Nokia CTO on leave amid report of strategy disarray

HELSINKI/LONDON Thu Jun 9, 2011 5:32pm IST

The corporate logo hangs on a wall at Nokia world headquarters in Helsinki July 9, 2008. Picture taken July 9, 2008. REUTERS/Bob Strong/Files

The corporate logo hangs on a wall at Nokia world headquarters in Helsinki July 9, 2008. Picture taken July 9, 2008.

Credit: Reuters/Bob Strong/Files

Related Topics

HELSINKI/LONDON (Reuters) - Nokia said its technology chief was on indefinite leave after a media report of strategy disagreements, and a second credit agency cut its rating in another blow for the stricken phone maker.

Shares in Nokia hovered near 13-year lows after Finnish newspaper Helsingin Sanomat said CTO Richard Green had disagreed with Chief Executive Stephen Elop over Nokia's Microsoft-focused smartphone strategy and might not return.

Nokia confirmed that Green was on leave and said it was for personal reasons, but declined to comment further on Thursday. Henry Tirri, head of Nokia Research Center, will be acting CTO.

Speaking at a conference in London, Elop did not mention the matter but was pushed to deny that the company was for sale amid increasingly loud talk that its plunging market value has made it a target.

"All rumours are baseless," he said when asked in an on-stage interview whether Nokia was for sale.

Bankers say Nokia is far from attracting real suitors due to scepticism about its recovery. Its market value has halved to 17 billion euros ($25 billion) since February.

S&P cut its debt rating for Nokia to 'BBB+/A-2' and placed the company on CreditWatch with negative implications, the second credit agency to downgrade the phone maker since last week's profit warning.

Fitch ratings agency on Tuesday cut its rating on Nokia's bonds to 'BBB-' -- one notch above junk grade. It also set a negative outlook, saying consumers appeared to be deserting its legacy handsets.

Nordea analyst Sami Sarkamies said: "We will probably see more of these negative news for Nokia in the coming weeks. All the effects caused by the profit warning have not yet come through.

At 1130 GMT, Nokia shares were down 0.1 percent at 4.288 euros, broadly in line with the wider market.

Nokia, once the undisputed global leader in mobile phones, has lost the initiative in the smartphone market to Apple's iPhone and a variety of devices based on Google's Android phone software.

At the low end of the phone market, it is rapidly losing share to cheaper Asian rivals, and warned last week it would miss sales and profit targets, blaming tough competition in China and Europe.

But Elop stuck to his line that the company needed not a fundamental rehaul but more focus and better execution.

"How do you hold people accountable? How do you empower people throughout the organisation to move, move, move?" he asked in his speech to the Open Mobile Summit in London.

He appeared relaxed on stage but later disappeared through a back door, avoiding reporters.

Nokia has thrown in its lot with Microsoft, with whom it will co-develop its next generation of smartphones. It hopes to gain the kind of attention that Apple and Google have attracted from software developers who enrich their devices.

The partnership is not exclusive, and Nokia rivals including HTC and ZTE will continue to bring out devices based on Microsoft's Windows Phone software.

Elop said he was less worried about indirectly helping such rivals than he was about catching up with Apple and Google.

"It is more important for us today to compete with Android and Apple than to compete with a Samsung Windows phone," he said.

(Additional reporting by Kate Holton in London and Jussi Rosendahl in Helsinki; Editing by Sophie Walker)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Economic Pulse

REUTERS SHOWCASE

Deregulation Impact

Deregulation Impact

Private fuel retailers to dip toe, not dive back, into India  Full Article 

Gold Import

Gold Import

RBI will not change gold import rules - sources  Full Article 

Idea Results

Idea Results

Idea Cellular Q2 profit up 69 percent  Full Article 

An RBI First

An RBI First

RBI releases minutes of financial stability council's Aug meet  Full Article 

Global Shares

Global Shares

Japanese stocks lead shares worldwide, IBM weighs on Dow  Full Article 

IBM Chip Unit

IBM Chip Unit

IBM to pay Globalfoundries to take chip unit  Full Article 

IBM Earnings

IBM Earnings

IBM ditches 2015 operating EPS target, shares slump 7 pct  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage