Nokia appoints Rajeev Suri as CEO

Nokia has named the head of its networks division, Rajeev Suri, as its new CEO from May 1. He will take over from company chairman Risto Siilasmaa, who has been serving as acting CEO.

The Finnish company said Rajeev Suri will take the helm of the 143-year-old company, charging him with accelerating another transformation of a business with a history of reinvention. Mr. Suri said in an interview that Nokia's cash pile—fattened by the €5.4 billion ($7.5 billion) handset sale to Microsoft Corp. Microsoft puts it a position to consider smaller-size acquisitions to fill gaps in a product portfolio that now focuses on wireless networks.

According to the Reuters India, Nokia said it would focus on growing the networks unit, as well as its navigation and patents business, but did not give any specific details.

"The general strategy is not very concrete, sounds like they have just come up with a mega-trend around their three business areas. I'd expect the units to be rather independent in the future," said Mikael Rautanen, analyst with equity researchers Inderes.

The networks business last year accounted for about 90 percent of the group's sales and Nokia has vowed to make a more aggressive push this year to increase its global market share.

Nokia also released first-quarter earnings Tuesday, five days after closing the Microsoft deal. The numbers underscored why the company shed a mobile device business that once dominated the industry.

Handset sales plummeted sharply in the first quarter, dragging Nokia's overall financial performance to a net loss of €239 million. While modestly smaller than the net loss in the same period a year earlier, it contrasted the performance turned in by the rest of the company that doesn't make handsets.

Nokia, without the handset business, swung to a €108 million net profit in the first quarter, compared with a €98 million loss for the non-device operations in the same period last year. Cost cuts and an unusually large share of high-margin software in Japan helped drive the improvement.

A majority of Nokia's future revenue will come from the networking unit, previously headed by Suri, making him a logical appointment as CEO. Suri has served as the CEO of Nokia Solutions and Networks (formerly the joint venture Nokia Siemens Networks) since October 2009. Now that it has full control of the division, Nokia plans to refer to NSN simply as its Networks business unit.

The success of the unit will be key to the company's future. As network operators adopt cloud-based infrastructures and technologies such as network functions virtualization, their networks will become more nimble and less reliant on proprietary hardware. Nokia plans to take advantage of these changes, saying it has conducted trials and pre-commercial live projects with more than 50 customers last year.

But the company also aims to get the most out of its patent portfolio, and will invest in location services. The sale of the devices business to Microsoft leaves Nokia with a significant cash pile, equivalent to a!7.1 billion in net cash if the sale had closed during the first quarter, it said.