Nokia reported a sharp drop in second-quarter profits on Thursday and forecast a weak third quarter, increasing the pressure on embattled chief executive Olli-Pekka Kallasvuo. The firm, which makes every third mobile phone sold in the world, was rocked by two profit warnings and a management shake-up in the second quarter alone as it struggles to keep pace with smartphone rivals Apple and Google.
The Finnish company has lacked a hit smartphone model since its 2006 launch of the N95, and has lost out in the top end of the market to Apple's iPhone. Now Nokia is looking for a replacement for Kallasvuo, who has spent more than half of his life at the company, industry sources told Reuters earlier this week. Kallasvuo may be ousted as soon as this month, the Wall Street Journal reported. Kallasvuo, a 57-year old former company lawyer and chief financial officer who married a Nokia lawyer, told CNBC television that talk of his going was hurting the company and had to stop.
He declined to comment after the result on whether Kallasvuo still enjoys board support. "I might have it, I might have it not. Its a 'no comment'," Kallasvuo told Finnish broadcaster YLE. Chairman Jorma Ollila, who has worked closely together with Kallasvuo since the 1980s, was not available to comment. At the annual shareholder meeting in May Ollila strongly backed management's strategy, but did not expressly support the chief executive.