Nokias Ollila to leave in 2006; Kallasvuo to succeed

London, Aug. 1 | Updated: Aug 2 2005, 05:33am hrs
Nokia Oyj Chief Executive Jorma Ollila, who turned the former maker of toilet paper and rubber boots into the worlds largest mobile-phone company, will step down next year and be replaced by handset chief Olli-Pekka Kallasvuo.

Ollila, 54, will step down on June 1, 2006, and plans to remain as non-executive chairman, Espoo, Finland-based Nokia said in a statement on Hugin today. Kallasvuo, 52, joined Nokia in 1980 and now heads the division that makes entry-level mobile phones.

Under Ollila, Nokias shares surged to make it the most valuable company by market value in Europe in 2000, helped by a 10- fold increase in revenue. Kallasvuo will have to fight increased competition from Asian and U.S. rivals to defend Nokias market share and profit margins.

A figurehead for Nokia and for the entire technology industry is stepping down, said Andreas Mark, a Frankfurt-based fund manager at Union Investment, which oversees $150 billion, including Nokia shares. Ollila personifies a very successful time for Nokia.

Nokia said President Pekka Ala-Pietilae will resign to pursue personal interests. He will take on the role of executive advisor on Oct. 1 and leave Nokia on Feb. 1, 2006.Ollila, who was named CEO in 1992, had earlier indicated he may step down when his tenure ends in 2006.

Shares of Nokia fell as much as 15 cents, or 1.1 percent to 13.02 euros, and traded at 13:06 euros at 3:55 p.m. in Helsinki.

Kallasvuo has been groomed to lead Nokia, which has picked CEOs from its own ranks since before World War II. Kallasvuo was chief financial officer at the company before Ollila moved him to lead the mobile-phone division. His career path mirrors that of Ollila, who oversaw Nokias finances and then its handset business before becoming CEO.

Bloomberg