Ollila Joins Exodus From Nokia

The revolving door is spinning fast at Nokia, as the company tries to reposition itself to compete with a wave of new smartphones including Apple’s iPhone and a bevy of Android-based devices.

The latest news from the boardroom is that Chairman Jorma Ollila, the executive credited with turning Nokia into the world’s largest cellphone maker, will step down in 2012.

Late last week, the company announced its president and CEO, Olli-Pekka Kallasvuo, would be replaced by Stephen Elop, who has been leading Microsoft’s business division for its Office suite.

On Monday, Anssi Vanjoki, the executive vice president of markets and the head of Nokia’s smartphone business, announced he would leave within the next six months, saying he “felt it was time to seek new opportunities.”

It’s possible that Vanjoki was frustrated at being passed over for the CEO spot — or perhaps he saw the writing on the wall.

Rough Sailing

The executive shakeup comes during turbulent times for Nokia. Its stock fell more than 20 percent this year. Given the company’s poor performance, there has been rising speculation that Kallasvuo would not survive. He will be replaced by Elop on September 21.

The announcements that Ollila and Vanjoki would also depart soon haven’t sent shockwaves through the industry. Although Chairman Ollila was credited with the expansion of Nokia’s cellphone business, he was also tagged with the company’s decline.

The shadow of the shakeup falls particularly darkly on Vanjoki, since he’s been in charge of the smartphone business, which is facing such stern competition.

“It was expected that Anssi Vanjoki would resign,” said Aziti Arvani, principal of the Arvani Group. “When the new guard comes in, they have their own management style. Vanjoki was at risk because he was heading the smartphone division, and it was having the biggest problems. They were just not making a dent in the iPhone business.”

Nokia was once at the forefront of smartphone development, Arvani noted, but the company’s edge has dulled in recent years.

“Nokia lost its leadership and their new phones were not able to compete in the smartphone market,” she said. “Vanjoki, as the head of the smartphone division, was blamed for that.”

With Nokia facing challenges in the smartphone business — particularly from Apple — there was pressure for a major change in management.

“The stockholders were pressuring the company. They thought it wasn’t headed in the right direction,” said Allen Nogee, principal analyst for wireless technology at In-Stat.

Too Focused on Europe?

Part of the problem was Nokia’s focus on the European market over North America, said Nogee.

“Nokia has some competent smartphones, but they’re not with U.S. carriers,” he pointed out. “Nokia has been a stubborn company with a very European-centric view.”

Ironically, the executive changes hit the news just when Nokia was introducing a new family of smartphones. Building out its smartphone line following the recent introduction of its flagship N8, Nokia introduced the Nokia E7, a business smartphone that comes with Microsoft Exchange ActiveSync on board. Another new product is the Nokia C7, a smartphone designed specifically to support social networking. The Nokia C6 is a small smartphone sporting a 3.2-inch display and full touch capabilities.

Not everyone is convinced Nokia can face it’s formidable challenges from Apple and other smartphone manufacturers.

“We can only hope new blood will change their direction,” said In-Stat’s Nogee. “They have to change their view of the market. They’ve been the leader so long, they begin to think they can walk on water. But the smartphone market is different, and other players have shown they can adapt and learn what people want.”