Nokia's new CEO has a mobile mountain to climb

Nokia is replacing Chief Executive Olli-Pekka Kallasvuo, who proved unable to address the phone-maker’s loss of the smartphone crown in the last few years, with Stephen Elop, formerly of Microsoft Corp. Nokia has two main issues to address: a steep loss in earnings and a market share in leading edge mobiles that is being assaulted by iPhone/Android/RIM. Its share price is consequently taking a beating. And let’s not forget the ongoing nightmares of leaked of protoypes, loss of its fanboys, and its CTO.

But at least Elop is sounding a realistic tone: “My role as leader of Nokia is to lead this team through the period of change, take the organization through this period of disruption…to meet the needs of its customers, while delivering superior financial performance,” Elop said at a news conference in Helsinki, reports the WSJ.

Mr. Elop was formerly the head of Microsoft’s business division. He starts on September 21, at a tricky time – Nokia World (the firm’s annual talkfest London) is only next week so he will be unable to make a Steve-jobs-like entrance onto the stage and set a new tone for the organization.

Prior to Microsoft, he was chief operating officer at network company Juniper Networks Inc. and president of Adobe. So, no hard-core mobile experience then but plenty of smarts about the North American market.

Elop is a Canadian and the first non-Finn to run the company, ever. I’d love a ring-side seat when he takes his first meeting with a management team that has been in place for 20 years or so.

Perhaps the Canadian connection helps in a different manner, in that the Finnish press criticized the company for looking for an American CEO. So that might play well to the board. But is that really what Nokia needs right now? Surely better to have a product obsessive like Steve Jobs.

Nokia has made a mountain of mistakes, from arrogantly thinking the U.S. public would switch from CDMA to GSM a few years ago (so ignoring CDMA phones), to the launch of the iPhone and the rise of Android.

In July Nokia announced that net sales in the second quarter of 2010 topped 10 billion euros (that’s a little over $12.8 billion) across units, and that it has shipped more than 111 million mobile devices, up 8% from Q3 2009. However, net income fell to 227 million euros, down from 380 million euros a year earlier. That’s a steep 40% drop in net profits.

It is now clitching at the launch of the N8, it’s Symbian 3 ‘feature smartphone’ and Meego, a partnership with Intel to create high-end devices like smartphones and tablets.