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Nokia CEO to step down as company still struggles to combat iPhone

post #1 of 203
Thread Starter 
Nokia announced Friday that its chief executive will step down and will be replaced by a veteran from Microsoft, as the Finnish handset maker continues to look to create a smartphone that can compete with Apple's iPhone.

Nokia announced in a press release Friday that Stephen Elop, who is currently head of Microsoft's Business Division, will become its new CEO on Sept. 21. Elop will replace Olli-Pekka Kallasvuo, the current president and CEO, who has served as the company's head sine 2006.

In that time, Kallasvuo and Nokia failed to develop a smartphone that could challenge Apple's iPhone, and have seen their market share slip, even though they remain the largest handset maker in the world. But while Nokia retains the lion's share of overall worldwide handset sales, it is dwarfed by Apple in terms of profit.

In May, Kallasuvuo even publicly admitted that his company has failed to make a splash in the U.S. smartphone market, while Apple has taken the industry by storm with the iPhone and its digital storefront for third-party applications, the App Store. The company's best smartphones have struggled to compete in the high-end market with the likes of the iPhone and handsets based on Google's Android mobile operating system.

"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, Chairman of the Nokia Board of Directors. "The Nokia board believes that Stephen has the right industry experience and leadership skills to realize the full potential of Nokia. His strong software background and proven record in change management will be valuable assets as we press harder to complete the transformation of the company."

Though Kallasvuo will officially resign as president and CEO on Sept. 20, he will continue to chair the Board of Nokia Siemens Networks in a non-executive capacity. His severance package will net him 18 months of gross base salary and target incentive, totaling about 4.6 million euros. He will also be compensated for the 100,000 restricted shares of Nokia stock he was granted in 2007, which fully vest on Oct. 1, 2010.

"The whole board of directors joins me in thanking Olli-Pekka for his thirty years at Nokia, during which he has been deeply involved in developing the company and its operations," Ollila said. "His dedication and contribution throughout the years has been exceptional. The board wishes him every success in his future pursuits."

In addition to competing in the smartphone market, both Apple and Nokia are entrenched in a number of lawsuits related to patents. The first shot in the legal battle was fired by Nokia last October, when it accused Apple's iPhone of violating patents related to GSM and wireless LAN technology. It is believed that Nokia's losses in the market prompted the company to sue over the alleged use of 10 patented wireless standards in the iPhone.

Apple responded to Nokia with its own lawsuit, accusing the Finnish company of infringing on 13 iPhone-related patents. The battle of the two smartphone giants is expected to drag out for years, with both companies looking for a court hearing to be held in 2012. The U.S. International Trade Commission -- the group with which the complaints were filed -- has agreed to look into both Nokia's and Apple's complaints against the other.
post #2 of 203
Quote:
Originally Posted by AppleInsider View Post

Nokia announced Friday that its chief executive will step down and will be replaced by a veteran from Microsoft, as the Finnish handset maker continues to look to create a smartphone that can compete with Apple's iPhone.



Uh Oh.

Dell. Nokia. RIM.

Is a 20% marketshare for the iPhone an unattainable goal now?
post #3 of 203
Good idea. Replace the CEO of a phone company that is slipping severely, with one from a company whose phones have been failing, and call it a good deal.
post #4 of 203
Quote:
Originally Posted by melgross View Post

Good idea. Replace the CEO of a phone company that is slipping severely, with one from a company whose phones have been failing, and call it a good deal.

spot on
post #5 of 203
Quote:
Originally Posted by melgross View Post

Good idea. Replace the CEO of a phone company that is slipping severely, with one from a company whose phones have been failing, and call it a good deal.

Tell you what: If and when you sit on the board of a multi-billion dollar company that sells more product in their category than any other company in the entire world, THEN you will get to choose a new CEO.

Until then, I think I will trust the judgment of those who actually have some credibility in the industry, OK?
post #6 of 203
Quote:
Originally Posted by Newtron View Post

Tell you what: If and when you sit on the board of a multi-billion dollar company that sells more product in their category than any other company in the entire world, THEN you will get to choose a new CEO.

Until then, I think I will trust the judgment of those who actually have some credibility in the industry, OK?

Except the comparisons between Windows and Smart Phones is apples and oranges. Just because you can ship billions of one product doesn't mean that you can repeat that process with a different product - especially when that particular product was doing terribly in the first place.
post #7 of 203
Quote:
Originally Posted by Newtron View Post

Uh Oh.

Dell. Nokia. RIM.

Is a 20% marketshare for the iPhone an unattainable goal now?

I don't think so. Android's marketshare leaps are mostly over now that they're on most major carriers with many handsets. As Apple gets on more of those carriers, its marketshare will continue to increase. Remember they're only directly available to less than one third of the US population now, even though about 35-40% of AT&T's activations are from people coming from other carriers, despite the reputation, fair or not, that AT&T has.

If the iPhone gets on all four major carriers here in the US, Apple could potentially see an almost doubling of sales.

And then there is China. Apple has a very high brand rating there. Hence so many fake Apple products that are replaced with real ones once they become available. Apple's first phones there were hobbled by the government not allowing them to use 3G or WiFi. Yet, over time, sales have become respectable, though not fantastic. Now, with the iPhone 4 approved with both 3G and WiFi, it's expected to do much better. It's also taken off in S Korea, and has 73% marketshare in smartphones in Japan, a market those who don't like Apple were saying that they couldn't crack. Apple still has to get into most South American markets, and there are others around the world they are not in yet.

I think that what we'll see over the next few years is that both IOS and Android phones will take over the market, with Nokia being in a fight with RIM for the third spot. I doubt that WebOS phones will get much marketshare despite Hp now owning them. MS is a wild card, but I doubt very much if they will ever get back to where they were before. Their new WP7 isn't very business friendly, which was their main customer before. RIM has taken over much of that market.

Of course, MS has another problem, and that's the very area in which they've got strength in the PC market. That's the fact that they don't plan, at least for now, of getting into the hardware phone market. This means that MS could be spending much more for R&D and marketing for WP7 than they take in in licensing fees. Right now, I believe that MS gets an average of $7 per phone. Let's say that gets raised to $10, just to make the math simpler. That would mean that even if they sell 20 million licenses in the first year, which is doubtful, they would only take in $200 million. That's pitiful! Considering that the word is out that they will spend $500 million to initially market WP7 when it first comes out, there's no way that they can make any money off this. That amount of money is believable, because MS said that they would spend $250 million to market the Zune HD when it first came out, and this is arguably a much more important product, even though they are not making it themselves.
post #8 of 203
I can see Nokia is setting itself up for a bigger fail by brining in a softie. Sitting on top of an Office Monopoly which you did not even build is way different from running a phone company which actually has to compete.

Look for Nokia to start firing more proxy lawsuits against Apple and Google as that is what Microsoft does nowadays since they can not innovate or deliver anything new.
post #9 of 203
Quote:
Originally Posted by melgross View Post

Good idea. Replace the CEO of a phone company that is slipping severely, with one from a company whose phones have been failing, and call it a good deal.

I rather find Microsoft's new Windows Phone 7 to be fairly intriguing. Certainly too early to call it a failure.
post #10 of 203
Quote:
Originally Posted by Newtron View Post

Tell you what: If and when you sit on the board of a multi-billion dollar company that sells more product in their category than any other company in the entire world, THEN you will get to choose a new CEO.

Until then, I think I will trust the judgment of those who actually have some credibility in the industry, OK?

Not Ok, ok?

Unlike you, apparently, I owned two successful businesses. Large or small, there are some principles that apply.

But we can see how Nokia is flailing. For a couple of years, they were calling the iPhone a "boutique" product, one that would never make more than a small splash in a very large ocean. They were wrong. Then they said that Android would not become as popular as Symbian, and that Symbian was their future in smartphones. Then they developed Meamo as a replacement in their highest model, while denying that it would actually replace it anywhere. Then they bought all of Symbian, then gave it away. Then they do a deal with Intel which merges Meamo with Intel's OS, and call it MeeGo. Then despite a call to let their CEO go, they say it isn't going to happen. But now they've done it.

All during this time, The iPhone, Android and RIM have been taking marketshare away from Nokia, and even with the cheap phones they have become more dependant on, they are losing marketshare. Their profits have been disappearing rapidly, and their stock is a fraction of what it once was.

It's very possible that Nokia will be the next Motorola. When they were the top phone manufacturer, no one though they would decline to where they are today. Now some people think the same of Nokia, but increasingly, more are thinking that it could happen.

And you think they know what they're doing? That's a joke, right?
post #11 of 203
Quote:
Originally Posted by Newtron View Post

Uh Oh.

Dell. Nokia. RIM.

Is a 20% marketshare for the iPhone an unattainable goal now?

(sigh, here we go again.)

It's not about marketshare. It's about profitability. Apple has something like 3% of the cellphone market, but walks away with 40% of the profit.

That's why this guy is stepping down. Symbian devices have way more worldwide marketshare than iOS devices but Nokia is making very little money. The iPhone's gross margin blows doors on everything else in the industry.

Apple is dragging away large sacks of money and the other manufacturers are scraping up the few coins and dollar bills that drop from Apple's moneybags.
post #12 of 203
Quote:
Originally Posted by AppleInsider View Post

Nokia announced Friday that its chief executive will step down and will be replaced by a veteran from Microsoft, as the Finnish handset maker continues to look to create a smartphone that can compete with Apple's iPhone.

iPhone? It seems as though the "virus" that everyone should be looking out for is Android -- at least in the North American market (where Nokia is getting its ass kicked with regards to smartphones).

Apple is the least of Nokia's problems.
post #13 of 203
Quote:
Originally Posted by Curmudgeon View Post

I rather find Microsoft's new Windows Phone 7 to be fairly intriguing. Certainly too early to call it a failure.

Depends on what is meant by failure. MS depends on dominating a market. If they can't do that, they can't force a tie-in to their other products, which is how they've become dominant in the PC market (along, of course, with all the illegal activity they've been caught doing in the two federal lawsuits they lost).

If MS can only manage a one digit marketshare in smartphones, then they've failed. That will never be enough for them to force those tie-ins. In addition there is the money aspect which I've mentioned. The only reason MS can be sucessful as a mostly software OS firm is because of the 90% or so it's got of the industry. Those large numbers and monopoly hold over the industry is what keeps customers coming back year after year. And MS can demand much more for the OS than it can for a phone version.

Compare an average of $60 per license times 350 million for Windows, not including retail sales for much more, to $7 for a mobile license times 10 million, or even 30 million.

Then there is Office. Retail from between about $120 for Student/Teacher, to about $500 for the top professional version. Even licensing seats is at least $75 per seat.

How much could they charge for a phone version? $20, $30, $50?

The economics aren't there. When smartphones had just a small marketshare of phone sales, and R&D plus marketing costs were, as a result, low, it was one thing. But that equation has changed. Considering what they're up against in a world market, costs for R&D and esp. marketing, has gone up dramatically. Those who make phones can afford it, because they are taking in far more money that MS can for it. Sure, MS will do what it always does, suck profits from its monopolies to pay for it, but it will still lose them money. I regard that as a failure, even if they do sell 20 million a year.
post #14 of 203
another one bites the dust, more will fall, just because they can not figure out how to compete....

They are all idiots, they thing apple success is due to hardware, the total solution and not other company in the world have the complete solution like apple has. It is the entire eco-system that have have put around its products that make it a compelling product for people to buy. Plus apple allows many other companies to ride their coat tails.

I have not see any analysis put together a complete market value that apple has created with their products. Ad up all the add-ons, the software, apps, songs, movies and the list goes on and you would be surprise how big it is. Not other company is in this position to create this much wealth.
post #15 of 203
Quote:
Originally Posted by Mazda 3s View Post

iPhone? It seems as though the "virus" that everyone should be looking out for is Android -- at least in the North American market (where Nokia is getting its ass kicked with regards to smartphones).

Apple is the least of Nokia's problems.

We're going to see Android's growth slow down dramatically shortly. The reason why it was measured as so extreme was because it was measured from the first bad phone which was just out on T-Mobile. Measuring sales growth when starting with an unsuccessful phone on the smallest carrier is easy once you're on all carriers with a couple dozen much better phones.

But once that happens, growth levels out. Right now, Android in the US is slightly higher than 30%. Unless people really think that Android will replace sales for iPhones, Blackberries, and others altogether, they simply can't have another year of 880% growth. That was always misleading. Assuming that Apple doesn't grow marketshare, and that RIM doesn't lose too much more, and smartphone growth continues to be at the 35% level, Android can only grow by about double the next year, and that's being overly optimistic. There's just nowhere to go in the Us market, though all of them can grow a lot out of the country as they expand into new markets.

And then what happens if the iPhone lands in Verizon where most of Androids growth has been coming from?

WebOS would be the least of their worries.
post #16 of 203
Quote:
Originally Posted by Curmudgeon View Post

I rather find Microsoft's new Windows Phone 7 to be fairly intriguing. Certainly too early to call it a failure.

I am happy to call it a failure now.
You can check back in a year and take me to task if I am wrong.

Microsoft are competing against Google - who give away their software for free.
Microsoft would need to PAY vendors to adopt WP7 - it would be the only way to lure them away from Android.

C.
post #17 of 203
Quote:
Originally Posted by melgross View Post

And you think they know what they're doing?


I think that you are not qualified to pick a new CEO for Noklia, given that you have never even sat on a single board of directors for a company like Nokia.
post #18 of 203
Quote:
Originally Posted by Newtron View Post

I think that you are not qualified to pick a new CEO for Noklia, given that you have never even sat on a single board of directors for a company like Nokia.

Really? You seem to know nothing of business at all, so I don't see how anything you say is relevant.
post #19 of 203
Quote:
Originally Posted by melgross View Post

Depends on what is meant by failure.

Agreed. Depending on what the speaker means, even something as trivial as somewhat shorter battery life might inspire a poster to use the word in relation to a product.

A difference of aesthetics. One missing feature. Anything.

But if one were to use the word in its typical sense, it would be hard to apply it to something which has not yet even been released.
post #20 of 203
Quote:
Originally Posted by Carniphage View Post

I am happy to call it a failure now.
You can check back in a year and take me to task if I am wrong.

Microsoft are competing against Google - who give away their software for free.
Microsoft would need to PAY vendors to adopt WP7 - it would be the only way to lure them away from Android.

C.

Exactly, why pay the Microsoft tax when a company can use Android for free and return _all_ their profits to their shareholders? Microsoft Windows Phone 7 will fail out of the gate, Microsoft will stab all their partners in the back like they did with the failed Plays for Sure, and make their own phone hardware. This will, like the Zune, continue to fail and be propped up with Operating System and Office Monopoly money.

The real question is how long MS shareholders are going to let their money get pissed away on the failed Zune, Windows Phone, Bing, etc...? Not to mention meritless proxy lawsuits against Apple and Google.
post #21 of 203
Quote:
Originally Posted by Carniphage View Post

I am happy to call it a failure now.
You can check back in a year and take me to task if I am wrong.


C.


I am ... to call the iPhone 5 a failure now. Check back in a year.
post #22 of 203
I'm not the only one not impressed, though our resident business expert Newtron seems to be.

http://www.marketwatch.com/story/res...all-2010-09-10
post #23 of 203
Quote:
Originally Posted by melgross View Post

Really? You seem to know nothing of business at all, so I don't see how anything you say is relevant.

I know that someone who has never sat on a board of directors is totally unqualified to help choose a CEO for a huge multinational megacorporation.

You seem to think you are nevertheless qualified to do so.

That's OK - we can disagree on this one.
post #24 of 203
Quote:
Originally Posted by bullhead View Post

Exactly, why pay the Microsoft tax when a company can use Android for free and return _all_ their profits to their shareholders? .

One reason only: To maximize total profits. All of a small amount is often worse than a portion of a large amount. It ain't the proportion that matters; it is the gross amount.
post #25 of 203
Quote:
Originally Posted by melgross View Post

I'm not the only one not impressed, though our resident business expert Newtron seems to be.

http://www.marketwatch.com/story/res...all-2010-09-10

One need not be a business expert to know that you are totally unqualified to sit on Nokia's board of directors.
post #26 of 203
Quote:
Originally Posted by Newtron View Post

Tell you what: If and when you sit on the board of a multi-billion dollar company that sells more product in their category than any other company in the entire world, THEN you will get to choose a new CEO.

Until then, I think I will trust the judgment of those who actually have some credibility in the industry, OK?

Your arguments aren't any better than when you were TeckStud.
post #27 of 203
Ladies and Gentleman, and still the Heavy Weight Champion of the WOOOORLDD!!!

STEVE JOBS!!!!!!!

With a 4th round KO, right in the kisser, this contender had no chance! The Champ's right hook of the iPhone 4 delivered the crushing blow that toppled the leading contender Nokia CEO from the top spot!!!!
post #28 of 203
Quote:
Originally Posted by melgross View Post

We're going to see Android's growth slow down dramatically shortly. The reason why it was measured as so extreme was because it was measured from the first bad phone which was just out on T-Mobile. Measuring sales growth when starting with an unsuccessful phone on the smallest carrier is easy once you're on all carriers with a couple dozen much better phones.

But once that happens, growth levels out. Right now, Android in the US is slightly higher than 30%. Unless people really think that Android will replace sales for iPhones, Blackberries, and others altogether, they simply can't have another year of 880% growth. That was always misleading. Assuming that Apple doesn't grow marketshare, and that RIM doesn't lose too much more, and smartphone growth continues to be at the 35% level, Android can only grow by about double the next year, and that's being overly optimistic. There's just nowhere to go in the Us market, though all of them can grow a lot out of the country as they expand into new markets.

And then what happens if the iPhone lands in Verizon where most of Androids growth has been coming from?

WebOS would be the least of their worries.

Yeah everyone looks at the 880% and not the numbers behind it. Going from 1 to 880 is 880% growth is that impressive. It is not like they grew form 1M to 880M in one year.

Apple put out an interesting number last week which was 275K per day of iOS activations, this is more then iphone, they are not showing a % but the actually number this is impressive consider Android and WebOS and other can not show the same numbers.

Again these companies are not competing against Iphone they are now competing against iOS, Apple change the game on the industry and they all miss that Apple is now playing in a new sand box which is much larger.

The same thing happen to apple back in the late 80's and early 90's, apple thought they were competing again dell, hp and compaq when in fact they were really competing again MS and Intel.
post #29 of 203
Well, the biggest error competitors are doing is to try making a phone that "competes with the iPhone".

All other mobile/smartphone companies should put more effort into doing something special, instead of trying to copy existing tech and adding some features.
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post #30 of 203
Quote:
Originally Posted by melgross View Post

Good idea. Replace the CEO of a phone company that is slipping severely, with one from a company whose phones have been failing, and call it a good deal.

well said
post #31 of 203
Quote:
Originally Posted by Newtron View Post

I know that someone who has never sat on a board of directors is totally unqualified to help choose a CEO for a huge multinational megacorporation.

You seem to think you are nevertheless qualified to do so.

That's OK - we can disagree on this one.

What you don't know is that people sitting on those boards aren't always any more qualified. You also don't understand that companies, large and small, look for the same attributes. So while my companies never had more than 85 employees each, one was a public company, and we had to understand our markets just as well as Nokia has to look at theirs in a bigger market.

You can continue to make silly remarks about this, but it doesn't change the fact that this was not a great move, and that we're already seeing people whose business it is to follow that industry criticizing this selectio.
post #32 of 203
Quote:
Originally Posted by Newtron View Post

One need not be a business expert to know that you are totally unqualified to sit on Nokia's board of directors.

I never said I was qualified to sit on their BOD, though, I could be, after seeing all the bad decisions they've made in the past three years.
post #33 of 203
Quote:
Originally Posted by melgross View Post

Good idea. Replace the CEO of a phone company that is slipping severely, with one from a company whose phones have been failing, and call it a good deal.

Agreed, shame they didn't hire SB though. No wait I'd rather he stayed and destroyed MS.

Please people add Newtron and Blackintosh along with his TeckStud handleto your ignore lists!
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini, SE30, IIFx, Towers; G4 & G3.
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Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini, SE30, IIFx, Towers; G4 & G3.
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post #34 of 203
Quote:
Originally Posted by Newtron View Post

Uh Oh.

Dell. Nokia. RIM.

Is a 20% marketshare for the iPhone an unattainable goal now?

1) Whose goal was it?

2) You can't eat market share, you eat profit/cash flow.
post #35 of 203
Quote:
Originally Posted by Newtron View Post

Tell you what: If and when you sit on the board of a multi-billion dollar company that sells more product in their category than any other company in the entire world, THEN you will get to choose a new CEO.

Until then, I think I will trust the judgment of those who actually have some credibility in the industry, OK?

Put your money where your mouth is, and buy NOK, OK?
post #36 of 203
Quote:
Originally Posted by Maestro64 View Post

Apple put out an interesting number last week which was 275K per day of iOS activations, this is more then iphone, they are not showing a % but the actually number this is impressive consider Android and WebOS and other can not show the same numbers.

200,000 Android Devices Activated Daily Says Eric Schmidt

http://nexus404.com/Blog/2010/09/07/...tions-per-day/
post #37 of 203
Quote:
Originally Posted by melgross View Post

What you don't know is that people sitting on those boards aren't always any more qualified.

What I know is what I have said. You are not qualified to sit on the BOD of any company like Nokia.

You can change the subject to anything else you desire, but all of it is beside the point.
post #38 of 203
Quote:
Originally Posted by melgross View Post

I never said I was qualified to sit on their BOD,


Correct. It was a necessary premise which went unstated.
post #39 of 203
Quote:
Originally Posted by Newtron View Post

200,000 Android Devices Activated Daily Says Eric Schmidt

http://nexus404.com/Blog/2010/09/07/...tions-per-day/

That includes upgrades, apple claim is theirs are new activations only.

Stand corrected, google claim no upgrades, however, they do not have complete control over this, Motorola sends out their own releases and updates without Googles involvement, I am not sure how they determine this.
post #40 of 203
Quote:
Originally Posted by anantksundaram View Post

Put your money where your mouth is, and buy NOK, OK?

Where my mouth is at is calling out people who think they are more qualified than the members of the BOD of a multi-billion dollar megacorporation which sells more product than anybody else in their industry.

Buying Nokia will not constitute putting my money where my mouth is, unless Nokia puts these guys on their board of directors. In such an event, I will be happy to short Nokia immediately.
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