New Nokia CEO aims to beat Coke on brand chart

HELSINKI, May 24 (Reuters) The incoming chief executive of the world's top mobile phone maker has a clear target -- to make Finland's Nokia the world's top brand -- and that doesn't mean just in mobile phones.

''The right ambition ... is to make Nokia the most loved and admired brand in the world, all industries included,'' Olli-Pekka Kallasvuo said at an investor meeting in the United States earlier this week. ''That is very much what I am pushing for.'' The task is different from that of predecessor Jorma Ollila, who took the post in 1992 and had to turn a troubled, sprawling conglomerate to profitability. Nokia's sales have since grown 11 times, and its shares have risen by 140 times.

Kallasvuo has a good starting point. Nokia was already the highest-valued European brand last year, according to consultancy Interbrand.

But it ranked sixth in the world behind U.S. giants Coca-Cola, Microsoft, IBM, GE and Intel.

Nokia's direct handset rivals are valued lower, with Korea's Samsung on spot 20 and Motorola at 73rd.

Nokia built its brand in the 1990s on easy-to-use, small phones with a long battery life, benefiting from its know-how in mobile technology.

In recent years its competitors have improved their designs. With the slim RAZR, Motorola recovered the leading edge it used to have with its small Startec phones. With Walkman phones, Sony Ericsson has abandoned an image that the Swedish company itself described as ''boring Ericsson'', while Samsung has grabbed consumer interest with its advanced flip phones and slim sliders.

''Nokia as a whole needs to become much more focused on marketing, in addition to products and technologies. By marketing I basically mean brand, design, marketing,'' said Kallasvuo.

BOSS' OWN PHONE SHOWS THE WAY Kallasvuo's own phone represents the change. He carries a black version of Nokia's top model, the 8800, which is made for consumers willing to pay 1,000 euros just for design. By contrast, Ollila has usually been seen with a functional smartphone.

Kallasvuo has worked for years as the right-hand of Ollila, who is seen as a corporate hero in its homeland. Market followers expect little change in the company's overall direction when Kallasvuo takes the lead on June 1.

''He (Kallasvuo) will be the man to lead the revival of the Nokia brand,'' said Ben Wood, a director at Collins Consulting said, adding he expected the change to take 12 to 18 months.

Kallasvuo stressed that closer focus on brand and marketing does not necessarily mean higher marketing costs and that the company was keeping a close eye on marketing spending.

Nokia's selling and marketing expenses rose to 688 million euros (2.7 million) from 577 million a year earlier, and it said in April marketing expenses would rise materially in the second quarter with the introduction of several new products.

Even though Kallasvuo will take over as chief executive next week, the brand-refreshing campaign has already started. Nokia has revamped its Web pages (http://www.nokia.com) and opened the first of its branded stores -- ''flagship stores'' it calls them.

''Nokia will be quite proactive in leading the change in the marketplace as opposed to being a follower,'' said Kallasvuo.

In the past, its designs missed two major trends. It was late in coming out with folding flip phones in 2004, losing market share to rivals, and it has yet to come out with a thin model.

Nokia replaced its long-time head of design, Frank Nuovo, who was behind many of the company's top models in the 1990s, with Alastair Curtis earlier this year.

Although Nokia was the first to introduce bright colours and expressionist designs in compact phones, Nuovo never strayed far from the monoblock form.

With its latest phones, Nokia is expanding the range of flip phones and sliders to match rival offerings, while at the same time aiming to take a lead on competitors by improving the guts of its phones with powerful, easier-to-use and more versatile software and features.

''We got great strategies in place; we are making good progress; there is no drama,'' Kallasvuo said.

With 26 years of employment with the company, Kallasvuo held the role of chief financial officer for about 10 years and ran Mobile Phones, Nokia's biggest unit by volume and profits, in 2004-2005.

The company has revamped most of its management team in just a few years.

''I'll get a good feeling when I look at our new young management team. They are very aggressive, willing to take risks and can uphold and develop processes which are needed in such a big company,'' Ollila said in a recent meeting with journalists.

REUTERS CS ND1804