Nokia Begins CEO Search

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Nokia (NOK) CEO Olli-Pekka Kallasvuo will be out of a job soon, at least according to The Wall Street Journal. Analysts have been calling on the handset company's board to replace him for some time. He has held his job since 2006.

Among the reasons cited for his trouble are the company's lack of a product to compete with Apple's (AAPL) iPhone, Research In Motion's (RIMM) BlackBerry, and Android-powered smartphones.

Nokia is the largest manufacturer of handsets in the world, with about 37% of the market worldwide. But its very modest smartphone market share has begun to hurt both margins and revenue. The company said in June that its forecast for second-quarter revenue for the mobile devices and services division would be below its previous range of $8.2 billion to $8.8 billion. Nokia blamed the change on lower-than-expected average unit prices.

The smartphone market is the high-margin part of the mobile phone industry. As a result of Nokia's failure to penetrate the most lucrative and fastest-growing portion of the sector, its shares are down 32% this year to a 12-year low. S&P recently cut its credit rating for the company, saying the decision reflects its expectation "that a material improvement in profitability over the near term could be hampered by intense competition for smartphones and traditional mobile phones, and also by Nokia's rather weak competitive position for high-end smart phones."
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