Nokia set to replace chair, outlook brightens
Helsinki/Taipei - Struggling phone maker Nokia Oyj basked in brightening prospects for its much-hyped Windows phone on Thursday as it prepared to strengthen the hand of new boss Stephen Elop by replacing its old-guard chairman.
Shares in the Finnish company, which has been losing ground to rivals in the fast moving market for “smart” mobile phones, topped the gainers board in the FTSEurofirst 300 index, standing 4.8% at 4.076 euros by 1415 GMT.
Encouraging December figures from a Taiwan-based supplier of the phones provided fresh impetus for the stock, along with broker upgrades citing an improving outlook for the software tie-up with Microsoft on which it gambled its future last year.
Compal Communications, a provider of Nokia handsets, said December sales grew 275% from a year earlier to NT$4.51 billion ($149 million) from 1.2 billion, according to a Tawian Stock Exchange website posting.
In another report, the Commercial Times cited the company’s chairman saying the business could turn profitable this year as sales could more than double, although the company later said it had made no forecasts about 2012.
Trade web site Digitimes, citing Taiwan-based supply chain makers, said Compal and fellow supplier Foxconn were expected to ship over 10 million smartphones in 2012.
Credit Suisse upgraded the stock to “outperform” from “underperform” on hopes of smartphone recovery.
“We fundamentally believe that Nokia’s focus on Windows will allow the company to drive a recovery through 2012 in both its top-line and earnings,” analyst Kulbinder Garcha said in a note.
Pohjola Bank analyst Hannu Rauhala added; “The market has been worrying over Nokia Windows Phone deliveries in the fourth quarter. Compal’s strong comments relieve some of these worries.”
Who is new chairman?
The stock price rise came as a Finnish newspaper Helsingin Sanomat reported the board would propose Risto Siilasmaa as its next chairman to replace long-time leader, Jorma Ollila, who is due to step down in May.
Siilasmaa, a 45-year old enterpreneur, has been a Nokia board member since 2008 and is known in Finland as the founder of software security company F-Secure. He also chairs the board of Finnish telecom operator Elisa, but is little known outside the country.
The appointment of Siilasmaa, who is relatively unknown outside Finnish borders, could indicates that Nokia has struggled to find a big hitter for the role, analysts said, although they said it also underlines Elop’s determination to turn the company around.
Ollila, 61, led Nokia’s transformation from a rubber boots and TVs conglomerate into a giant mobile phone company in the 1990s, but in recent years the company has lost out to newcomers Apple and Google in the smartphone market.
Elop, the first non-Finn to run the company, has overseen a halving of Nokia’s share price since the group dumped its own smartphone software platforms 11 months ago in favour of Microsoft Corp’s Windows Phone