Nokia has appointed Microsoft business manager Stephen Elop as its new chief
executive.
Mr Elop will replace the outgoing Olli-Pekka Kallasvuo, who was a lifelong
Nokia employee and has been chief executive since 2006.
The appointment may mark a sea-change in culture at the top of the Finnish
mobile phone giant.
In July, Nokia reported a 40% slump in second quarter profits, as it struggled
to break into the smartphone market.
Mr Kallasvua has been facing increasing pressure to quit this year after Nokia
issued two profits warnings and its share price fell by more than 40% between
March and June.
Markets took the news well, with Nokia up about 6% in early trading on Friday.
Experience
Mr Elop, who will take up his new position at Nokia on 21 September, is
currently the head of Microsoft's Business Division.
Prior to working at Microsoft, he has also held senior positions at Juniper
Networks, Adobe Systems and Macromedia.
"The Nokia board believes that Stephen has the right industry experience and
leadership skills to realise the full potential of Nokia," said Nokia chairman
Jorma Ollila.
"His strong software background and proven record in change management will be
valuable assets as we press harder to complete the transformation of the
company."
Mr Kallusvuo will stay on as a non-executive director on the Nokia board. He
will receive 18 months salary - worth 4.6m euros ( 3.8m; $5.8m) - in severance
pay.
"The whole Board of Directors joins me in thanking Olli-Pekka for his 30 years
at Nokia," said chairman of the board, Jorma Ollila.
Analysis
Rory Cellan-Jones
Rory Cellan-Jones Technology correspondent, BBC News
It's a mark of how serious the crisis facing Nokia has become that the company
has dumped its chief executive and gone outside Finland for the first time to
replace him.
The problem is not so much about sales or profits - Nokia is still by far the
world's biggest phone manufacturer - as its loss of what you might call thought
leadership.
The mobile world used to look to Nokia for innovation - now it looks to the
likes of Apple, or HTC or Samsung.
A Microsoft executive might seem a strange choice to lead the Finnish firm back
to the cutting edge - after all Windows phones have made no headway at all in
the smartphone battles.
But Steve Elop has had a varied career across the software and communications
industries, including spells at Adobe and Juniper Networks.
One former colleague describes him as "an incredible leader". He will need
those skills to convince the sceptics that Nokia phones - and the software that
runs on them - can be cool again.