Nokia’s chief executive demanded that speculation about his future at the world’s largest maker of mobile phones be brought to an end because it was damaging the company.

Olli-Pekka Kallasvuo – speaking on the release of the group’s second-quarter results, which recorded a sharp drop in net profits – was unable to say whether he would continue as chief executive following reports that Jorma Ollila, Nokia’s chairman, has been looking for a replacement.

Nokia Q2 results
SalesNet profitEarnings per shareDividend
€10bn€104m€0.06-
↑1%↓63%↓40%-

He told CNBC television on Thursday: “Obviously there has been a lot of speculation on my position…This speculation is detrimental. It’s not good for Nokia and I feel it needs to be brought to an end one way or the other.”

Mr Kallasvuo said he was not in a position to comment when pressed as to whether he would remain chief executive.

Mr Kallasvuo has come under growing pressure because of Nokia’s failure to produce a smartphone that matches Apple’s iPhone, which was launched in June 2007. Apple this week reported revenues of $15.7bn for its latest quarter, a jump of 61 per cent.

His comments came as Nokia announced a sharp drop in second-quarter net profits, broadly in line with market expectations since the company lowered its earnings guidance for the second time this year in June.

On Tuesday the Wall Street Journal reported that Mr Ollila had approached leaders of US technology companies about whether they would be interested in replacing Mr Kallasvuo.

He admitted he was disappointed that Nokia had so far not produced a sophisticated smartphone with mass consumer appeal. “It is very clear we are lacking the high-end workhorse,” he added.

However, Mr Kallasvuo said a revamp of Nokia’s Symbian operating system should improve the quality of its smartphones. He also highlighted Nokia’s plans for MeeGo, a new operating system that will be used in sophisticated smartphones, and said it would be a “strong weapon” in tackling the Finnish company’s weak sales position in the US.

Second-quarter net profits were €104m ($81m), down from €287m in the same period last year. Sales were up 1 per cent at €10bn.

The results highlighted the competitive pressures facing Nokia. Its operating profit margin fell to 2.9 per cent, from 4.3 per cent last year, while the average selling price of its phones dropped from €64 to €61.

Nokia is facing pressure not only from Apple and others at the high end of the market but also from low-cost Asian producers in emerging markets – where it has traditionally dominated.

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