Can Stephen Elop revive Nokia?

Nokia has hired Microsoft's Stephen Elop as its new CEO. Can the Finnish manufacturer recover ground lost to Apple and Google - and how bad are things at the company anyway? Mr Elop, the head of Microsoft's Business Division, will take over as Nokia chief on September 21, the company said in a statement on Friday. Nokia, the Finnish telecoms giant, has named senior Microsoft executive, Stephen Elop, as its new chief executive and president, replacing Olli-Pekka Kallasvuo. Mr Kallasvuo will resign his position on Nokia's board of directors, but continue to chair the Board of Nokia Siemens Networks in a non-executive capacity. "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," said Jorma Ollila, Nokia's chairman and former chief executive. Speculation over the potential departure of Mr Kallasvuo has been rife this year, as the world’s largest mobile-phone maker has struggled in the face of the growing smartphone market. Since Apple introduced the iPhone three years ago, changing the mobile-phone industry with thousands of applications, Nokia shares have slumped more than 60pc. The company has yet to develop a smartphone with the same mass appeal and has been forced to cut prices, sacrificing profits to defend its shrinking market share.The mobile phone market has changed tremendously over the past 10 years. It's no longer a handset, it's now more about services and operating systems.As a developer the appointment of Mr Elop was an acknowledgement by Nokia that its leadership should change to reflect the fact that its product and the entire mobile phone industry had also drastically changed.Am so delighted as I see that they are now looking for a more software-oriented leader. 

Nokia share rose as much as 49 cents, or 6.3pc, the biggest intraday jump since May 10, on the news and was trading up 5pc at €8.10 by lunchtime in Helsinki. Mr Elop said: "I am extremely excited to become part of a team dedicated to strengthening Nokia's position as the undisputed leader of the mobile communications industry." Mr Elop joined Microsoft from network infrastructure company Juniper Networks in January 2008, where he was the chief operating officer. Mr Kallasvuo has been with Nokia for more than 30 years and became chief executive in 2006 when Jorma Ollila stepped down. He has served on the board of directors since 2007. The biggest phone maker in the world is not Apple, despite all the media hype, and it’s certainly not Google, who have never manufactured a phone of their own. Now, as has been the case since 1998, it is Nokia. But on yesterday as I celebrated Eidd Ul- Fitr with a female I got this email about change of guard at Nokia.Kai said that the company finally ditched the man who had overseen the Finnish giant’s decline, which culminated in the announcement earlier this year that operating profits had crashed by 40 per cent. Olli-Pekka Kalasvuo first joined Nokia in 1980, and rose to be Chief Executive Officer in 2007; Microsoft’s Stephen Elop replaces him, and the challenge, quite simply is to reassert Nokia’s place at the forefront of mobile phones.As a developer there is certain reality check, however, is necessary, before Nokia’s obituaries are written: not only does the company remain the largest mobile maker in the world, and also account for a third of the entire Helsinki stock exchange: it is also a major player in the emerging markets that will drive growth in the future. Nokia is fighting not Apple or HTC, but manufacturers little-known in the UK, such as ZTE, in emerging markets that include China and India. Its strategy is to present affordable, relatively unsophisticated handsets that its software turns into “one box solutions”. So a mobile sold in India might connect basic web services, messaging and phone calls in a way that the market has yet to see from other companies. It’s not only proving fairly successful, but it’s also a way of establishing Nokia as the company of choice for a new, untapped range of populations. It’s also what Apple have been doing in the West with their iPods and iPhones for years. 

When it comes to Europe and the West, for that matter, such is Nokia’s relationship with mobile networks and retailers that their products sell impressive quantities nonetheless. Even so, Nokia has suffered a catastrophic loss in what Ovum analyst and personal friend of mine for many years Tony Cripps calls “mindshare”. At the top end, of the market, it has ceased to exist. Then company’s current flagship product is the N8, which is based on the decrepit Symbian 3 operating system. Although its features are genuinely impressive, from high definition video to dolby surround sound, and its design is rather satisfying, the phone’s interface remains a throwback to 2005. In mobile phone terms, that might as well be 1895. The company’s forthcoming global summit, Nokia World, will be held in London,UK this week, and Tim Berners-Lee, the inventor of the web, will deliver a keynote address. Stephen Elop does not officially start until later in the month, but he’s been recruited, Nokia’s chairman has already said, because of expertise in software and “change management”. Indeed, it is not for a slice of Microsoft’s track record in mobile phones that Nokia has hired Elop. So the challenges the new man at the top will face are two fold, and possibly by some definitions conflicting, too. “In many respects they’re still doing as great job,” says Cripps. “But from a Western perspective they’re seen to be a trailing.”That means Elop must manage sales of massive volumes to burgeoning developing markets, while also concentrating on the new handsets that are likely to be unveiled in London, based on a new operating system called Meego. It may yet provide the revolution Nokia needs; but by the end of October Microsoft’s new phone operating system will be with consumers, too. That would mean software developers like me who will make the programmes that define how a global population interacts with mobile phones, will have to choose between Google, Apple, Microsoft and Meego. It seems unlikely that all four will survive and my question is will nokia eat a humble pie and embrace android the future of mobile operating system? Only time will tell.