The world's largest mobile phone maker Nokia has appointed Stephen Elop, head of Microsoft's Business Division as the new chief executive of Nokia as of Sept. 21, replacing Nokia's current CEO Olli-Pekka Kallasvuo, according to a statement made the company on Friday.

"The time is right to accelerate the company's renewal, to bring in new executive leadership with different skills and strengths in order to drive company success," said Jorma Ollila, chairman of the Nokia Board of Directors, in the statement.

"The Nokia Board believes that Stephen has the right industry experience and leadership skills to realize the full potential of Nokia. His strong software background and proven record in change management will be valuable assets as we press harder to complete the transformation of the company. We believe that Stephen will be able to drive both innovation and efficient execution of the company strategy in order to deliver increased value to our shareholders."

Elop, a 46-year-old Canadian, currently heads Microsoft's Business Division and held senior executive positions in a number of U.S.-based public companies, including Juniper Networks, Adobe Systems Inc. and Macromedia Inc. He holds a degree in computer engineering and management from McMaster University in Hamilton, Canada.

Olli-Pekka Kallasvuo will leave his current position as President and CEO of Nokia on Sept. 20, 2010. He will continue to chair the Board of Nokia Siemens Networks in a non-executive capacity.

Kallasvuo is entitled to a severance payment consisting of 18 months gross base salary and target incentive which totals approximately 4.6 million euro. Kallasvuo succeeded Ollila as chief executive in 2006.

Finnish mobile phone maker Nokia has kept a firm grip of the mass market, but growing competition from rivals like Apple, Blackberry-maker Research in Motion Ltd. and devices based on Google Inc's Android platform has hit its high-end market share and margins.

The company's downward trajectory began on Kallasvuo's watch, after Apple began shipping iPhones in June, 2007. Since then, Nokia shares have lost two thirds of their worth, wiping out 60 billion euros in market value.