Having publicly blamed the troubled Nokia Siemens Networks JV for its Q3 loss of over €900 million, Nokia's CEO, Olli-Pekka Kallasvuo, is now also holding responsible a lack of smartphone components for its poor performance in the mobile phone sector.
In an effort to wrench the company out of its steeply downward spiral, Kallasvuo has announced a reshuffle of its senior executives and split its bloated mobile phone division into two units. Smartphones will now become a separate unit under the direction of Nokia veteran Jo Harlow, with the objective of attempting to improve the quality and consumer appeal of its current lacklustre smartphone portfolio.
This acceptance that Nokia has manifestly failed to challenge the iPhone or Blackberry products might breathe fresh life into the company's smartphone ambitions. However, analysts are questioning how long Nokia can continue using the Symbian OS for the majority of its smartphones given its complexities and slow pace of development.
Harlow will also have the problem of capacity constraints that Kallasvuo said was behind the poor Q3 smartphone sales figures. "The constraints did in fact hit the smartphone part of the business more than the rest of the devices," said the CEO.
While the Smartphone division will be tasked with driving shipment numbers and keeping the margins high, the second unit, called Mobile Phones, will be run by Rick Simonson, currently Nokia's CFO, with a focus on low to mid-priced handsets. This will mean leading the portfolio, product and lifecycle management of all Series 30 and Series 40 devices, which account for more than half of Devices & Services net sales, representing a significant part of Nokia's business. Simonson will have overall responsibility for the sourcing of components for both the Smartphone and Mobile Phone divisions of Nokia.
This reshuffle is being seen by industry watchers as the company preparing Simonson for promotion to CEO at a later stage, noting that previous Nokia CEOs have come from a background as both CFO and head of mobile phones. What remains unsaid is how long Kallasvuo can remain as CEO of Nokia given his track record - albeit in economically difficult times.
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