Nokia, under siege from Apple and Google, is reportedly looking for a new CEO in its efforts to stem its market share losses and once again become competitive at the highest end of the smartphone market.
Nokia may still be the world's top smartphone vendor, but it has
seen its market share points slip away in recent months, and officials
are looking for ways to stop the leaking.
Most recently, reports have surfaced that the company is looking for
a new CEO. While a U.S. spokesperson for Nokia wouldn't comment on the
matter, the Wall Street Journal reported that it learned of the move to replace current CEO Olli-Pekka Kallasvuo from "people familiar with the situation."
Industry analysts have been saying for a while that Nokia officials
need to make changes in how the company approaches the market. While a
new top executive may be a step in that direction, it isn't the only
one needed to help it better compete with the likes of such
heavyweights as Apple and devices running Google's Android operating
system.
Analysts have attributed Nokia's losses to its inability to compete
at the high end of the smartphone market, where Apple's iPhone and
other Android-based smartphones rule.
"Nokia has been losing marketshare in the U.S. and it has been
losing profitshare to American firms like Apple and [Google], which in
turn is unsettling the powerful U.S. investment community and many
investors are now calling for a change at the top," Neil Mawston, an
analyst with Strategy Analytics, told eWEEK.
The type of CEO required for such a task, Mawston added, will not
only be difficult to find but will face a tremendous number of
challenges from day one, including keeping "existing clients in almost
200 countries happy, while simultaneously delivering a decisive
strategy to regain lost customers in the United States, the world's
most important handset and services market."
Added to that, "the new CEO will need to understand not just cell
phones, but also computers, fashion, software, Internet services and
mobile advertising," he said. "There are very few people on Earth who
can meet those criteria, so Nokia is probably going to have to pay big
bucks to get the right man or woman, and they will likely come from a
high-profile American or European company such as [Hewlett-Packard],
Cisco [Systems], Qualcomm, Motorola or even within Nokia itself."
More than bringing in a new chief executive, Jack Gold, an analyst
with J. Gold Associates, said what Nokia must do is re-evaluate its
smartphone strategy and step away from its investment in the Symbian
operating system.
To a degree, Nokia is already moving in this direction.
In June it announced that going forward, its N-Series handsets - its
most advanced devices - will run MeeGo instead of Symbian. In February,
Nokia, partnering with Intel, introduced the MeeGo OS, which is a
combination of the respective companies' Maemo and Moblin platforms.
In a June 24 report, Gold suggested Nokia take two-fold action:
adopt Google's Android OS and release a line of phones that runs
Android with a custom Nokia user interface, the way HTC does with Sense
and Motorola does with Blur; then, make Android the platform for
Nokia's lower-end smartphones and MeeGo the platform for its
highest-end devices.
"Nokia, it's time to cut your losses and move on," Gold wrote -
advice that may also apply to Kallusvuo. "If not, you will be relegated
to a me-too vendor in the smartphone space where most of the profits
lie and be forced to primarily compete head on in the cutthroat low-end
consumer device space against the many up-and-coming vendors from the
Far East."
Nokia is scheduled to report its fiscal second-quarter 2010 earnings
July 22. In June, however, it had already warned of lowered profit
expectations, due to the "competitive environment, particularly at the
high-end of the market," and analysts still very much have this in
mind.
Analysts with investment-firm Jefferies have warned that the second
half of 2010 will be similarly challenging for Nokia. The firm told
investors in a July 21 research note, "We see Nokia struggling to
re-capture consumer interest in high-end handsets and cap its own
market-share leak."
Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.
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