After offloading its once-profitable mobile phone business to Microsoft, Nokia is set to announce Rajeev Suri as its next CEO at its next conference call on Tuesday next week. Shareholders are also anticipating how much they will receive in cash after the humongous deal.
Indian-born Rajeev Suri is widely considered the best candidate to succeed Stephen Elop as Nokia's next chief executive after Elop stepped down to return to Microsoft, where he was once CEO before leaving for Nokia. Suri currently holds the chief post at Nokia Solutions Networks (NSN), which he turned profitable due to drastic restructuring methods and the acquisition of Motorola's mobile network arm in 2010.
Suri, who graduated with a degree in electronics and communications engineering from the Mangalore University in India, is one of the few top-management executives without a business or management degree. He joined Nokia in 1995 as a system marketing manager and moved up the ranks to various executive positions since then. In 2009, Suri became CEO of NSN, then Nokia Siemens Networks.
Nokia, which was once the market leader in the mobile phone industry, completed the sale of its mobile phone division to Microsoft for a final price that is slightly higher than the $7.52 billion announced in September.
"The estimate of the adjustments made for net working capital and cash earnings was slightly positive for Nokia, and we currently expect the total transaction price to be higher than the earlier-announced transaction of EUR 5.44 billion after the final adjustments are made based on the verified closing balance sheet," says Nokia in a press release.
However, the company will still continue to manufacture mobile phones as a contractor for Microsoft in a Chennai-based factory that employs 8,000 workers. The factory was frozen by tax authorities in India due to allegations that Nokia wrongfully claimed tax exemptions. The conflict could not be resolved in time for the Microsoft-Nokia deal.
Investors have been anticipating Nokia's plans now that it is left with a mobile network arm that will have to compete with market leaders such as Huawei Technologies, Alcatel-Lucent and Ericsson.
In February, Suri announced that Nokia is considering partnership with Juniper Networks in an effort to expand its mobile network business. The company also considered acquiring Alcatel-Lucent, although the merger did not push through.
Microsoft, meanwhile, is looking to gain a strong footing in the mobile market but analysts expect it to be a hard ride for the Windows Phone maker, which is up against giants like Apple, Google and Samsung.
With Nokia's mobile phone division under its wing, Microsoft is now only behind Samsung as the world's second largest maker of mobile phones. However, it is still left with an insignificant share of the market when it comes to smartphones, the most profitable part of the industry.
"The deal alone doesn't immediately solve the problem for either company. Now, they have to roll up their sleeves and start working to play catch-up," said analyst Sami Sarkamies of the Nordea Bank AB in Finland in an interview with Business Standard.
