Nokia Trying to Copy Jobs Hired Second Choice Elop, Ollila Says

Stephen Elop, who quit as Nokia (NOK1V) Oyj chief last month after failing to revive sales during his three-year tenure, was the mobile-phone maker’s second choice for a new leader when hired in 2010, according to a former chairman.

The Finnish company was looking to replicate Apple Inc. (AAPL)’s success with consumers when it sought a new chief executive officer, Jorma Ollila, Nokia’s chairman at the time, wrote in his memoir published today. His preferred candidate, not named in the book and identified as deputy chief at a U.S. technology company, turned the job down for personal reasons, prompting Nokia to set its sights on Elop, Ollila said.

“I asked myself several questions,” said Ollila, who ran Nokia as CEO from 1992 to 2006. “Elop seemed to be full of words and ideas, but was he able to delegate enough? Was he enough of a product person, because we needed someone to reach similar feats as Steve Jobs.”

Nokia, based in Espoo, Finland, was struggling to regain relevance in smartphones after Apple co-founder and then-CEO Jobs introduced the iPhone in 2007. Google Inc. (GOOG)’s Android operating system followed and Nokia’s smartphone shipments fell by almost two-thirds since a 2010 peak of 104 million units, according to data compiled by Bloomberg Industries. Replacing Olli-Pekka Kallasvuo as chief, the company chose Elop, who introduced Microsoft Corp. (MSFT)’s Windows Phone operating system for its smartphones in 2011.

Last month, two years after Elop struck the deal with Microsoft, Nokia agreed to sell its entire mobile-phone division to the Redmond, Washington-based software company amid plunging sales. Elop is moving to Microsoft as part of the deal and is also a candidate to become its CEO.

‘False Impressions’

Nokia failed to identify the threat posed by Apple, said Ollila, currently the chairman of Royal Dutch Shell Plc. (RDSA)

“We lived amid many assumptions and false impressions,” said Ollila, 63. “Important telecommunications operators had taught us over a long time period in the U.S. that there is no demand for smartphones that are too expensive, for example more than $300.”

“At the same time, Apple introduced the iPhone with a price tag of more than $600,” he said. “Apple had created something entirely new: an exceptional user experience and a setting in which the phone was key to an ecosystem of services and applications.”

“Mahdoton menestys -- Kasvun paikkana Nokia” is published by Otava (480 pages, 39.70 euros, $54.30.)

To contact the reporter on this story: Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net

To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net

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