Oct. 26 (Bloomberg) -- Nokia Oyj’s Timo Ihamuotila helped convince AT&T Inc. to offer one of the Finnish company’s most expensive handsets this year, letting the device share shelf- space with the iPhone at Apple Inc.’s exclusive U.S. carrier.

Now, he has to use those skills to persuade investors Nokia stock is still a “buy,” after the world’s biggest mobile-phone maker lost 6 points of smart-phone market share in three months and posted its first quarterly net loss, while rival Apple had its most profitable quarter. The 43-year-old sales executive takes over as chief financial officer on Nov 1.

“Nokia has struggled,” said Andy Perkins, an analyst at Societe Generale in London, who recommends selling Nokia shares. “Apple is an extremely serious threat just because of the excellence of the iPhone, which has really captured people’s imagination.”

Nokia’s market share in smart phones with advanced features such as Internet browsers fell in the three months to 35 percent from 41 percent, as it posted a 559 million-euro ($834 million) loss, the company said Oct. 15. Nokia has lost 20 percent this year in Helsinki trading, while Apple has gained 140 percent. The iPhone, carried by AT&T since its debut in the U.S. in 2007, has been the symbol of cool among consumer handsets.

In his new role, Ihamuotila has to figure out how to better use Nokia’s resources to fight Apple and Research In Motion Ltd.’s BlackBerry at the top of the market and Chinese phone makers that sell products for as little as $20. His tenure in sales shows he will probably take an active role in showing investors Nokia is a serious contender to take on Apple and RIM in smart phones, the industry’s fastest-growing market.

‘Good Fit’

“This is a guy who’s been out there with some of Nokia’s biggest customers and understands their requirements and their disappointments within the last year or so,” said Ben Wood, a London-based industry analyst with CCS Insight, who’s met Ihamuotila at company events. “He’s a good fit.”

Ihamuotila, a former Citibank derivatives salesman whose family members have run three Finnish companies and include a former agriculture minister, wasn’t available to comment since he hasn’t started in the new job yet, spokeswoman Arja Suominen said. Suominen declined to comment further, saying it was against company policy to discuss individuals.

Since becoming sales chief in April 2007, Ihamuotila has focused on making Espoo-based Nokia more open to changes from carriers, which resell handsets and have complained that the company was unwilling to let them customize the high-end phones with their own logos and software.

AT&T Deal

Nokia this year introduced the 7705 Twist, a square phone marketed by Verizon Communications Inc. Ihamuotila helped reach a deal in April with AT&T to offer Nokia’s first smart phone with a Qwerty keyboard in the U.S. This month, Nokia signed an agreement with AT&T, Microsoft Corp. and retailer Best Buy Co. to sell the new Booklet 3G mini-laptop in the U.S.

“Only now is Nokia seriously willing to listen to AT&T,” said Tero Kuittinen, an analyst at Greenwich, Connecticut-based MKM Partners LLC. “AT&T demands a high level of customization and co-branding, more than European carriers Nokia is used to working with.”

Even in Europe, carriers are pressing Nokia. Last year, Ihamuotila brokered an accord with Norway’s Telenor ASA, allowing it to offer its own services on Nokia phones it sold.

“The relationship has deepened in the sense that we are not only talking about handsets but we are also talking about the relationship on the services side,” said Nils Katla, Telenor’s Nordic region vice president.

Risk Management

Spokesmen for Verizon, Vodafone Plc, Deutsche Telekom AG and TeliaSonera AB declined to comment for this story. Mike Woodward, a vice president at AT&T’s wireless division, said he couldn’t comment on Nokia’s executives.

Ihamuotila started in Nokia’s risk management department in 1993 and left the company three years later. He rejoined in 1999, serving as treasurer, head of finance and strategic development in the U.S. and sales chief. During his U.S. stint, he lived for three years in San Diego.

Nokia had a strategy of developing phones for the U.S. market that worked well in the late ‘90s, Ihamuotila said in a video interview with bloggers at a company event last month. Early this decade the company shifted to developing products for Europe and then trying to sell them in the U.S.

“We just simply have not been responsive enough in the U.S.,” he said. “When we come up with new U.S.-specific products, the market has already moved. The market has moved the fastest in the U.S.”

Apple Rises

Apple had a 25 percent increase in revenue last quarter, compared with a 20 percent drop at Nokia. Apple sold 7.4 million iPhones in the quarter, while Nokia delivered 5.7 million touch- screen devices. The iPhone is sold in about 80 countries and goes on sale this month in China, Nokia’s biggest market by revenue. Nokia, with handsets available in more than 150 countries, sold 16.4 million smart phones last quarter including devices without touch-screens.

Nokia last week sued Apple in a U.S. court, claiming infringement of 10 patents and seeking back royalties on the 33.7 million iPhones sold since the device’s introduction in 2007. Apple declined to comment to pending litigation.

Ihamuotila comes from a family well-connected in Finnish business and political circles. His father Jaakko was the CEO of refinery Neste Oil Oyj. His cousin Mika Ihamuotila is the current CEO of retailer Marimekko Oyj and was previously the head of Sampo Bank Oyj. Other relatives headed the University of Helsinki and served as agriculture minister.

Family Connections

“I haven’t seen any description of him that didn’t refer to his family, though he’d be the last person to raise it up,” said Vesa Puttonen, a professor who taught Ihamuotila during business school at the Helsinki School of Economics.

Ihamuotila began his career as an asset and liability analyst at Finland’s KOP Bank, now part of Nordea AB, and spent three years in derivative sales at Citigroup in the late 1990s. While at KOP, he started postgraduate studies.

In 1997 he completed a 95-page, equation-studded thesis on interest rate hedging in a multicurrency environment that was reprinted as a research report. Nokia made use of the work in its treasury department, which he later returned to run, according to the final chapter of his thesis.

Ihamuotila now makes the move to CFO and will have to prove his abilities to analysts and shareholders. He gets his first chance at the annual investor meeting on Dec. 2.

“He’s going to have to elaborate on the company’s plans and discuss Nokia’s road map, so investors can decide whether to put money in it,” Michael Walkley, a Piper Jaffray analyst in Minneapolis who has taken investors to meet Ihamuotila. “Apple clearly has momentum behind it, but Nokia’s got a strong global brand.”

To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

Last Updated: October 25, 2009 20:01 EDT