Nokia hits back with new phones amid turmoil at top

The new Nokia E7 smartphone is seen in this handout photograph released in London September 14, 2010. REUTERS/Nokia/Handout

By Tarmo Virki and Georgina Prodhan

LONDON (Reuters) - Nokia unveiled an arsenal of smartphones crucial to its fightback against Apple's iPhone and Research in Motion's BlackBerry after its most fundamental management shake-up in decades.

At its annual showcase conference -- attended by neither outgoing Chief Executive Olli-Pekka Kallasvuo nor incoming CEO Stephen Elop -- the world's biggest cellphone maker introduced three new models it is banking on to be a hit this Christmas.

"Nokia is back!," the company's sales chief, Niklas Savander, declared to an audience of software developers, analysts and journalists at the opening of Nokia World, in a speech peppered with references to Nokia's competitors.

Nokia still controls around 40 percent of the global smartphone market and sells about one in three of all phones, but has lost out in the fatter-margin market for the most expensive cellphone models.

"We've lost a little bit of the shine in our high-end devices. That's being solved today," Colin Giles, head of global sales, told Reuters. "We need to rebuild our brand, for sure."

Nokia's answers to the competition were presented in an opening keynote by Anssi Vanjoki, the head of Nokia's smartphones and services, who had announced his resignation a day earlier after being passed over for the CEO role a second time.

The new models all come with large touchscreens -- following a trend started three years ago by the iPhone -- and use Nokia's latest Symbian software.

The E7, C7 and a new version of the C6 will go on sale before the end of the year at prices ranging from 260-495 euros, excluding subsidies and taxes.

"The products are a clear improvement... but we know they are not where Nokia needs to be yet, and any other promise around 'we are working on it' would have not convinced anyone," said Gartner analyst Carolina Milanesi.

"A new CEO and the old guard stepping down might give investors more confidence that things are really changing."

Last week, Nokia announced it was hiring Stephen Elop, a Canadian Microsoft executive with Silicon Valley credentials, to replace Kallasvuo, who had presided over a near-halving of Nokia's market value.

Chairman Jorma Ollila, who led Nokia's transformation from a rubber boots-to-TVs conglomerate into a mobile phones giant in the 1990s, said he would also step down after helping with the management transition.

Nokia shares were 1.8 percent lower at 7.75 euros by 1225 GMT on Tuesday, but had risen 15 percent over the last two weeks on expectations of an improving smartphone portfolio.

Executives at the Nokia World event in London did their best to carry on business as usual.

"I'm very excited about Symbian 3," services chief Tero Ojanpera said when asked by Reuters about upheaval at the company. "We are here to talk about the Nokia World today."

Ben Wood, chief analyst at UK-based telecoms research firm CCS Insight, said: "In the midst of management turmoil Nokia is attempting to keep a steady hand on the tiller."

"Although many questions are being raised about its future strategic direction, in the near term we expect the company to stick with the vision it has outlined today."