Oct. 16 (Bloomberg) -- Nokia Oyj, the world’s largest maker of mobile phones, said it is removing Chief Financial Officer Rick Simonson a day after the company posted the first loss since it began reporting quarterly in 1996.

Timo Ihamuotila, who joined Nokia in 1993 and currently heads global sales, will replace him. Simonson will head the low-end mobile-phone unit in the devices division.

Ihamuotila will take charge of the company’s finances as Nokia battles falling sales at both ends of its product range, and struggles to revive the fortunes of its venture with Siemens AG. Nokia revised its forecasts frequently during Simonson’s tenure as CFO, including a surprise warning on market share last September that sent the stock plummeting. Moody’s Investors Service today cut its rating on Nokia’s senior debt, following yesterday’s loss.

“The results and the reaction to the results indicate that they need to continue to make changes, and they will make those changes,” Jason Willey, a London-based equity analyst with Standard & Poor’s, said in an interview. He rates Nokia shares “hold.”

Simonson will report to Kai Oistamo, the head of the devices division, while remaining on the executive board. Nokia created two new units within the devices division on Oct. 1, Mobile Phones and Smartphones, the Espoo, Finland-based company said in a statement today. Simonson, who has been CFO since 2004, will also head “strategic sourcing” for the entire devices division.

Lowered Forecasts

Nokia cut its market-share forecast in September 2008, and downgraded its industry shipments outlook on Dec. 4 after economies slowed worldwide. It lowered its devices margin forecast at its earnings conferences on Jan. 22 and again on July 16.

Ihamuotila, a business school graduate from a Finnish family that includes the former chief executive officer of oil company Neste Oy and the current CEO of design house Marimekko Oyj, has had a low profile outside Nokia. He joined the company in 2003 and has worked in risk management, as the company treasurer, and at Nokia’s U.S. phone development unit in San Diego.

Chief Executive Officer Olli-Pekka Kallasvuo and his predecessor, Jorma Ollila, had both been Nokia’s CFO and had headed the entire mobile-phones division before taking the top job. Today’s announcement triggered speculation that Simonson or Ihamuotila could be a candidate for CEO.

‘Grand Plan’

“Time spent on an operational role would be a very important addition to being CFO,” said Stuart Jeffrey, a London-based analyst at Nomura who has a “neutral” rating on Nokia, commenting on Simonson’s move. “That doesn’t mean that there’s a grand plan that he will be the next CEO.”

Nokia’s global share of entry-level phones, used with prepaid accounts, which dominate in emerging markets, declined last year to “approximately 50 percent” from “over 50 percent,” according to its filings.

Nokia said it doesn’t expect to win any market share in the fourth quarter. The company sold 8 percent fewer mobile devices in the third quarter than a year earlier.

The third-quarter net loss was 559 million euros ($834 million) as Nokia wrote down the value of its Nokia Siemens Networks joint venture with Siemens. Its share of the smart- phone market declined to 35 percent from 41 percent in the previous quarter as consumers shunned the Nokia N97 touchscreen phone in favor of Apple Inc.’s iPhone.

Low-End Devices

The mobile-phone unit will include low-end and midrange devices accounting for more than half of Nokia’s handset sales. Simonson’s appointment is effective Nov. 1, Nokia said. Jo Harlow was appointed to oversee smart phones a few weeks ago, said Doug Dawson, a Nokia spokesman.

“The low end represents the majority of Nokia’s portfolio and is a big chunk of the market that is driving their share,” said Carolina Milanesi, an Egham, U.K.-based analyst with Gartner Inc. “The next thing for Nokia is trying to get more value out of that market as they fix the high end, which will remain a priority for them anyhow.”

To contact the reporters on this story: Marcel van de Hoef in Amsterdam at mvandehoef@bloomberg.net; Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

Last Updated: October 16, 2009 09:38 EDT