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Rajeev Suri to step down as Nokia CEO; Pekka Lundmark to take over

Rajeev Suri, the chief executive of Nokia, is stepping down from his leadership role after overseeing the Finnish networking giant for more than half a decade. Pekka Lundmark, the outgoing President and CEO of energy firm Fortum, has been elected as the President and Chief Executive Officer of Nokia, the Finnish company announced on Monday.

The networking giant said Suri had expressed his intention to step down from the role and that they have been working to formulate a smooth transition. “After 25 years at Nokia, I have wanted to do something different,” said Suri, who will leave his current position on August 31 and continue to serve as an advisor to the Nokia Board until January 1 next year. Lundmark is expected to start in his new role on September 1 this year.

The announcement comes days after Bloomberg News reported that Nokia was exploring a range of strategic options including selling portions of its business assets to merger potential merger deals.

“Nokia will always be part of me, and I want to thank everyone that I have worked with over the years for helping make Nokia a better place and me a better leader. I leave the company with a belief that a return to better performance is on the horizon and with pride for what we have accomplished over time. Pekka is an excellent choice for Nokia. I look forward to working with him on a smooth transition and wish him the best success in his new role,” said Suri, in a statement.

The company, like its rivals Ericsson and Huawei, is building technologies and products for 5G networks. But some analysts have argued that Nokia’s move to buy Alcatel-Lucent, maker of communications systems, distracted it from becoming the market leader for 5G networks-compatible products and technologies.

“With the acquisition of Alcatel-Lucent behind us and the world of 5G in front of us, I am pleased that Pekka has agreed to join Nokia,” said Risto Siilasmaa, Nokia Board Chair, in a statement.

Nokia’s Technology unit, which manages the company’s patent portfolio, reported 3% growth in its operating profit to 1.24 billion euros ($1.35 billion) in 2019, while its sales slipped 1% to 1.49 billion euros. The company’s future prospects received a boost after U.S. Attorney General William Barr urged the nation and its allies last week to consider investing in Nokia and Ericsson to counter Huawei’s dominance in 5G technology, fueling speculation of merger and acquisition activities.

The company’s board said in Lundmark, it is getting a leader who has “consistently delivered robust total shareholder returns, successfully renewed the company’s strategy, and positioned it to be a strong player in the transforming global energy sector.”

In a statement, Lundmark said, “together we can create shareholder value by delivering on Nokia’s mission to create the technology to connect the world. I am confident that the company is well-positioned for the 5G era and it is my goal to ensure that we meet our commitments to our customers, employees, shareholders and other stakeholders.”

This is a developing story…

Tech stocks slide on US decision to blacklist Huawei and 70 affiliates

The United States has been lobbying for months to prevent its western allies from using Huawei equipment in their 5G deployment, and on Wednesday, Washington made it more difficult for the Chinese telecom titan to churn out those next-gen products.

The U.S. Department of Commerce announced that it will add Huawei and its 70 affiliates to the so-called ‘Entity List,’ a move that will prevent the telecom giant from buying parts and components from U.S. companies without approval from Washington. That confirms reports of the potential ban a day before.

Despite being the largest telecom equipment maker around the world, Huawei relies heavily on its American suppliers, giving the U.S. much leeway to hobble the Chinese firm’s production.

Following the dramatic move, shares of a gauge of Huawei affiliates slumped on Wednesday. Tatfook Technology, which sells to Huawei as well as Ericsson and Bosch, dropped 2.84 percent in Shenzhen in morning trading. New Sea Union Telecom, a supplier to China’s ‘big three’ telecom network operators and Huawei, slid 4.88 percent. Another Huawei key partner Chunxing Precision Mechanical dropped as much as 5.37 percent.

Huawei did not comment directly on the Commerce Department’s blacklist when reached out by TechCrunch, but said it’s “ready and willing to engage with the U.S. government and come up with effective measures to ensure product security.”

“Restricting Huawei from doing business in the U.S. will not make the U.S. more secure or stronger; instead, this will only serve to limit the U.S. to inferior yet more expensive alternatives, leaving the U.S. lagging behind in 5G deployment, and eventually harming the interests of U.S. companies and consumers,” Huawei hit back in the statement.

This view is congruent with some of the harshest criticisms of Washington’s backlash against Huawei. Scholars and industry observers warn that Chinese tech firms have become such an integral part to the global economy that severing ties with Huawei will do ham to 5G advancement worldwide.

In addition, the Chinese company said the U.S.’s “unreasonable restrictions will infringe upon Huawei’s rights and raise other serious legal issues,” though it did not spell out what those rights and legal concerns are.

The announcement dropped on the same day U.S. President Donald Trump declared “a national emergency” over technology supply chain threats from the country’s “foreign adversaries”.

The Commerce Department said it has a reasonable basis to conclude that “Huawei is engaged in activities that are contrary to U.S. national security or foreign policy interest.”

Some of the U.S’s allies including the U.K. are still investigating Huawei’s possible security threat and deciding how close a link they should keep with Huawei, but the Shenzhen-based company has already taken a bold step to give its potential clients some assurance.

Just this Tuesday, Huawei told reporters in London that it’s “willing to sign no-spy agreements with governments, including the U.K. government,” and commit itself to making its equipment “meet the no-spy, no-backdoors standard.”

The U.S.’s tit-for-tat with Huawei also includes the push to arrest the company’s CFO Meng Wanzhou on charges that Huawei did business in Iran in breach of U.S. sanctions.