The market value of Finland’s fallen star has dived from €109bn to €15bn in
less than five years. Jorma Ollila, who spearheaded the company’s
transformation from a conglomerate making TV sets into the world’s leading
mobile phone maker in the 1990s, is standing down as chairman in 2012.
Latest word – unconfirmed by the company – is that established board member
and local technology entrepreneur Risto Siilasmaa, who chairs Helsinki’s
Elisa telecoms group, could step into his shoes.
That would underpin Nokia’s Finnish roots after Stephen Elop, a Canadian, was
hired from Microsoft as the new chief executive in 2010. It might even douse
talk that Nokia will move its headquarters to the US.
Sustainable position
Managing domestic sensibilities will be the least of the new Nokia chairman’s
challenges, however. The key issue is whether the company can belatedly
carve out a sustainable position in the high-end smartphone market – and
start reversing declines in its core devices and services division, where
sales were down 25 per cent year on year in the latest (third) quarter.
Nokia’s first Windows smartphones from its partnership with Microsoft launched
in late 2011. Goldman Sachs predicted before Christmas that Nokia’s
smartphone share would fall below 9 per cent in 2012. This week, Credit
Suisse took a brighter view, suggesting that the share could stabilise at 13
per cent.
It is easy to get the impression that the end-game is being acted out at
Nokia. If its share price goes further south, runs the thinking, Microsoft
could emerge as an outright buyer. But the Finnish group’s shares now trade
at 17 times 2012 consensus earnings. And the US software company is
digesting its Skype deal. Nokia’s future, and its problems, are its to fix.
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