Nokia's MeeGo Chief Quits in Second Exit Since Elop Appointment

Nokia Oyj said the head of its project to develop a new mobile operating system with Intel Corp. quit, in the second high-level exit since Stephen Elop was named chief executive officer last month.

Ari Jaaksi, the head of the division working on the Linux- based MeeGo operating system, will leave the company at the end of October, spokeswoman Eija-Riitta Huovinen said. Last month, Anssi Vanjoki, Nokia’s smartphone division head, quit, saying he’ll leave after the expiry of a six-month notice period.

The changes come as the world’s largest mobile-phone company struggles to claw back ground lost in mobile devices to Apple Inc.’s IPhones and handsets based on Google Inc.’s Android software. Nokia last month named Elop, the former head of Microsoft Corp.’s business division, as the company’s first non-Finnish CEO, taking over from Olli-Pekka Kallasvuo.

“This is Elop sweeping a broom through the divisions,” said Lee Simpson, an analyst at Jefferies Intl Ltd. in London. “He is a guy trying to put some new heads into the company and realizes that the situation behooves a strategic change.” Nokia shares rose 2.5 percent to 7.51 euros in Helsinki.

The company’s share of the world smartphone market declined to 37.4 percent in the second quarter compared with 45 percent in the same period last year, according to Gartner Inc.

Last week, Nokia made the first shipments of its N8 smartphone, a touchscreen device designed to compete with Apple’s iPhone and phones running Google’s Android software.

Replacement

Android, which is offered free to device manufacturers, is now the most popular operating system for new smartphones in the U.S., with the iPhone and Research In Motion Ltd.’s BlackBerry platforms tied for second place, Nielsen Co. said today.

The Meego software being developed by Nokia and Intel is yet another attempt by the Finnish company to recover ground in smartphones. Nokia has said it plans to start shipping devices based on MeeGo this year. Jaaksi’s exit raises questions about whether Nokia can deliver on that promise.

Peter Skillman, one of the designers of Palm Inc.’s WebOS operating system, joined Nokia in September and could be a candidate to fill Jaaksi’s position, Jefferies’ Simpson said.

Nokia’s Huovinen said the process of finding a replacement has started.

Nokia, based in Espoo, Finland, lowered its earnings forecast three times before managing to fulfil a pledge for a third-quarter start for the N8, which runs the Symbian 3 operating system.

To contact the reporters on this story: Matthew Campbell in Paris at mcampbell39@bloomberg.net;

To contact the editor responsible for this story: Vidya Root in Paris at vroot@bloomberg.net;

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