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Does Nokia Need a New CEO?

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Stephen Elop's days at Nokia (NYSE: NOK  ) may be numbered.

Shares of the once iconic handset maker hit another multi-year low today. Elop -- brought in two years ago to save the company as its first CEO who wasn't born in Finland -- hasn't helped.

Investors probably figured that things couldn't get any worse for Nokia when Elop came in 21 months ago. The stock was at $8.60, and bringing on the former Microsoft (Nasdaq: MSFT  ) exec to shake things up seemed like one way to get the stock back into the double digits.

Well, we all know how that played out. Elop may have been correct in jumping off the "burning platform" that Symbian had become but, instead of joining rival handset makers to rally behind Google's (Nasdaq: GOOG  ) Android, he went back to his former company to strike a deal to champion Microsoft's mobile operating system.

Elop argued at the time that Nokia would be paid "billions" to back Windows Phone, but these sums haven't shown up in the company's dwindling quarterly financials.

If anything, going with the obscure Windows Phone in a world dominated by Android and Apple's (Nasdaq: AAPL  ) iOS has been disastrous. It certainly didn't help when Microsoft recently revealed that the upcoming Windows 8 update won't be compatible with earlier phones. If Nokia was having problems pushing its Lumia handsets before, now it faces enlightened consumers who will wait for the new devices.

Research In Motion (Nasdaq: RIMM  ) may be the only major smartphone company in a sorrier state, but it recently replaced its co-CEOs. You're next, Nokia.

What can Elop do? The stock has shed more than three-fourths of its value since he took over. He took Nokia from a burning platform to one that has grown ice cold.

"I think that Elop will have to go, but I also think that the board also needs to be renewed with people who have an understanding and working knowledge of the mobile industry," Silicon Valley vet Jean-Louis Gassée says in an exclusive interview with Computing.

He's right. He's only saying what everyone else has been thinking.

Knocking Nokia
There's no denying that the next trillion dollar revolution will be in mobile. And that's not just lip service, it's the name of a free special report that you can check out now. However, no one seems to be inviting Nokia to the revolution.

The Motley Fool owns shares of Microsoft. The Fool owns shares of Apple. The Fool owns shares of Google. Motley Fool newsletter services have recommended buying shares of Apple, Google, and Microsoft. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

Read/Post Comments (6) | Recommend This Article (1)

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  • Report this Comment On July 06, 2012, at 2:15 AM, Pimust wrote:

    Judging by how our local boys have done as CEOs before Elop the nationality of CEO is not an issue here. The current CEO is doing what the previous couple of CEOs should have done years ago and that's to accept the fact that Nokia is not a software company capable of creating an eco system that could compete with the other eco systems on the market all on it's own without any help from some true software giant that can provide the backend services and software development tools to create this eco system. Nokia postponed this vital decision far too long and now it's paying back for this neclection.

    It's way too early to judge the success of Elop''s decisions as the Windows Phone platform has not yet been able to benefit of the involvement of Nokia to the development of WP platform. WP8 is the first version of Windows Phone in which Nokia has played a important part in development and that shows already in number and quality of the new features of WP8. There's going to be big things happening on smartphone market in the next 6 months and I thinks it's too early to say for sure how it's going to turn out.

  • Report this Comment On July 06, 2012, at 5:40 AM, srikondoji wrote:

    Elop figured correctly that they need to abandon Symbian, but where he miserable went wrong was to go with one OS vendor called Microsoft. Being Nokia's CEO, his main job should have been selling more smartphones just like Samsung. Nokia should have released both android and windows phones. Instead Elop, went on to do Steve balmer's job of creating unique identity. Creating unique experience and identity was Microsoft's problem not Nokia's.

    When Nokia agreed to release Lumia devices with Windows 7, they should have known that these devices were not going to be compatible with Windows 8. If they knew this before and also release cycle of Windows 8, why did they took this self defeating step of going with Windows at the time? They could have wither waited for Windows 8 or gone with higher end Lumia devices that were compatible with both 7/8.

    Elop is no doubt a disaster and he should be fired.

  • Report this Comment On July 06, 2012, at 5:46 AM, wilsantiago wrote:

    I agree with Pimust, Elop is doing what needs to be turn a company around takes longer than a year. 2013 will be the year that Nokia will start coming back from the dead.

    @srikondoji Nokia is not allowed to produce Android phones right now since this is part of Microsoft's agreement with Nokia.

  • Report this Comment On July 06, 2012, at 7:24 AM, butthead2u wrote:

    Pimust, well said! Sri., Elop made it prety clear why he went with Microsoft, Nokia, not Microsoft, needed to diffentiate their product from all the other phones out there, their deal with Microsoft allows them to alter the software more than any other company. Regarding waiting for Windows 8, that would be a waste, putting out Windows 7.5 has allowed them to have market exposure and keep their name out there. Anyone who thought Nokia's Windows Phone 7.5 was going to be a blockbuster is crazy! The real partnership is going to start with Windows 8. Keep in mind folks, we're just at the beginning of this, just like back in the day, Windows 8 will be what Windows 95 was, a blockbuster and turning point!

  • Report this Comment On July 06, 2012, at 9:22 AM, Pimust wrote:

    There's no way that Nokia would have had the time nor the resources to wait for the launch of WP8 to bring out the first WP handsets and everybody should have known this.

    Without the obvious connection with the Windows 8 platform MS should have named the next WP version WP10 because of the radical technical changes made. That would have given consumers some idea of nature of the differences between new and older WP phones and suppressed the whining about not being able to upgrade the old WP7.5 phones to newer OS. On the other hand the change from Windows 7 to Windows 8 is also a big leap that maybe MS should have gone to Windows10 all together. With iOS this number of new features would definitely equal skipping a few version numbers.

  • Report this Comment On July 06, 2012, at 6:06 PM, melegross wrote:

    Guys, it wasn't Elop who went with Microsoft. Do you think he was hired because of his good looks and experience running a big phone manufacturer? No, he was hired because the board of Nokia had already decided to go with Win Phone. After having decided that, they went with a Microsoft software guy.

    It was a mistake. This guy is no CEO. Running a software division isn't a qualification for the job of CEO. I wouldn't be surprised if this was negotiated with Microsoft before his hiring.

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