Nokia taps Microsoft exec Elop as new CEO

Nokia (NYSE:NOK) shares surged Friday after the embattled device maker appointed Stephen Elop president and CEO, replacing Olli-Pekka Kallasvuo. Elop currently leads Microsoft's Business Division--his résumé also includes senior executive roles with U.S. firms including Juniper Networks, Adobe Systems and Macromedia. Elop will assume his new post on Sept. 21, one day after Kallasvuo exits; Kallasvuo, who first joined Nokia in 1980 as corporate counsel and ascended to CEO in mid-2006, will immediately vacate his position on the Nokia Board of Directors, but will continue to chair the Board of Nokia Siemens Networks in a non-executive capacity. 

"This is the best thing Nokia could do for investors who had grown tired of hearing it knew how to fix its problems," Gartner mobile device and consumer services research director Carolina Milanesi tells MarketWatch. "They may not have the right products yet, but at least now they've gone and done something at the management level." However, Milanesi also expresses doubt over the decision to replace Kallasvuo with Elop: "We're really of two minds about him. He comes from a software background, which is good, but he also comes from a company that's had the same issues as Nokia in terms of adapting to a new world."

During Kallasvuo's tenure at the Nokia helm, the company's longtime dominance of the worldwide smartphone market eroded in the face of stiff competition from new entrants like Apple and Google--as of Q2 2010, Nokia controls 34.2 percent of the international smartphone market, retaining its global lead but down 2.6 percentage points year-over-year. Kallasvuo responded to the challenge by striving to transform Nokia into a true multimedia superpower commanding the futures of the mobile web, mobile music and mobile gaming, an effort culminating in the 2009 launch of the Ovi Store digital content marketplace. As of June 2010, Ovi Store downloads now average more than 1.7 million a day.

Other initiatives proved far less successful, however. Mosh, a social networking effort introduced in August 2007, was shut down less than two years later. Comes With Music, an all-you-can-eat service unveiled in late 2008, has also struggled to attract consumers--in the fall of 2009, digital music research firm Music Ally reported that fewer than 108,000 subscribers worldwide had signed up for Comes With Music in its first year, with analysts blaming inferior handsets and confusing marketing messages for the service's slow start. Last month, Nokia said it will rebrand Comes With Music to fit under the Ovi multimedia umbrella.

For more on the Elop hire:
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