Justin Hotard (pictured) officially took the helm as Nokia’s new CEO and president this week and immediately set out his strategy, arguing there was a need for the vendor to reinvent itself to truly tap into opportunity around AI, but also stay true to its traditional business.
In a video post on LinkedIn to mark his first day as boss, the former Intel executive said he was excited to join Nokia to lead the company through its next chapter.
“We’ve got tremendous assets, tremendous technology, but it’s also about making sure we maximise the opportunity in front of us.”
Hotard was named as Pekka Lundmark’s replacement in February, but rumours began to surface that Nokia was seeking a change in September last year.
While his predecessor is widely credited with leading a turnaround during less than five years at the helm, the vendor’s share price failed to surge, revenue was volatile at the best of times, and it lost out on some big contracts (most notably a $14 billion open RAN deal with AT&T to Ericsson).
There will no doubt be an expectation for Hotard to step up where Lundmark struggled.
He said as much in his opening message, highlighting a “great opportunity for us to enhance humanity while we serve our customers and ultimately deliver compelling returns for our shareholders”.
But, against the backdrop of a tense geopolitical situation between Europe and the US, pressure to increase 5G market share in the face of competition with Ericsson and Chinese rivals, as well as set a path to drive the company’s AI ambitions, Hotard has a packed agenda.
On his first day in the job, Mobile World Live spoke to industry analysts about short-term priorities and took a glance at long-term aims.
AI supercycle
Ian Fogg, head of network research at CCS Insight, noted Nokia’s ambitious growth plans in data centres and in the defence market, while echoing Hotard’s opening address by pointing out the new leader must balance new with the old.
Fogg said Nokia should focus on “maximising revenue in those areas while driving the company to be competitive in its traditional business areas like mobile and fixed networks that still generate the bulk of revenue.”
As the former head of Intel’s Data Centre and AI Group, it has been widely suggested Nokia is seeking to use Hotard’s experience to tap into the AI revolution by upping its data centre presence.
Addressing the “AI supercycle” in his opening remarks, Hotard did point to “massive early demand” for data centre builds, while adding that its core CSP customers are going to have to transform in the same way they did in the internet era when they went from voice to data.
“That means there’s great opportunity for our fixed infrastructure, but more importantly, for our mobile networks and cloud network services businesses.”
Paolo Pescatore, founder and chairman of PP Foresight, believes Hotard’s appointment provides a sense of Nokia’a future direction, agreeing with Fogg that AI and data centres represent a key future growth area, with Hotard’s past experience key.
“He will need to execute on major growth targets which reinforces the importance of its diversification strategy, including data centres, defence, private wireless and industrial edge.”
This builds upon the core engines of growth around trusted connectivity, added Pescatore.
Trump, tariffs, threats
The potential impact of the current geopolitical situation and the changing landscape of politics in the US must also be considered when assessing Hotard’s in-tray.
Notably, Lundmark also took the role during a Donald Trump administration, and at the time it was even floated that the US government was considering taking a controlling stake in Nokia or Ericsson.
Indeed, the rationale has not gone away (manufacturing of telecoms equipment is a rare area of technology in which the US does not have a home-grown presence) but the current landscape of European, US relations would make such a move even more of a shock than it would have five years ago.
Instead, Hotard, a US citizen, will have to find the best way to navigate a global tariff war, souring relations between his homeland and his Finland-headquartered company, as well as continue to grow business in the region.
In one of his last addresses as Nokia boss, Lundmark insisted at MWC25 the company’s acquisition of US-based Infinera, which completed this year, gave it component manufacturing capabilities in the US and thus shielded it from certain tariffs, but added that a global tariff war “would not be to anyone’s benefit”.
Pescatore concurred with Lundmark, stating a trade war is in no-one’s interests, and uncertainty will remain for some time.
“Hotard will need to work closely with European regulators as well as further diversify its own channels and partners,” said Pescatore.
The impact of tariffs to the sector is something not to be scoffed at. A recent report by PwC estimated total US tariff measures could increase the impact on telecoms, media and technology from $13 billion to $139 billion, and this does not consider countermeasures imposed by trading partners.
Assessing the entire vendor landscape, James Robinson, senior analyst at Assembly Research, argued the geopolitical situation could actually “present some opportunities for Nokia (and Ericsson) in Europe”.
He further pointed out the European Commission EVP for tech sovereignty, security and democracy, Henna Virkkunen, has expressed dissatisfaction with the pace at which Member States have moved to remove so-called high-risk vendors and wants this to be accelerated.
“Security is high on the agenda, which could lead to further measures to speed things up. This could potentially benefit Nokia, if that push to remove Huawei ramps up,” he said.
Balance
Hotard describes himself as a “techno optimist”, and name-checked many buzz words during his first remarks as the new man in charge. Enterprise, edge, AI, robotics and agentic AI were all mentioned, “all creating new demands on secure reliable connectivity”.
He further provided an insight into his leadership style, stating his approach centres on stretching and challenging people and teams collectively to “exceed the status quo”.
For CCS Insight’s Fogg, “balancing growth and existing business needs is a challenge for any CEO, especially one new to a company”.
“Not only do finite resources need to be allocated to both new and traditional areas, but the CEO must motivate the teams in the less exciting areas to deliver and not feel sidelined.”
And with Nokia operating a vast product portfolio, “wider than Ericsson’s”, added Fogg, one of the biggest challenges facing Hotard is “allocating effort people and funding, which is harder than in a more focused narrow business”.