Will a New CEO Reverse Nokia’s Fading Fortunes??

by Matt Klassen on September 13, 2010

In the mobile world I would wager a guess that no other mobile company has compiled the same dominant market strategy that Finnish tech company Nokia has. All one has to do is wander the backwater parts of the world to realize that if you can convince poverty-stricken individuals in Mexico, Bedouin nomads in Jordan, the Uros of Bolivia who live on floating islands made of reeds and everyone in between that they need a Nokia cellphone, you’re going to make some money.

But it is increasingly looking like the bane of Nokia’s worldwide cellphone dominance was the advent of the smartphone, the handheld mobile computers that often moonlights as phones and the one device that increasing amounts of people the world over are discovering they can’t live without, as since then Nokia has watched its market share slowly drift away. Further, in the face of this vastly superior mobile device Nokia has faced one seemingly insurmountable problem: they can’t build one that anyone wants to buy.

So with that it should come as little surprise that Nokia has ousted its President and CEO Olli-Pekka Kallasvuo, the man brought in specifically to bring Nokia into the smartphone age, and have replaced him with former Microsoft executive Stephen Elop. But with Microsoft yet to offer anything of its own in the smartphone world is Elop really the right choice to reverse Nokia’s fading fortunes

For years now Nokia has watched the smartphone market grow, unfazed by the new arrival to the mobile scene, arrogantly ignorant of the direction of the market, and cocksure about its own place at the top of the cellphone heap. But now with the spectacular success of the smartphone genre Nokia has found itself forced to play catch-up, and with the prevailing attitude of “we’re the best” still dominating the Finnish company’s R&D strategy, its really no wonder Nokia is watching its market share rapidly disappear.

As it is in sports so often it is in business, and like the myriad of coaches that routinely get fired from almost all of America’s major sports franchises I’m sure that Nokia’s woes aren’t all Kallasvuo’s fault, but it’s always easier to fire the guy at the top instead of replacing all the incompetent underlings cowering below him. But will this switch be enough to change the air of complacency and arrogance that hovers over Nokia? I doubt it.

While the Microsoft online biography of Elop does paint him as a component executive, there are a few details that concern me as he steps into the CEO role at Nokia. First, he has no direct mobile experience. As the president of Microsoft’s Business Division, Elop oversaw the development and deployment of Microsoft’s business solutions. What all accounts, he has little experience marketing mobile devices, he has had no direct experience developing mobile devices, and although he was part of the company’s senior leadership, I have yet to see anything noteworthy emerge from Microsoft’s mobile strategy to make me think that their senior staff have any sort of successful mobile strategy.

What does this all add up to? In business as in sports, I certainly understand the value of a shakeup. If the guy at the top isn’t safe, then who really is? But with the departure of Kallasvuo and the arrival of Elop has Nokia improved itself? It doesn’t seem so, but only time will tell.

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Written by: Matt Klassen. www.digitcom.ca >. Follow TheTelecomBlog.com > by: RSS >, Twitter >, Identi.ca >, or Friendfeed >

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