Even the most successful bosses have to step aside eventually

Mr Ollila was central in Nokia shedding its image as a staid industrial group for one of a hip technology company.

He will be replaced by Olli-Pekka Kallasvuo on 1 June, 2006.

Analysts welcomed the change, saying that despite the 54-year-old's performance the company was in need of some new momentum.

Mr Ollila has been at the helm of Nokia since 1992.

'New blood'

"Confidence in Jorma Ollila has been a bit shaky for a while, mainly because he has a problem in living up to the promises he gave," said Urban Ekeland, an analyst at Redeye.

"He has been there a long time and new blood is needed because of Nokia's future challenges."

Mr Kallasvuo currently heads Nokia's mobile phones division and has been at the company for 25 years, having spent a decade working as chief financial officer.

Nokia said that Mr Ollila will stay on as chairman and chief executive until the change to ensure an orderly transition.

Nokia shares were down slightly at 0.8% at 13.06 euros.