipice of Non-Existant) is still highly speculative, but Nokia’s choice of reaching outside of Finland for chief executive leadership is in and of itself a stunning move that hints at increased US interest at least.  Combine that with the company’s recently renewed focus on Silicon Valley, and we may finally witness the US-oriented assertiveness promised, but not delivered, since the mid 2000s.

Wait and see.

37 responses to “Nokia CEO steps aside for former Microsoft exec

  1. You know what? If I were competitors, I’d fear what a NA focused Nokia could bring to the table.

    Granted, Nokia hasn’t exactly taken all the right steps here in the States, but you know what?

    It’s not exactly like they have tried hard, either. When Nokia starts trying, really trying, they should be feared.

    I hope Mr. Elop brings that out in them, how important the backwards little NA market is where it means more to have mind share than actual marker share to be well received.

  2. Will Mr Elop’s appointment mean that Nokia will be steered into having a Microsoft Operating System at its heart and so mean the end of the Linux based phone (computer) such as the N900?

  3. Happy to hear Nokia and Microsoft have enjoyed an interesting competitor-collaborator relationship for some time now.

  4. Well OPK also had a little tax-scandal in Finland when he was appointed as a CEO in Nokia..

    Nokia values indeed…

    He’ll fit right in..

  5. I would not sound to sound pessimistic, but with Mr Elop’s background, I doubt he will be very much committed to open source.

  6. sorry, I meant “I would not like to sound…”

  7. So, mr. Kallasvuo got shown some Ovi (door)🙂

  8. Good for stockholders, bad for customers.

    You know. I completely don’t understand most readers/bloggers/etc. who were laughing off Nokia for last year. It was this company which thank to slashing prices of feature- and smart-phones brought them into financial reach of much more people.

    For comparison – in Poland N8 in preorders is over 2 times cheaper than iPhone 4 – for pre-paid cards, no strings attached – while technologically it is on similar level (some points weaker, some stronger) but overall I would call it draw on hardware.

    The only real difference is in software market – here OPK and Nokia screwed royally, no contest from me.

    I am afraid hiring Elop will probably reverse trend of bringing feature/smart Nokias to the masses and bring to Nokia – in heart old-time company – US culture of kow-towing to quarterly reports.

    Is this guy smart enough to recognize strong points of OPK strategy – Qt, Open Source, Symbian, MeeGo – and leave them going their course? Can concentrate on fixing broken deadlines and services?

    I am not hopeful.😦

  9. The only thing which can save Nokia is a massive restructuring of its divisions and going really viral with their now open Symbian and spreading MeeGo. If masses/developers will support and trust in Nokia then the company will survive and take its share in the modern smartphone/mobile market. Otherwise the Apple and Google (Android) will smash the old good Nokia in about 2 to 5 years.

    • Actually they just completed (another) massive restructuring of divisions. But as to your other point– I’ve never seen that Nokia quite got the concept of viral marketing. That can only improve.

      • And they still don’t – have you seen the latest N8 videos, absolutely cringeworthy. Cheesy. Embarassing. Horrible.

        Apart from the poorly spoken English (aside from the lovely Brenda, Ryan is virtually impossible to understand) they tell you precious little about the N8 and simply bore you to death while your jaw rests on the floor as you wonder how anyone could think these videos were worthy of a make-or-break device for Nokia, which is what the N8 represents.

        And in terms of more viral incompetence, personalised video links were sent to a number of bloggers who then ridiculed the concept. So a major win all round.

        The first action of the new CEO should be to fire the current marketing team as they’re beyond a joke.

      • What really disturbs me is that Nokia is the only manufacturer of the devices based on their Symbian and Maemo mobile platforms. Look what’s happening with Android – Google + Community write the code and thousands of manufacturers like HTC, Moto, SE & no-names from China make the hardware. Now this looks very healthy. Let’s see what’s happening in the Nokia camp: Want Maemo – sure, buy N900; want to try the last hope of Symbian ^3 – go for N8. That’s it? How they are going to compete against “10 new Android-based devices every month”?

        This might be changes when MeeGo is out. They are going to target ARM-based smartphones and Atom-based netbook (plus maybe tablets). There will be definitely diverse manufacturers of netbooks (Asus, Acer, Lenovo, Samsung, Dell, HP are main players here) who might want to adopt MeeGo as a netbook OS, but BE CAREFUL here! This market now belongs to Microsoft and there are not going to step out. They are really aggressive in this niche, remember how they replaced Linux/Ubuntu as the default netbook OS? Moreover, later this year almighty Google is going to take its share in the netbook business with their Chrome OS. So, MeeGo have to fight Google/Chrome and MS over the netbook OS market. And to be honest I have a bad feeling about MeeGo here, but no words anymore, let’s see what happens.

      • allnameswereout

        Thanks for the video, Millhouse. I thoroughly enjoyed the videos, and learned a great deal about Nokia N8 (and which concepts were taken from N900). Not to say I like the phone (first things coming to mind is I prefer Linux, and hardware keyboard) but it certainly explained the hot features of the phone. The videos are clearly targeted at (young) adults, and all 3 personae are from Singapore. The first woman is decent class, the nerd guy is funny, and the third woman is there for normal guys. All explain several aspects of the phone, some key, some unique. One problem is that Youtube isn’t really made for this so the catalogue-like feature isn’t working flawless.

        As for Freeware, Maemo is now dead (its MeeGo), and what made you ever think Nokia is the only distributor of Symbian?

        The netbook market is also saturized; what we see now as trend is touchscreen devices of size between smartphone and laptop (e-reader, ipad, tablet, etc). This market is NOT owned by Microsoft at all, and we’re yet to see what Windows Phone has to deliver.

        Personally, my problem with Nokia devices is the lack of software. I mean, Android has the momentum of OSS mobile/smartphone OS…

      • @allnameswereout

        “all 3 personae are from Singapore”

        Really? I’m pretty sure “Suzy” is Spanish, “Brenda” might be French (French Canadian, maybe?) whereas “Ryan” most likely comes from the planet Zarg.

        Why they got three non-English speakers to give product demonstrations in English is beyond my comprehension – maybe it’s just all too cool for me.🙂

        But OK – if you can be bothered to watch the videos all the way through (which is really, really hard work even for a native English speaker) then you will learn something about the N8, but it’s a ham fisted attempt at viral marketing and marketing of the N8 in general. This is pretty much a make-or-break product for Nokia, and I could have done a better job of this video, in fact *anyone* could have done a better job of it!

        So far I’m yet to see a positive forum post in support of these videos, and those to whom the links were originally sent (ie. selected high-traffic technology bloggers) pretty much mocked the concept. Publicly, in their own video replies[1]. It really makes me wonder how Nokia thinks it’s marketing is being perceived.

        And from what others have said, and my own personal opinion, Nokia marketing is a disaster, here’s one example:

        “Since 2006, Nokia brand development has been a playground for marketing people and some fashion designers based in Soho, London. At the same time external marketing offices from London have been creating campaigns and Web visuals for Nokia basically without no relevant definition or guidance from Nokia’s side. Nokia brand directors, under SVPs and VPs, are from Coca-Cola, McDonalds, Disney and Nike, from companies without any connection to technology, gadgets, functional products or ‘rocket science’ visions – without competence, visions and customer understanding.”[2]

        That pretty well sums it up, unfortunately!😦

        1. http://techwaffle.net/nokia-n8-super-interactive-video

        2. http://www.theregister.co.uk/2010/07/22/nokia_manifesto_risku/page3.html

      • allnameswereout

        [quote]Really?[/quote]Yes. They use SingTel.

        [quote]Why they got three non-English speakers to give product demonstrations in English is beyond my comprehension – maybe it’s just all too cool for me.[/quote]Because the product is aimed international, so it makes sense to let foreigners (most people on Earth) speak in English (spoken by most of their target market).

        Foreigners speak with an accent. Non-native English people are more used to this, I guess. How many % of those bloggers digging the advertisement were from a native English speaking country?

        If I compare this to videos of Peter @ Maemo Marketing N900 then the quality of the videos is better because the features are more clear, its more fun, and it is interactive. It also has a higher marketing/commercial temperature though (‘faking/acting’). But because those videos don’t have a professional character and aren’t official to general public they don’t ‘get the heat’.

        Now, if I go put my television on during the night, I get American commercials from corporations such as TellSell who try to sell me (world-wide) the latest wizzbang with an American accent. “Oh, and it has this and this and this too, and you get that for free for a value of $blah”, 2 persons 1 getting taught about the product (purely acting as a dumbass), consistenly repeating over an over again the same demo, while neglecting important details about the product. No thank you, I’d pick a Nokia advertisement over that any time.

    • Freeware, in response to your other comment about how Nokia is the only one making handsets with Maemo and S^3 – How is that any different than Apple?

      You would say Apple has been successful, yes? And in this context, success means that they are obviously happy with the profit they are making and not concerned about market share.

      Focusing on how one company does business and chiding another for not doing it, is not always helpful. I’m not saying Nokia should or shouldn’t be that way, but Apple copied them for a reason. Apple however just took it one step further, which has worked out quite well for them, in making just *one* device with just *one* mobile OS to support.

      That is not a position Nokia will ever be in globally unless they develop the most lightweight OS around that is able to be used on all the devices they manufacture across all the markets.

      I do think Nokia should focus on only one or two OS’s for the NA market and stick with them for the long term. Much like Google has done with Android, except don’t fragment the heck out of it – But most of that is due to how bloated Android is I imagine.

      I have a feeling Elop is going to bring some changes many of us do not immediately agree with, if the “Microsoft” is strong in him. Some of those changes should help in the NA market, but the trick will be to ensure those changes don’t impact them globally in a negative fashion, as what works here in the US may not work elsewhere, mind share aside.

      I almost wish Nokia had announced a “mini-Nokia” that was going to be a sub-set of them focusing on strictly the NA market, leaving OPK in charge globally but giving Elop carte blanche here in NA. That would have been interesting, had he also had to work within a few concrete boundaries.

      • Well, I almost agree with you, BUT Apple is not open sourcing their iOS, Nokia does. Remember how Apple once opened their Mac OS X (called “Darvin”) and how the community didn’t show any interest? I fear the same thing can happen with Nokia’s Symbian and/or MeeGo now. The controversial thing here is that they are doing the software part as well as the hardware part and going open (also open for another hw manufacturers). There will be definitely some conflict of interest with another players. Interesting how they will settle them.

        Interesting for Nokia could be adoption of Android (I know they’ll never do that) and concentrating on the hardware part. They could even go for Android and still cook their own Symbian or MeeGo (look at Samsung & Bada). But I guess they are too proud to turn to Google🙂

      • allnameswereout

        Darwin, it is called, and its used by the jailbreak community. Darwin is merely the MACH kernel + some userland. All of this was already BSD licensed; Apple just released their own version under their own open source license.

        Various aspects of OS X have also been backported/adopted by the OSS community. Examples include launchd (inspired systemd; a sysvinit replacement), bonjour (zeroconf), Webkit (KHTML), CUPS (purchased by Apple), and various others.

        Like Oracle, Apple is not pro or anti OSS. It just depends on whether they see it is in their advantage.

        Google is just a partner for Nokia, just like Skype and Facebook are. I don’t exactly get why Nokia would be afraid for Google/Android as data miner but not Facebook, but still, having 4 mobile OS seems too much (S40, Symbian, MeeGo, and then also Android). People don’t like too many choices.

        (PS: swype for Maemo would rock :D)

    • It has worked for Nokia for years, it currently works for Apple and Research In Motion. Only Android gets around with “success,” though in their case success is not in sales, as Google is not making money off use of Android as an OS.

      So I think my original question still stands, what makes you single Nokia out in that question? I understand that iOS is not open source, but just because Maemo is does not mean it was also intended to be used by other manufacturer’s like with Android.

      I’m trying to see how this is a bad or disturbing thing, but it just isn’t there as far as I can tell. I can list a few negatives, but nothing that is a hard fact negative, more of a “what if” scenario. Can you elaborate more on why you think it is disturbing, how it would directly affect Nokia’s ability to compete against “10 new Android-based devices” a month?

      • Don’t forget there are a number of large vendors in Japan still shipping Symbian^2 (a slightly modified version of Symbian^1) and the expectation is that they will skip Symbian^3 but ship Symbian^4 devices in future, so it’s not entirely true that Nokia is alone right now with Symbian, whatever the version might be.

        In fact, there are quite a large number of hardware manufacturers and network operators signed up to Symbian Foundation as members of one type or another, and it would be surprising if none of them were to ship Symbian^3 or Symbian^4 based products in future.

  10. Kyllikki Varvisaari

    Dear Randall,
    I think OPK had to leave because he is not “charismatic” leader. The “problems” Nokia is having are largely focused to United States. Nokia’s market share in smartphones in US is effectively 0%. Why ? In the US, there are Verizon, T-Mobile and AT&T for about 300M customers. In Europe, there is mobile operator, which has it’s own network infra, for every 3-5M customers. UK and German operators might have more customers, but this is the big picture.
    What is Samsung doing in US ? Captivate, Vibrator, Fascinate. All of them running Android 2.1, which we all known is bug loaded (e.g. A-GPS is not working etc). Where is the update for 2.2 ? It is still to come. Why ? Because it is terribly difficult to make solid rock update for N+1 Android devices, which are corrupted by Samsung + US operator customization. This is the living example why Nokia did not want to cooperate with US operators. To make it more clear, Samsung is doing this with lower operating margins than Nokia.

    The price Nokia had to pay is 0% marketshare in US smartphones. Coming back to OPK. Nokia’s maybe biggest problem is stock under valuation. One has to remember, in my opinion, that there are about 6.5 billion people on Earth who either don’t want or cannot afford Iphone/Galaxy. Nokia is serving these people. There is one other company, which can do it in profitable way: Samsung. Nobody else cannot do it in large scale, with positive profit margins. The bourse prices are, however, greatly adjusted by analysts. Bulk of the analysts is located nearby Wall Street in Manhattan. OPK failed to tell them a story. OPK is a stone-faced (like most of Finns) guy who speaks English with heavy accent. He is absolutely not charismatic like Steve.J/Ballmer/Ed Zander. I think Nokia is doing fine when compared with Motorola, Samsung, LG, SonyEricsson etc. Nokia could do better, thus I hope new CEO will shake the whole organization. Nokia should improve their pace in product development.
    (these comments are written under white-blue flag, thus possibly biased:-)

    Cheers,
    Kyllikki

    • Wow, actually one of a few people who knows the truth about Samsung. Samsung is a traditional junk-making company, they would sell their mother if a nice price is offered. My opinion is probably very biased, but this company produces EVERYTHING what brings money. Look at their products range: TVs, phones, printers, computers, home appliances … EVERYTHING! They are true GOOGLE OF HARDWARE, aren’t they?🙂 The only different is (and this is a huge difference) that most of their products are shiny and glossy fronts and impressive specs, but they are all half-backed, incomplete, buggy. This is typical for a company which is largely profit-focused and interested to release new products at the very fast pace, no matter what quality. Very much strategy, which Microsoft used to produce their OSes.

      Look, right now what’s the most popular and best selling Android smartphone out there? Is it Google’s Nexus One? Or maybe HTC’s Desire? No, it’s Samsung’s Galaxy S (i9000)! Now, how this company is producing the “best” smartphones out there, leaving behind the ones who produced nothing but smartphones (HTC) for ages, when they even cannot keep consisting naming of their devices? E.g. what’s the exact name of this Galaxy S device? Is it “Samsung Galaxy S”, or is it “Samsung Galaxy S i9000”, or maybe “Samsung i9000 Galaxy S”, or “Samsung I9000 Galaxy S”? Do you know it? Does Samsung knows it?

      Best regards,
      Karen Tamrazyan
      from Freeware Lovers

      • OMG, I have to visit some king of spelling school urgently, it’s getting worse with the time🙂

      • allnameswereout

        “The only different is (and this is a huge difference) that most of their products are shiny and glossy fronts and impressive specs, but they are all half-backed, incomplete, buggy. This is typical for a company which is largely profit-focused and interested to release new products at the very fast pace, no matter what quality. Very much strategy, which Microsoft used to produce their OSes.”

        Sounds like SonyEricson, Apple, Nokia, Samsung, Microsoft, HTC to me.

        Actually, any company is for-profit; and hence not ‘largely profit-focused’ but ‘completely’. They have to abide their shareholders. Besides that, this segment is fast pace. So if they don’t do this, they lose!

        Show me any of their products and I will show you bugs, incomplete (ehh… missing features). However, as the owner of 4 samsung LCDs (2 of which with TV module) I can assure you I never quite stumbled upon irritating bugs within them.

        I have stumbled upon bugs on my iPod touch, Nokia E71, and Nokia N900 though. Some of them quite irritating… but that does not matter. All I want right now, right now, is an iPhone-like device for less the price with more freedom and more technology. Nokia devices such as N900 and N8 already have more technology in some ways. Seems like the Samsung Galaxy S is that device as of now, but I hope something better comes from Nokia this year🙂

    • Having worked for Nokia as recently as 2008, I’m painfully aware of the difficulties they’ve faced in the US. I just don’t think they’re insurmountable. Nokia has a bad habit of quitting just before any other company would make a final push toward success. That’s got to change.

      And they can’t ride the low-margin high-volume horse forever. Nokia’s failure to convert entry phone users into high-end device users will be their doom if they don’t correct it.

  11. well… honestly I sincerely double anyone could come out of Microsoft without being damaged. 10 foot pole is what you need to tough these people.
    Nokia will die on this, bad, bad decision. And it was going badly already. There is a shift in the market and its all about being nowhere near microsoft.

  12. You are right and you are wrong.

    Right – nothing exciting/groundbreaking/etc happens at MS in last 10 or more years.

    Wrong – it still makes shitloads and shitloads of money. And they have sustainable income based on Windows and Office without competition in sight.

    And in these points MS is *very* similar to Nokia. Nothing exciting and shitloads of money in low to midlevel market.

    While Elop may be deathspell to MeeGo and OpenSource it will make Nokia hugely profitable again. As I said in previous post: good for stockholders, bad for customers. Buy stocks and Androids😉

    • allnameswereout

      My initial response was: oh god, a Microsoftie. Run! This is of course bollocks. As soon as he enters Nokia building for first time he is a Nokian, a Canadian, a former Microsoftie, a former RIMmer, a former Juniperian, etc etc. The sum of all his past is what he is now.

      Because this guy hasn’t only worked at Microsoft. This guy has worked for Juniper which is an underdog to market leader Cisco, and their OS (junOS) is based upon FreeBSD. They also cost a shitload less than Cisco.

      Just because he worked for Microsoft doesn’t mean he is anti-OSS or anti-MeeGo, and it doesn’t mean he will make Nokia profitable, or that MeeGo isn’t profitable, or anything like that.

      The problems Nokia is facing are:
      1) They might still be market leader, but are not sen as trendsetter anymore (this is now Apple);
      2) Market share has lowered;
      3) OS adoption has fragmented; winners will be decided;
      4) Non-existant market share in USA;
      5) And really, tons and tons of other problems.

      What Microsoft is to desktop OS and Office is what Google is to search engine. They both use this to finance their new markets, which they have to because this market segment is fast pace and they must adopt other key markets in order to survive and make profit.

      However, Microsoft sells software in their core market, Google sells service (e.g. at the price of your privacy), and Nokia sells consumer/enterprise end products (hardware + software + service + contract). Nokia cannot be compared to Microsoft’s cash cow in this regard because they are a different type of cash cow, and profit margins on software work totally different than physical products.

  13. I hope this won’t mean that Nokia will sells Microsoft Windows mobiles that will flood users with advertisements all the time, I hope really that we will see MeeGo devices, so that there are phones for us who don’t want to be as everyone else.

  14. allnameswereout

    Anssi Vanjoki resigns from Nokia
    September 13, 2010

    http://www.nokia.com/press/press-releases/showpressrelease?newsid=1443986

    (He leaves after 6 months.)

  15. i like your web it very good

  16. Hey,

    What happened to your follow up article?

    _______
    Check out my Health article on Neck pain
    ( http://medsphere.org/people/johnl/blog/2011/04/15/how-to-report-a-hipaa-violation )

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