Nokia’s New CEO May Whip Up Savvier Smartphone Strategy

Nokia has announced that President and CEO Olli-Pekka Kallasvuo will leave his position on September 20, handing the keys to Microsoft executive Stephen Elop.

Kallasvuo’s departure is likely due to Nokia’s failure to crack the smartphone market — the U.S. market in particular — under his guidance. That goal appears to be the main mission for the new CEO.

Microsoft doesn’t seem particularly aggrieved by the move, even though the two companies could become competitors in the smartphone space: CEO Steve Ballmer wished Elop well in a statement.

Microsoft did not respond to the E-Commerce Times’ request for comment by press time.

Turning the Ship Around

Elop’s move to Nokia has the potential to shake up the industry — but it will be a long slog to correct the missteps the company has made.

“Nokia has been trying to crack the smartphone market for years, butit has approached it in a very stubborn and high-handed manner,” AllenNogee, principal analyst at In-Stat, told the E-Commerce Times. “I think Nokia has gotten to the point where it is so frustrated withits lack of progress, they finally got rid of their CEO.”

The company never embraced the different drivers in the U.S. and Asiansmartphone markets, he noted. It has not forged any long-termpartnerships with major U.S. carriers. The end result has been devices that are not wellmarketed to smartphone buyers.

For instance, next week at Nokia World, the firm will unveil the N8, the latest Symbian smartphone, priced at US$549.

Turning to Microsoft

If Nokia’s goal is to penetrate the U.S. smartphone market, itmight have picked an executive from a company that has actually penetrated that market, suggested Nogee.

“Microsoft represents a North American point of view that Nokia needs, but let’s face it, itssuccess in the smartphone market has not been anything to brag about,” he remarked.

Another challenge facing Nokia, said Nogee, is one that even anexecutive with Apple or Android experience ultimately mightnot be able to address: Nokia’s image as a feature phone staple.

“Nokia has a huge market in the low-end part of the market, which insome ways could present a negative image among people who wantstate-of-the-art smartphones,” Nogee pointed out.

On the Plus Side

Still, there is much to like about Elop’s appointment, according to Azita Arvani of the Arvani Group.

Nokia is basically admitting that it needs a big change in itssoftware platform strategy, she told the E-Commerce Times. “Nokia’s Symbian platform was not keeping up with the Apple’s iOS or Google’sAndroid — and, going forward, Symbian’s strategy was not promising.”

Then there is the MeeGo platform, in joint development with Intel.

“It was difficult to envision how these two platforms were going tolead Nokia into a leadership position in the modern smartphone arena,” said Arvani,” but Elop has a lot of experience in the software arena that Nokia ishoping can help with straightening its software strategy.”

The fact that he is North American is also important, she noted.”The U.S. is the new hotbed of mobile and wireless innovations,especially in the smartphone arena. In the past, Europe may have had alead over the U.S. But in the last few years, in the post iPhone era,where mobile and Internet have converged much more rapidly, it wouldbe best to have a U.S. executive — and even though Elop is born inCanada, he is considered a U.S. executive — leading the company.”

There are risks with this appointment, though. Elop has has movedaround to different companies every couple of years and does not haverecent mobile telecom connections, Arvani pointed out. “So, it would be interesting towatch how he balances short-term results versus long-term goals forNokia.”