Nokia Replaces CEO Kallasvuo With Microsoft's Elop

Nokia has hired Stephen Elop a Microsoft Executive to replace its embattled Chief Executive and renew its drive to compete with Apple. Nokia said Olli-Pekka Kallasvuo, who presided over a halving in Nokia's market value to about $37 billion during his four years in charge, would hand over to Elop on September 21.

Under Kallasvuo, who will get a severance payment of 4.6 million euros ($5.8 million), Nokia has struggled to keep up with rivals such as Apple and Google in smartphones. "My job is to ensure that we are meeting the needs of our customers, while delivering superior financial results," said Elop. "It was too early to talk about what changes he would make but said North America was a critically important market and would be an area of emphasis."

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Before joining Microsoft, Elop had spent several years in Silicon Valley, rising to become Chief Executive, Macromedia. At Microsoft, Elop helped steer the company towards online versions of programs such as Word, Outlook and Excel.

"Elop's strong software background and proven record in change management will be valuable assets as we press harder to complete the transformation of the company," said Ollila. Nokia shares were up 4.1 percent at 8.06 euros at 1124 GMT, helping lift the European technology index 0.6 percent.