Nokia
Nokia Corporation is a Finnish multinational telecommunications, information technology, and consumer electronics corporation, originally established as a pulp mill in 1865. Nokia's main headquarters are in Espoo, Finland, in the Helsinki metropolitan area, but the company's actual roots are in the Tampere region of Pirkanmaa. In 2020, Nokia employed approximately 92,000 people across over 100 countries, did business in more than 130 countries, and reported annual revenues of around €23 billion. Nokia is a public limited company listed on the Nasdaq Helsinki and New York Stock Exchange. It was the world's 415th-largest company measured by 2016 revenues, according to the Fortune Global 500, having peaked at 85th place in 2009. It is a component of the Euro Stoxx 50 stock market index.
The company has operated in various industries over the past 150 years. It was founded as a pulp mill and had long been associated with rubber and cables, but since the 1990s has focused on large-scale telecommunications infrastructure, technology development, and licensing. Nokia made significant contributions to the mobile telephony industry, assisting in the development of the GSM, 3G, and LTE standards. For a decade beginning in 1998, Nokia was the largest worldwide vendor of mobile phones and smartphones. In the later 2000s, however, Nokia suffered from a series of poor management decisions and soon saw its share of the mobile phone market drop sharply.
After a partnership with Microsoft and Nokia's subsequent market struggles, in 2014, Microsoft bought Nokia's mobile phone business, incorporating it as Microsoft Mobile. After the sale, Nokia began to focus more on its telecommunications infrastructure business and on Internet of things technologies, marked by the divestiture of its Here mapping division and the acquisition of Alcatel-Lucent, including its Bell Labs research organization. The company also experimented with virtual reality and digital health, the latter through the purchase of Withings. The Nokia brand returned to the mobile and smartphone market in 2016 through a licensing arrangement with HMD. Nokia continues to be a major patent licensor for most large mobile phone vendors. Nokia is the world's third-largest network equipment manufacturer.
The company was viewed with national pride by Finns, as its mobile phone business made it by far the largest worldwide company and brand from Finland. At its peak in 2000, Nokia accounted for 4% of the country's GDP, 21% of total exports, and 70% of the Nasdaq Helsinki market capital.
History
1865–1967
Nokia's history dates from 1865, when mining engineer Fredrik Idestam established a pulp mill on the shores of the Tammerkoski rapids near the town of Tampere, Finland. A second pulp mill was opened in 1868 near the neighboring town of Nokia, where there were better hydropower resources. In 1871, Idestam, together with a friend Leo Mechelin, formed a shared company and called it Nokia Ab, after the site of the second pulp mill.Idestam retired in 1896, making Mechelin the company's chairman; he expanded into electricity generation by 1902, which Idestam had opposed. In 1904, Suomen Kumitehdas, a rubber business founded by Eduard Polón, established a factory near the town of Nokia and used its name.
In 1922, in the now independent Finland, Nokia Ab entered into a partnership with the Finnish Rubber Works and Kaapelitehdas, all now jointly under the leadership of Polón. The rubber company grew rapidly when it moved to the Nokia region in the 1930s to take advantage of the electricity supply, and the cable company soon did too.
Nokia at the time also made respirators for both civilian and military use, from the 1930s well into the early 1990s.
1967–1988
In 1967, the three companies – Nokia, Kaapelitehdas, and Finnish Rubber Works – merged to create a new Nokia Corporation, restructured into four major businesses: forestry, cable, rubber, and electronics. In the early 1970s, it entered the networking and radio industries. Nokia started making military equipment for Finland's defence forces, such as the Sanomalaite M/90 communicator in 1983, and the M61 gas mask first developed in the 1960s. Nokia was now also making professional mobile radios, telephone switches, capacitors and chemicals.After Finland's trade agreement with the Soviet Union in the 1960s, Nokia expanded into the Soviet market. It soon widened trade, ranging from automatic telephone exchanges to robotics among others; by the late 1970s, the Soviet Union became a major market for Nokia, yielding high profits. The U.S. government became increasingly concerned of the possible export of items it deemed as high technology, such as digital telephone exchanges, to the Soviet Union in the 1980s. This led to Finland entering the Coordinating Committee for Multilateral Export Controls in 1987. This was a demonstration of Finland balancing between both sides, as it was neutral during the Cold War.
In 1977, Kari Kairamo became CEO and transformed the company's businesses. By this time, Finland was becoming what has been called "Nordic Japan". Under his leadership, Nokia acquired many companies, including television maker Salora in 1984, followed by Swedish electronics and computer maker Luxor AB in 1985, and French television maker Oceanic in 1987. This made Nokia the third-largest television manufacturer of Europe. The existing brands continued to be used until the end of the television business in 1996.
In 1979, in a joint venture with Salora Oy, Nokia established Mobira, a mobile radio telephone manufacturer that would go on to become the foundation of Nokia's mobile phone business.
In 1981, Mobira launched the Nordic Mobile Telephone service, the world's first international cellular network and the first to allow international roaming. In 1982, Mobira launched the Mobira Senator car phone, Nokia's first mobile phone. At that time, the company had no interest in producing mobile phones, which the executive board regarded as akin to James Bond's gadgets: improbably futuristic and niche devices.
In 1984, Nokia acquired Mobira.
In 1987, Nokia acquired Schaub-Lorenz, the consumer operations of Germany's Standard Elektrik Lorenz, which included its "Schaub-Lorenz" and "Graetz" brands. It was originally part of American conglomerate International Telephone & Telegraph, and after the acquisition products were sold under the "ITT Nokia" brand, despite SEL's sale to Compagnie Générale d'Electricité, the predecessor of Alcatel, in 1986.
In 1987, Kaapelitehdas discontinued production of cables at its Helsinki factory after 44 years, effectively shutting down the sub-company.
On 1 April 1988, Nokia bought the Information Systems division of Ericsson, which had originated as the Datasaab computer division of Swedish aircraft and car manufacturer Saab. Ericsson Information Systems made Alfaskop terminals, typewriters, minicomputers and Ericsson-branded IBM compatible PCs. The merger with Nokia's Information Systems division—which since 1981 had a line of personal computers called MikroMikko—resulted in the name Nokia Data.
After all these acquisitions, Nokia's revenue base became US$2.7 billion.
CEO Kairamo killed himself on 11 December 1988.
1988–2010
Following Simo Vuorilehto's appointment as CEO, a major restructuring was planned. With 11 groups within the company, Vuorilehto divested industrial units he deemed as un-strategic. Nokian Tyres, a tyre producer originally formed as a division of Finnish Rubber Works in 1932, split away from Nokia Corporation in 1988. Two years later, in 1990, Finnish Rubber Works followed suit. In 1991, Nokia sold its computer division, Nokia Data, to UK-based International Computers Limited, the precursor of Fujitsu Siemens. Investors thought of this as financial trouble and Nokia's stock price sank as a result. Finland was now also experiencing its worst recession in living memory, and the collapse of the Soviet Union, a major customer, made matters worse.Vuorilehto quit in January 1992 and was replaced by Jorma Ollila, who had been the head of the mobile phone business from 1990 and advised against selling that division. Ollila decided to turn Nokia into a "telecom-oriented" company, and he eventually got rid of divisions like the power business. This strategy proved to be very successful, and the company grew rapidly in the following years. Nokia's operating profit went from negative in 1991 to $1 billion in 1995 and almost $4 billion by 1999.
Nokia's first fully portable mobile phone after the Mobira Senator was the Mobira Cityman 900 in 1987. Nokia assisted in the development of the GSM mobile standard in the 1980s and developed the first GSM network with Siemens, the predecessor to Nokia Siemens Network. The world's first GSM call was made by Finnish prime minister Harri Holkeri on 1 July 1991, using Nokia equipment on the 900 MHz band network built by Nokia and operated by Radiolinja. In November 1992, the Nokia 1011 launched, making it the first commercially available GSM mobile phone.
Salora Oy as a Nokia subsidiary ended in 1989 when the division was merged into Nokia-Mobira Oy. The brand continued to be used for televisions until 1995.
On 12 June 1996, Nokia announced the sale of its television business to Canada/Hong Kong-based Semi-Tech Corporation. The television manufacturing plant in Germany closed down in September 1996. The sale included a factory in Turku and the rights to use the Nokia, Finlux, Luxor, Salora, Schaub-Lorenz, and Oceanic brands until the end of 1999. Some of these brands were later sold to other companies.
Nokia was the first to launch digital satellite receivers in the UK, announced in March 1997. In August 1997, Nokia introduced the first digital satellite receiver with Common Interface support. In 1998, Nokia became the chosen supplier to produce the world's first digital terrestrial television set-top boxes by British Digital Broadcasting, which was eventually launched as ONdigital.
In October 1998, Nokia overtook Motorola to become the best-selling mobile phone brand and in December, manufactured its 100 millionth mobile phone. A major reason why Nokia grew against its main competitors Motorola and Ericsson was that it managed to cater to the consumer youth market and fashion-oriented consumers, most significantly with the Nokia 5110 and 3210 handsets, which featured a large range of colourful and replaceable back covers called Xpress-on. One of the earliest fashion phones in 1992, from Swiss watchmaker Swatch, was based on Nokia's 101 handset. The company would also form the Vertu division, creating luxury mobile handsets.
In April 1996, Nokia claimed its 447Xav and 447K monitors to be the first with stereo speakers and a subwoofer. In May 1999, Nokia introduced their first wireless LAN products. In January 2000, ViewSonic acquired Nokia Display Products, the division making displays for personal computers. On 26 April 2001, Nokia partnered with Telefónica to supply DSL modems and routers in Spain.
In 1997, Nokia established a joint venture with Brazilian electronics firm Gradient where they were granted the license to manufacture variants of Nokia mobile phones locally under the Nokia and Gradient brand names.
In 1998, Nokia cofounded Symbian Ltd., led by Psion, to create a new operating system for PDAs and smart mobile phones as a successor of EPOC32. They released the Nokia 9210 Communicator running Symbian OS in 2001 and later that year created the Symbian Series 60 platform, later introducing it with their first camera phone, the Nokia 7650. Both Nokia and Symbian eventually became the largest smartphone hardware and software maker, respectively, and in February 2004, Nokia became the largest shareholder of Symbian Ltd. Nokia acquired the entire company in June 2008 and then formed the Symbian Foundation as its successor.
In 1998 alone, the company had sales revenue of $20 billion, making $2.6 billion profit. By 2000, Nokia employed over 55,000 people and had a market share of 30% in the mobile phone market, almost twice as large as its nearest competitor, Motorola. The company was operating in 140 countries as of 1999. It was reported at the time that some people believed Nokia to be a Japanese company. Between 1996 and 2001, Nokia's turnover increased fivefold, from €6.5 billion to €31 billion. Meanwhile, a Reader's Digest survey held near end 2000 showed that Nokia was the "most trusted brand in Europe", ranking better than Sony, Canon, and Nivea.
The company would then be known as a successful and innovative maker of camera phones. The Nokia 3600/3650 was the first camera phone on sale in North America in 2003. In April 2005, Nokia partnered with German camera optics maker Carl Zeiss AG. That same month, Nokia introduced the Nseries, which would become its flagship line of smartphones for the next six years. The Nokia N95 was introduced in September 2006, became highly successful, and was also awarded "best mobile imaging device" in Europe in 2007. Its successor the N82 featured a xenon flash, which helped it win the award of "best mobile imaging" device in Europe in 2008. The N93 in 2006 was known for its specialized camcorder and the twistable design that switches between clamshell and a camcorder-like position. They were also well known for the N8 with a high-resolution 12-megapixel sensor, in 2010; the 808 PureView with a 41-megapixel sensor, in 2012; and the Lumia 920 flagship, which implemented advanced PureView technologies, in 2012.
Nokia was one of the pioneers of mobile gaming due to the popularity of Snake, which came preloaded on many products. In 2002, Nokia attempted to break into the handheld gaming market with the N-Gage. Nokia's head of entertainment and media, Ilkka Raiskinen, once said, "Game Boy is for 10-year-olds", stating that N-Gage is more suited to a mature audience. However, the device was a failure, unable to challenge the dominant market leader, Nintendo. Nokia attempted to revive N-Gage as a platform for their S60 smartphones, which eventually launched in 2008.
In Q1 2004, Nokia's mobile phone handset market share steeply dropped to 28.9%, down from 34.6% a year earlier. However, by 2006, the company was steadily gaining again and in Q4 2007 reached its all-time high figure of 40.4%. Its smartphone market share in that quarter was 51%. Nokia was the largest vendor at the time in all regions bar North America.
Nokia launched mobile TV trials in 2005 in Finland with content provided by public broadcaster Yle. The services are based on the DVB-H standard. It could be viewed with the widescreen Nokia 7710 smartphone with a special accessory enabling it to receive DVB-H signals. Nokia partnered with Arqiva and O2 to launch trials in the UK in September 2005.
In 2005, Nokia developed a Linux-based operating system called Maemo, which shipped that year on the Nokia 770 Internet Tablet.
On 1 June 2006, Jorma Ollila became the company's chairman and retired as CEO, replaced by Olli-Pekka Kallasvuo.
In August 2007, Nokia introduced Ovi, an umbrella name for the company's new Internet services, which included the N-Gage platform and the Nokia Music Store. The Ovi Store faced stiff competition from Apple's App Store when it was introduced in 2008.
In October 2008, Nokia announced the Nokia 5800 XpressMusic, the first device to ship with the new touch-centric S60 5th Edition, also known as Symbian^1, the first iteration of the platform since the creation of the Symbian Foundation. In November 2008, Nokia announced it would end mobile phone sales in Japan because of low market share. Nokia's global mobile phone market share peaked in 2008 at 38.6 percent. The same year, Nokia announced the acquisition of Trolltech and its Qt software development. Qt was a central part of Nokia's strategy until 2011, and it was eventually sold in 2012.
Nokia briefly returned to the computer market with the Booklet 3G netbook in August 2009.