A 25-year veteran at Nokia, Kallasvuo held the role of chief financial officer for about 10 years and took over as head of Mobile Phones in January 2004.

Ollila, who has been chief executive for 13 years and chairman for six years, will remain as non-executive chairman after Kallasvuo takes the helm, Nokia said.

Shares in the group slipped as analysts questioned whether the new head had the ability to lead a recovery at the group.

Under Ollila, Nokia's shares surged to make it the most valuable company by market value in Europe in 2000, helped by a 10- fold increase in revenue. Making one in three phones globally, it now has a market capitalization of about 58 billion euros.     

Nokia faces fierce price competition, which hurt in the second quarter and the company shocked investors last month with a weak forecast for third-quarter profits.

Nokia, based in Espoo just outside the Finnish capital, has sales in 130 countries and about 55,500 employees.

(Photo: The Canadian Press)