The Below Average CEO: Olli-Pekka Kallasvuo Of Nokia (NOK)

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Average: “an estimation of or approximation to an arithmetic mean”–Webster

Among the public companies in the handset business which trade on US exchanges, Nokia  (NOK) has performed the most poorly over the last year. The firm’s shares are up a little over 30% while the DJIA is higher by 50%. Apple (AAPL), RIM (RIMM), and Motorola (MOT) have performed much better over the period. Until a month ago, so had failed smartphone company Palm (PALM).

Nokia’s performance is particularly disappointing since it is the largest handset company in the world with a market share of 38%.

Nokia could have had an insurmountable lead in both the smartphone and mobile operating systems sectors. It let RIM take a commanding position at the top of the enterprise handset industry and let Apple move into the upper tier of consumer smartphones. More recently, Google (GOOG) has captured a breathtakingly large part of the wireless operating system business with its Android product which is still adding new handset customers.

Apple now controls the wireless software application download business and its iTunes store is likely to hold its position as the primary conduit of mobile broadband content distribution.

Nokia did not take advantage of any of the opportunities that it had by being in first place. It failed to leverage its partnerships with carriers, manufacturers, software developers, and content companies. And, at this point, it is not likely to catch its smaller competitors in the most profitable and strategically important parts of the industry.

Douglas A. McIntyre

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