Nokia's New CEO

Yesterday, Jorma Ollila of Nokia announced he would be stepping down as CEO in June 2006. Succeeding Ollila will be Olli-Pekka Kallasvuo, head of Nokia's mobile-phone business. Kallasvuo will first become president and COO in October and ascend to the CEO post when Ollila leaves.

Albert Lin, analyst at AmTech Research comments about outgoing CEO Ollila in the Fort Worth Star-Telegram (site registration required). "Growth rates were astonishing when he took over. Beforehand, Nokia was this weird amalgamation of businesses manufacturing all types of items. It had very little focus. When he decided on mobile telecom, it was considered very risky, but now many see it as a brilliant move."

On the selection of Kallasvuo, analysts were more guarded since he is viewed as an operations guy with less known about his strategy and vision for the company. In the Star-Telecom, Gartner analyst Hugues de la Vergne sees the change in a postive light. "Sometimes, new leadership can help inject new energy, but Nokia's appointment of an insider to succeed Ollila indicates the board feels that the company is still in good shape," opined de la Vergne.

In BusinessWeek (site registration required), Richard Windsor, an analyst with Nomura International in London, discussed Kallasvuo's operational strengths. "He provided very good and steady management of finance, and has done a reasonable job with mobile phones. Kallasvuo took over the mobile-phone group just when everything went wrong and he has managed to gain back share due to his operational focus."

In the same article, UK analyst Neil Mawston at Strategy Analytics noted that Kallasvuo was a long-time company insider and might not bring new thinking to the role of CEO that an outsider could, such as Ed Zander at Motorola. "Motorola had an external candidate come in who really refreshed the company. Nokia has recovered from the downturn in 2004, but an outsider might bring in more fresh ideas."

Over at the M:Metrics Blog, analyst Mark Donovan posted that the selection of Kallasvuo is a clear signal that "the company's focus at the top is on business execution and fiscal management and not innovation."

He looks at two internal candidates that were passed over for the CEO position, Pertti Korhonnen and Anssi Vanjoki, and concluded that selecting either "as CEO would have put an innovator at the top." Korhonnen, Nokia's CTO, formerly led the company's mobile software group, that "has been an important pocket of technical innovation for Nokia, spawning the Series 60 and Series 80/90 platforms." Vanjoki, the EVP and GM of Multimedia, is leading "Nokia's efforts in video, music, and gaming which to date have met with mixed success in the marketplace but have pushed the envelope of our conception of what a mobile terminal can be," said Donovan

Kallasvuo seems to be the safe choice at this point, but with the mobile and consumer electronics markets converging only time will tell if he can ring up the innovation and results necessary for Nokia to succeed...