October 16, 2009 / 2:28 PM / 10 years ago

Nokia installs new leaders at struggling phone unit

HELSINKI (Reuters) - Top mobile phone maker Nokia Oyj NOK1V.HE installed new leaders at its struggling cell phone business on Friday, bringing in a manager from rival Apple (AAPL.O), a day after posting its first quarterly net loss.

The cell phone industry is suffering as consumers reign in spending on new gadgets in the downturn and the more expensive end of the market is facing increasingly stiff competition.

Nokia said on Thursday it lost share at the high end of the market to rivals Apple and RIM RIM.TO and was hurt by a large writedown in its networks unit.

Nokia is splitting its phones business into three — Mobile Phones unit for cheaper models, Smartphones for phones running on Symbian operating system and Mobile Computers for new top-end devices, like the N900, running on Linux software.

A Nokia spokesman said Jo Harlow would move from global marketing to a new position of Smartphone business chief — a new phone entity in the Devices group.

Harlow, a former captain of Duke University women’s basketball team, joined Nokia’s marketing unit in 2003, after a long career at Reebok and Procter and Gamble.

“The Smartphone unit is where Nokia’s biggest challenge lies. It needs to step up in the face of fierce competition from Apple, HTC, RIM and others,” said Ben Wood, analyst at CCS Insight.

Nokia said Rick Simonson, the company’s chief financial officer since 2004, would head its new mobile phones unit, which would focus on cheaper models.

And John Martin from rival Apple will become head of Nokia’s Mobile Computers business in November.

The global head of sales Timo Ihamuotila, who joined Nokia in 1993, will take over as CFO.

SIMONSON TO HEAD UNIT OF CHEAP PHONES

“Mobile Phones remains the powerhouse of Nokia’s business. It requires a steady hand on the tiller combined with operational excellence to ensure it remains a lean, mean phone-making-machine,” said CCS Insight’s Wood.

Nokia said that in his new role, Simonson would manage the portfolio of Series 30 and 40 devices, and head strategic sourcing of Devices.

“Rick Simonson’s deep knowledge of the business and its financials will be valuable for the significant part Mobile Phones plays in Nokia’s business,” Nokia Chief Executive Olli-Pekka Kallasvuo said in a statement.

Nokia reported its weakest ever quarterly result on Thursday, with a net loss of 913 million euros ($1.36 billion) compared with a 1.06 billion profit the previous year.

“To split its mobile phone business seems like a good idea, with development in smartphones taking place at such a fast pace,” said OP Pohjola analyst Hannu Rauhala.

“In Mobile Phones it’s more about cost efficiency, sourcing and negotiating the best deals, so in that sense Simonson is a good a candidate as anyone.”

Kai Oistamo will continue to run the Devices business group.

Nokia stock was 1.2 percent lower at 9.07 euros by 1420 GMT.

(Reporting by Eva Lamppu and Tarmo Virki; editing by Karen Foster and Erica Billingham)

$1=.6702 Euro

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