The announcement that Nokia is replacing CEO Olli-Pekka Kallasvuo with Microsoft's Stephen Elop does not change our long-term thesis on the company or our fair value estimate. While Mr. Elop's history doesn't indicate a close connection to any of the major North American wireless carriers, notable design expertise, or experience in building wireless software platforms, we did not expect the firm to find someone with that exact skill set, and have never believed that Nokia's problems could be fixed simply by replacing its CEO. What Nokia needs is someone who can drive organisational change (especially in a firm as set-in-its-ways as Nokia) and to build a cohesive team that can deliver on carrier relationships, handset design, platform-building, and developer relationships. We're not certain that Mr. Elop can make those changes, but we are at least relieved that Nokia's board understands that the firm cannot continue on its current path without continuing to lose market share.
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