Nokia CEO Ollila to Step Down Next Year

Cell phone chief Kallasvuo will succeed him June 1.
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Cell phone mastermind Olli-Pekka Kallasvuo was tapped Monday to succeed

Nokia

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CEO Jorma Ollila when Ollila relinquishes the title in about a year.

The Finnish company set the succession plan about two weeks after tamping down its third-quarter earnings estimate, citing a preponderance of low-margin sales in developing countries. Second-quarter earnings rose a solid 15% from the year-earlier quarter, although gross margins narrowed to 35.7% from 38% in the first quarter.

While Nokia remains the world's biggest cell phone company, it has recently been losing buzz and pricing power to

Motorola

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, whose slimmed-down Razr handsets have proven to be a major hit with consumers.

Kallasvuo, who joined the company in 1980 and was once chief financial officer, is currently head of Nokia's mobile phone unit. He will become president and chief operating officer of Nokia in October and take over from Ollila on June 1, 2006.

The current president, Pekka Ala-Pietila, will leave the company in February, citing personal reasons.

Nokia shares fell a penny to $15.94 on Instinet.