Elop will replace Olli-Pekka Kallasvuo in the top job on Sept. 21. Kallasvuo loses his board seat with immediate effect and will step down from the CEO position on Sept. 20, Nokia said. Elop will leave Microsoft immediately, that company said.
The reshuffle comes as the world’s largest cell-phone maker battles to compete with companies such as Apple and Research in Motion. While the company continues to enjoy good sales of low-end phones, analysts have faulted Nokia’s smartphone line-up as weak compared to the competition.
While hardware quality is important in any phone, smartphones are much more about software.
“Nokia has traditionally been strong in hardware, but has been found wanting in software,” said Ben Wood, director of research at CCS Insight.
Elop could be the man to change that, according to Wood: “Kallasvuo is a very bright guy, but he has a law degree. Now the guy who will head up the business has a computer science degree. He will bring software expertise to the business.”
While hardware vendors in Europe, and later Asia, led the mobile phone industry in the early years, “A lot of the agenda is now being set on the West coast of the U.S. by Apple, Google and so on,” Wood said.
Elop’s awareness of that market, and his relationships there, are likely to help Nokia boost its performance, he said.In its most recent quarter, the period from April through June, Nokia reported lackluster earnings and sales. Profits dropped about 40 per cent year-on-year to