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Keilalahdentie 2-4 Fl-02150 Espoo, Finland Tel. +358-7-1800-8000 Fax +358-7-1803-4003 |
Type: Public
On the web:
http://www.nokia.com
Employees:
130,050
Employee growth: (1.8%)
Nokia is not a plea to boycott the South Korean car manufacturer -- it's the world's #1 maker of cell phones, ahead of such rivals as Motorola Mobility and Samsung. First incorporated in the eponymous Finnish city, Nokia's business consists of mobile device manufacturing and services -- shifting its focus to Microsoft's Windows mobile platform -- as well as NAVTEQ (digital map content and services). Nokia also operates the Nokia Siemens Networks in partnership with Munich-based Siemens; the joint venture is a leading player in the telecom infrastructure and services market, along with Ericsson and Alcatel-Lucent. China is, by more than double, Nokia's largest single-country market at nearly 20% of sales.
Key numbers for fiscal year ending December, 2011:
Sales: $51,922.9M
One year growth: (7.7%)
Net income: ($1,563.4)M
Officers:
Chairman: Jorma Ollila
President and CEO: Stephen A. Elop
VP Communications, Multimedia: Kari Tuutti
Competitors:
Ericsson
Motorola Mobility
Samsung Electronics
Incorporated: 1865
NAIC: 334210 Telephone Apparatus Manufacturing; 334220 Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing; 334310 Audio and Video Equipment Manufacturing; 334419 Other Electronic Component Manufacturing; 517212 Cellular and Other Wireless Telecommunications; 517910 Other Telecommunications; 551112 Offices of Other Holding Companies
SIC: 3661 Telephone & Telegraph Apparatus; 3663 Radio & T.V. Communications Equipment; 3651 Household Audio & Video Equipment; 3679 Electronic Components Nec; 4812 Radiotelephone Communications; 4899 Communications Services Nec; 6719 Holding Companies Nec
Nokia Corporation is the world's largest manufacturer of mobile phones, serving customers in 130 countries. Nokia is divided into four business groups: Mobile Phones, Multimedia, Enterprise Solutions, and Networks. The Mobile Phones group markets wireless voice and data products in consumer and corporate markets. The Multimedia segment sells mobile gaming devices, home satellite systems, and cable television set-top boxes. The Enterprise Solutions group develops wireless systems for use in the corporate sector. Wireless switching and transmission equipment is sold through the company's Networks division. Nokia operates 15 manufacturing facilities in nine countries and maintains research and development facilities in 12 countries.
19th-Century Origins
Originally a manufacturer of pulp and paper, Nokia was founded as Nokia Company in 1865 in a small town of the same name in central Finland. Nokia was a pioneer in the industry and introduced many new production methods to a country with only one major natural resource, its vast forests. As the industry became increasingly energy-intensive, the company even constructed its own power plants. But for many years, Nokia remained an important yet static firm in a relatively forgotten corner of northern Europe. Nokia shares were first listed on the Helsinki exchange in 1915.
The first major changes in Nokia occurred several years after World War II. Despite its proximity to the Soviet Union, Finland has always remained economically connected with Scandinavian and other Western countries, and as Finnish trade expanded Nokia became a leading exporter.
During the early 1960s Nokia began to diversify in an attempt to transform the company into a regional conglomerate with interests beyond Finnish borders. Unable to initiate strong internal growth, Nokia turned its attention to acquisitions. The government, however, hoping to rationalize two underperforming basic industries, favored Nokia's expansion within the country and encouraged its eventual merger with Finnish Rubber Works, which was founded in 1898, and Finnish Cable Works, which was formed in 1912, to form Nokia Corporation. When the amalgamation was completed in 1966, Nokia was involved in several new industries, including integrated cable operations, electronics, tires, and rubber footwear, and had made its first public share offering.
In 1967 Nokia set up a division to develop design and manufacturing capabilities in data processing, industrial automation, and communications systems. The division was later expanded and made into several divisions, which then concentrated on developing information systems, including personal computers and workstations, digital communications systems, and mobile phones. Nokia also gained a strong position in modems and automatic banking systems in Scandinavia.
Oil Crisis, Corporate Changes: 1970s
Nokia continued to operate in a stable but parochial manner until 1973, when it was affected in a unique way by the oil crisis. Years of political accommodation between Finland and the Soviet Union ensured Finnish neutrality in exchange for lucrative trade agreements with the Soviets, mainly Finnish lumber products and machinery in exchange for Soviet oil. By agreement, this trade was kept strictly in balance. But when world oil prices began to rise, the market price for Soviet oil rose with it. Balanced trade began to mean greatly reduced purchasing power for Finnish companies such as Nokia.
Although the effects were not catastrophic, the oil crisis did force Nokia to reassess its reliance on Soviet trade (about 12 percent of sales) as well as its international growth strategies. Several contingency plans were drawn up, but the greatest changes came after the company appointed a new CEO, Kari Kairamo, in 1975.
Kairamo noted the obvious: Nokia was too big for Finland. The company had to expand abroad. He studied the expansion of other Scandinavian companies (particularly Sweden's Electrolux) and, following their example, formulated a strategy of first consolidating the company's business in Finland, Sweden, Norway, and Denmark, and then moving gradually into the rest of Europe. After the company had improved its product line, established a reputation for quality, and adjusted its production capacity, it would enter the world market.
Meanwhile, Nokia's traditional, heavy industries were looking increasingly burdensome. It was feared that trying to become a leader in electronics while maintaining these basic industries would create an unmanageably unfocused company. Kairamo thought briefly about selling off the company's weaker divisions, but decided to retain and modernize them.
He reasoned that, although the modernization of these low-growth industries would be very expensive, it would guarantee Nokia's position in several stable markets, including paper, chemical, and machinery productions, and electrical generation. For the scheme to be practical, each division's modernization would have to be gradual and individually financed. This would prevent the bleeding of funds away from the all-important effort in electronics while preventing the heavy industries from becoming any less profitable.
With each division financing its own modernization, there was little or no drain on capital from other divisions, and Nokia could still sell any group that did not succeed under the new plan. In the end, the plan prompted the machinery division to begin development in robotics and automation, the cables division to begin work on fiber optics, and the forestry division to move into high-grade tissues.
Rise of Electronics: 1980s
Nokia's most important focus was development of the electronics sector. Over the course of the 1980s, the firm acquired nearly 20 companies, focusing especially on three segments of the electronics industry: consumer, workstations, and mobile communications. Electronics grew from 10 percent of annual sales to 60 percent of revenues from 1980 to 1988.
In late 1984 Nokia acquired Salora, the largest color television manufacturer in Scandinavia, and Luxor, the Swedish state-owned electronics and computer firm. Nokia combined Salora and Luxor into a single division and concentrated on stylish consumer electronic products, since style was a crucial factor in Scandinavian markets. The Salora-Luxor division was also very successful in satellite and digital television technology. Nokia purchased the consumer electronics operations of Standard Elektrik Lorenz A.G. from Alcatel in 1987, further bolstering the company's position in the television market to the third largest manufacturer in Europe.
In early 1988 Nokia acquired the data systems division of the Swedish Ericsson Group, making Nokia the largest Scandinavian information technology business.
Although a market leader in Scandinavia, Nokia still lacked a degree of competitiveness in the European market, which was dominated by much larger Japanese and German companies. Kairamo decided, therefore, to follow the example of many Japanese companies during the 1960s (and Korean manufacturers a decade later) and negotiate to become an original equipment manufacturer, or OEM, to manufacture products for competitors as a subcontractor.
Nokia manufactured items for Hitachi in France, Ericsson in Sweden, Northern Telecom in Canada, and Granada and IBM in Britain. In doing so it was able to increase its production capacity stability. There were, however, several risks involved, those inherent in any OEM arrangement. Nokia's sales margins were naturally reduced, but of greater concern, production capacity was built up without a commensurate expansion in the sales network. With little brand identification, Nokia feared it might have a difficult time selling under its own name and become trapped as an OEM.
In 1986 Nokia reorganized its management structure to simplify reporting efforts and improve control by central management. The company's 11 divisions were grouped into four industry segments: electronics; cables and machinery; paper, power, and chemicals; and rubber and flooring. In addition, Nokia won a concession from the Finnish government to allow greater foreign participation in ownership. This substantially reduced Nokia's dependence on the comparatively expensive Finnish lending market. Although there was growth throughout the company, Nokia's greatest success was in telecommunications.
Having dabbled in telecommunications in the 1960s, Nokia cut its teeth in the industry by selling switching systems under license from a French company, Alcatel. The Finnish firm got in on the cellular industry's ground floor in the late 1970s, when it helped design the world's first international cellular system. Named the Nordic Mobile Telephone (NMT) network, the system linked Sweden, Denmark, Norway, and Finland. A year after the network came on line in 1981, Nokia gained 100 percent control of Mobira, the Finnish mobile phone company that would later become its key business interest as the Nokia Mobile Phones division. Mobira's regional sales were vastly improved, but Nokia was still limited to OEM production on the international market; Nokia and Tandy Corporation, of the United States, built a factory in Masan, South Korea, to manufacture mobile telephones. These were sold under the Tandy name in that company's 6,000 Radio Shack stores throughout the United States.
In 1986, eager to test its ability to compete openly, Nokia chose the mobile telephone to be the first product marketed internationally under the Nokia name; it became Nokia's "make or break" product. Unfortunately, Asian competitors began to drive prices down just as Nokia entered the market. Other Nokia products gaining recognition were Salora televisions and Luxor satellite dishes, which suffered briefly when subscription programming introduced broadcast scrambling.
The company's expansion, achieved almost exclusively by acquisition, had been expensive. Few Finnish investors other than institutions had the patience to see Nokia through its long-term plans. Indeed, more than half of the new shares issued by Nokia in 1987 went to foreign investors. Nokia moved boldly into Western markets; it gained a listing on the London exchange in 1987 and was subsequently listed on the New York exchange.
Crises of Leadership, Profitability in the Late 1980s and Early 1990s
Nokia's rapid growth was not without a price. In 1988, as revenues soared, the company's profits, under pressure from severe price competition in the consumer electronics markets, dropped. Chairman Kari Kairamo committed suicide in December of that year; not surprisingly, friends said it was brought on by stress. Simo S. Vuorileto took over the company's reins and began streamlining operations in the spring of 1988. Nokia was divided into six business groups: consumer electronics, data, mobile phones, telecommunications, cables and machinery, and basic industries. Vuorileto continued Kairamo's focus on high-tech divisions, divesting Nokia's flooring, paper, rubber, and ventilation systems businesses and entering into joint ventures with companies such as Tandy Corporation and Matra of France (two separate agreements to produce mobile phones for the U.S. and French markets).
In spite of these efforts, Nokia's pretax profits continued to decline in 1989 and 1990, culminating in a loss of $102 million in 1991. Industry observers blamed cutthroat European competition, the breakdown of the Finnish banking system, and the collapse of the Soviet Union. But, notwithstanding these difficulties, Nokia remained committed to its high-tech orientation. Late in 1991, the company strengthened that dedication by promoting Jorma Ollila from president of Nokia-Mobira Inc. (renamed Nokia Mobile Phones Ltd. the following year) to group president.
Leading the Telecommunications Revolution: Mid-1990s and Beyond
Forbes's Fleming Meeks credited Ollila with transforming Nokia from "a moneylosing hodgepodge of companies into one of telecommunications' most profitable companies." Unable to find a buyer for Nokia's consumer electronics business, which had lost nearly $1 billion from 1988 to 1993, Ollila cut that segment's workforce by 45 percent, shuttered plants, and centralized operations. Having divested Nokia Data in 1991, Nokia focused further on its telecommunications core by selling off its power unit in 1994 and its television and tire and cable units the following year.
The new leader achieved success in the cellular phone segment by bringing innovative products to market quickly with a particular focus on ever smaller and easier-to-use phones featuring sleek Finnish design. Nokia gained a leg up in cellphone research and development with the 1991 acquisition of the United Kingdom's Technophone Ltd. for $57 million. The company began selling digital cellular phones in 1993.
Ollila's tenure brought Nokia success and with it global recognition. The company's sales more than doubled, from FIM 15.5 billion in 1991 to FIM 36.8 billion in 1995, and its bottom line rebounded from a net loss of FIM 723 million in 1992 to a FIM 2.2 billion profit in 1995. Securities investors did not miss the turnaround: Nokia's market capitalization multiplied ten times from 1991 to 1994.
In late 1995 and early 1996, Nokia suffered a temporary setback stemming from a shortage of chips for its digital cellular phones and a resultant disruption of its logistics chain. The company's production costs rose and profits fell. Nokia was also slightly ahead of the market, particularly in North America, in regard to the shift from analog to digital phones. As a result, it was saddled with a great number of digital phones it could not sell and an insufficient number of analog devices. Nevertheless, Nokia had positioned itself well for the long haul, and within just a year or two it was arch-rival Motorola, Inc. that was burdened with an abundance of phones it could not sell, analog ones, as Motorola was slow to convert to digital. As a result, by late 1998, Nokia had surpassed Motorola and claimed the top position in cellular phones worldwide.
Aiding this surge was the November 1997 introduction of the 6100 series of digital phones. This line proved immensely popular because of the phones' small size (similar to a slim pack of cigarettes), light weight (4.5 ounces), and superior battery life. First introduced in the burgeoning mobile phone market in China, the 6100 soon became a worldwide phenomenon. Including the 6100 and other models, Nokia sold nearly 41 million cellular phones in 1998. Net sales increased more than 50 percent over the previous year, jumping from FIM 52.61 billion ($9.83 billion) to FIM 79.23 billion ($15.69 billion). Operating profits increased by 75 percent, while the company's skyrocketing stock price shot up more than 220 percent, pushing Nokia's market capitalization from FIM 110.01 billion ($20.57 billion) to FIM 355.53 billion ($70.39 billion).
Not content with conquering the mobile phone market, Nokia began aggressively pursuing the mobile Internet sector in the late 1990s. Already on the market was the Nokia 9000 Communicator, a personal all-in-one communication device that included phone, data, Internet, e-mail, and fax retrieval services. The Nokia 8110 mobile phone included the capability to access the Internet. In addition, Nokia was the first company to introduce a cellular phone that could be connected to a laptop computer to transmit data over a mobile network. To help develop further products, Nokia began acquiring Internet technology companies, starting with the December 1997, $120 million purchase of Ipsilon Networks Inc., a Silicon Valley firm specializing in Internet routing. One year later, Nokia spent FIM 429 million ($85 million) for Vienna Systems Corporation, a Canadian firm focusing on Internet Protocol telephony.
Acquisitions continued in 1999, when a further seven deals were completed, four of which were Internet-related. Meanwhile, net sales increased a further 48 percent in 1999, while operating profits grew by 57 percent; riding the late 1990s high-tech stock boom, the market capitalization of Nokia took another huge leap, ending the year at EUR 209.37 billion ($211.05 billion). Nokia's share of the global cellular phone market increased from 22.5 percent in 1998 to 26.9 percent in 1999, as the company sold 76.3 million phones in 1999.
Nokia's ascendance to the top of the wireless world by the end of the 1990s could be traced to the company being able to consistently, over and over again, come out with high-margin products superior to those of its competitors and in tune with market demands. The continuation of this trend into the 21st century was by no means certain as the increasing convergence of wireless and Internet technologies and the development of the third generation (3G) of wireless technology (which followed the analog and digital generations and which was slated to feature sophisticated multimedia capability) were predicted to open Nokia up to new and formidable competitors.
Perhaps the greatest threat was that chipmakers such as Intel would turn mobile phones into commodities just as they had previously done with personal computers; the days of the $500 Nokia phone were potentially numbered. Nevertheless, Nokia's 25 percent profit margins were enabling it to spend a massive $2 billion a year on research and development and continue to churn out innovative new products, concentrating on the various standards being developed for 3G wireless networks.
A Two-Pronged Approach in the 21st Century
Mobile communications developed along two broad fronts during the first years of the century, both of which played to Nokia's advantage, ensuring that the company remained the leader of its industry. The evolution of handsets into multimedia devices ushered in by 3G technology meant that Nokia could continue to rely on marketing expensive, sophisticated handsets. The days of the $500 Nokia phone gave way to the days of increasingly more expensive phones, such as the Nokia N90, a unit featuring a camera with Carl Zeiss optics, video-recording capabilities, and Internet access. Nokia could count on a substantial share of the high end of the market, a segment that continued to thrive midway through the decade, but the company's greatest strength was in the lower end of the market. In countries such as China, Brazil, and India there was a tremendous demand for inexpensive mobile phones, with analysts expecting 50 percent of the one billion handsets sold between 2005 and 2010 to be sold in developing economies. Industry observers believed there were only two companies in the world that could seriously compete for the estimated 800-million-unit-per year market for inexpensive handsets: Motorola and Nokia. Rivals such as Samsung, Sony Ericsson, and LG Electronics preferred to confine their activities to the high end of the market, while emerging low-cost producers lacked the manufacturing efficiencies enjoyed by Nokia and Motorola.
Against the backdrop of favorable market trends supporting Nokia's entrenched position, the company experienced a rare event in its modern history: a change in leadership. After a decade-and-a-half at the helm, CEO Ollila announced his retirement, effective June 2006. His replacement was a 25-year Nokia veteran named Olli-Pekka Kallasvuo, a lawyer by training whom Fortune, in that magazine's October 31, 2005 issue, described as so taciturn that "he can seem like an extra from an Ingmar Bergman movie."
Kallasvuo, who was promoted from his position as the head of the handset division, inherited an impressively capable company whose greatest challenge was contending with Motorola for the low end of the market and beating back competitors for control of the high end of the market. "Nokia is a dynamic company in a fast-changing and fluid environment," Kallasvuo said in a November 29, 2005 interview with the South China Morning Post. "I look forward to working together with our team to help Nokia shape the future of mobile communications at a pivotal time for the industry."
Principal Subsidiaries
Nokia Holding Inc.; Nokia Products Limited (Canada); Nokia IP Telephony Corporation (Canada); Nokia Telecommunications Inc.; Nokia Inc.; Nokia (China) Investment Co. Ltd.; Nokia (H.K.) Limited (Hong Kong); Nokia (Ireland) Ltd.; Nokia Australia Pty Limited; Nokia Asset Management Oy; Nokia Austria GmbH; Nokia Danmark A/S (Denmark); Nokia Do Brasil Ltda. (Brazil); Nokia Do Brasil Tecnologia Ltda. (Brazil); Nokia Finance International B.V. (Netherlands); Nokia France; Nokia GmbH (Germany); Nokia India Private Limited; Nokia Italia Spa (Italy); Nokia Korea Ltd.; Nokia Mobile Phones; Nokia Networks; Nokia Norge AS (Norway); Nokia Oyj; Nokia Pte Ltd. (Singapore); Nokia Spain, S.A.; Nokia Svenska AB (Sweden); Nokia U.K. Ltd.; Nokia Ventures Organization; Bave Tartum (U.K.); Beijing Nokia Hangxing Telecommunications Systems Co., Ltd. (China); Doctortel--Assistencia De Telecomunicaes S.A. (Portugal); Funda Ao Nokia De Ensino (Brazil); Instituto Nokia De Tecnologia (Brazil); Nokia (M) Sdn Bhd (Malaysia); Nokia Argentina S.A.; Nokia Belgium NV; Nokia Capitel Telecommunications Ltd. (China); Nokia Ecuador S.A.; Nokia Hellas Communications S.A.; Nokia Hungary Kommunikacios Korlatolt Felelossegu Tarsasag (Hungary); Nokia Israel Ltd.; Nokia Middle East (United Arab Emirates; Nokia Nederland B.V. (Netherlands); Nokia Poland Sp Z.O.O.; Nokia Portugal S.A.; Nokia Private Joint Stock Company (Russia); Nokia Research Center; Nokia River Golf Ry; Nokia S.A. (Columbia); Nokia Servicios, S.A. de C.V. (Mexico); Nokia Technology GmbH (Germany); Nokianvirta Oy; Oy Scaninter Nokia Ltd.; Pointo Nokia Oy.
Principal Competitors
Telefonaktiebolaget LM Ericsson; Motorola, Inc.; Siemens AG; Sony Corporation.
Further Reading
Angell, Mike, "Nokia Banking on New Phone Features, Cameras, E-Mail Access," Investor's Business Daily, December 3, 2002, p. A7.
Baker, Stephen, and Kerry Capell, "The Race to Rule Mobile," Business Week, February 21, 2000, pp. 58-60.
Baker, Stephen, Roger O. Crockett, and Neil Gross, "Nokia: Can CEO Ollila Keep the Cellular Superstar Flying High?," Business Week, August 10, 1998, pp. 54-60.
"Bellaby, Mara D., "Nokia Acquires Intellisynch," America's Intelligence Wire, November 17, 2005.
Bensinger, Ari, "The Call on Nokia," Business Week Online, January 7, 2003.
Berkman, Barbara N., "Brainstorming in the Sauna," Electronic Business, November 18, 1991, pp. 71-74.
------, "Sagging Profits Spark Identity Crisis at Nokia," Electronic Business, March 4, 1991, pp. 57-59.
Burt, Tim, and Greg McIvor, "Land of Midnight Mobiles: A Former Toilet-Paper Maker from Finland Has Become the World's Largest Manufacturer of Mobile Phones," Financial Times, October 30, 1998, p. 18.
Edmondson, Gail, Peter Elstrom, and Peter Burrows, "At Nokia, a Comeback--and Then Some," Business Week, December 2, 1996, p. 106.
Fox, Justin, "Nokia's Secret Code," Fortune, May 1, 2000, pp. 161-64+.
Furchgott, Roy, "Nokia Signals Desire for Higher Profile," ADWEEK Eastern Edition, June 12, 1995, p. 2.
Guth, Robert A., "Nokia Fights for Toehold in Japan's Cell-Phone Market," Wall Street Journal, June 26, 2000, p. A26.
Heard, Joyce, and Keller, John J., "Nokia Skates into High Tech's Big Leagues," Business Week, April 4, 1988, pp. 102-03.
Jacob, Rahul, "Nokia Fumbles, But Don't Count It Out," Fortune, February 19, 1996, pp. 86-88.
Kharif, Olga, "Will New Phones Boost Nokia's Signal?," Business Week Online, December 11, 2002.
La Rossa, James, Jr., "Nokia Knocks on U.S. Door," HFD--The Weekly Home Furnishings Newspaper, February 10, 1992, pp. 66-67.
Lemola, Tarmo, and Raimo Lovio, Miksi Nokia, Finland, Porvoo, Sweden: W. Sööderströöm, 1996, 211 p.
Lineback, J. Robert, "Nokia's Mobile Phone Unit Is Ringing Bells," Electronic Business Buyer, June 1994, pp. 60-62.
Meeks, Fleming, "Watch Out, Motorola," Forbes, September 12, 1994, pp. 192-94.
"Nokia and CommTel Expand Broadband in the Pacific," PR Newswire, December 28, 2005.
"Nokia Expands Production in China," TelecomWeb News Digest, December 1, 2005.
"Nokia Launches New 3G Phones," eWeek, December 1, 2005.
"Not Finnished Yet," Economist, February 9, 1991, p. 73.
Perez, Bien, "Nokia Adapts to Swift Changes," South China Morning Post, November 29, 2005.
Reinhardt, Andy, "Cell Phones for the People," Business Week, November 7, 2005, p. 26.
------, "A Whole New Wireless Order," Business Week, October 31, 2005, p. MTL2.
Salameh, Asad, "Nokia Repositions for a Major Cellular Marketing Initiative," Telecommunications, June 1992, p. 43.
Schwartz, Nelson D., "The Man Behind Nokia's Comeback," Fortune, October 31, 2005, p. 39.
Seyfer, Jessie, "Nokia to Acquire Intellisync," San Jose Mercury News, November 17, 2005.
Silberg, Lurie, "A Brand Apart," HFD--The Weekly Home Furnishings Newspaper, September 5, 1994, pp. 54-55.
"These Sexy Gadgets Will Rock Next Year," Economic Times of India, December 20, 2005.
Williams, Elaine, "100-Year-Old Nokia Experiences Fast-Growth Pains," Electronic Business, June 26, 1989, pp. 111-14.
— Updated by April D. Gasbarre, David E. Salamie, Jeffrey L. Covell
The roots of this internationally renowned Finnish telecommunications company lay in a number of earlier companies, two of which were established in what became the town of Nokia. The first, established in 1865, manufactured paper and built up an international client base in Russia, Britain, France, and China. It was followed by the Finnish Rubber Works, founded in 1898, whose products were sold under the Nokia brand name in the 1920s. The third, the Finnish Cable Works, was established in 1912 and grew rapidly in tandem with the growth of electricity. All three companies were eventually merged in 1967 as the Nokia Group which, by the early 21st century, employed 24,000 in Finland alone.
Nokia's involvement with telecommunications commenced in the 1960s when, in the competitive national context, it began to invest in research and innovation. By the 1980s the company had emerged as a significant international player, being Europe's third largest television manufacturer as well as a major Scandinavian information technology company. In the recessionary years of the 1990s the company focused on its telecommunications and mobile phone divisions, a strategic aspect of corporate policy following the appointment of Jorma Ollila as chief executive in 1992. Nokia's television and cable interests were sold in 1995 and 1996. Innovation has played a key role in Nokia's success, building on its electronics expertise and the development of semiconductor technology in the 1960s. The company was also quick to move into digital (Pulse Code Modulation: PCM) transmission systems and, following the Swedish example, mobile networks for car phones. The Nordic countries collaborated in the establishment of a common mobile network, the Nordic Mobile Telephony (NMT) system in 1981, the world's first multinational cellular network. It was this breakthrough that facilitated the rapid expansion of the mobile telephone. Nokia remained at the forefront of such developments and, in 1991, the company supplied the standardized Global System for Mobile Communications (GSM) to nine other European countries, expanding globally over ensuing years.
A key figure in the company's design thinking was chief designer and vice-president Frank Nuovo, who joined the company in the 1990s. His design projects have included the Nokia 232, 2110, 2120, 3110, 6110, 8810, 7110, and 9110 mobile phones. The design of Nokia products proved attractive to consumers, with a premium on functions, size, and aesthetics. Many industry standard features such as large graphic displays, personalized ring tones, and coloured covers were pioneered by the company, the headquarters of which were housed in a glass-panelled building designed by Finnish architect Pekka Helin and interior designer Iris Hulm, completed in 1997. Nokia first introduced its coloured covers for cellular phones in 1992, following up such thinking with richly patterned and textured casings. The idea of mobile phone as fashion accessory was taken to greater extremes with the launch of new ranges of coloured covers for the Nokia 8210 fashion phone at the Nokia Design Gala during Paris Fashion Week in 2000, a corporate involvement initiated in 1999. The phone covers were shown in the context of wearable fashion accessories designed by Nokia Young Designers. Like many other successful companies involved in the manufacture of ‘lifestyle’ products, Nokia sought a variety of ways to endow its products with cultural resonance. In 1998, for example, the company had launched the Nokia 252 Art Edition mobile phone for exclusive sales in the Museum Shop of the Solomon R. Guggenheim Museum. By the early 21st century Nokia had become the world's leading supplier of mobile phones and telephone networks and was listed on the Frankfurt, Helsinki, London, New York, Paris, and Stockholm stock exhanges with a global turnover of almost 20 billion euros.
In currencies, this is the abbreviation for the Norwegian Krone.
Investopedia Says:
The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion.
| Type | Public company |
|---|---|
| Traded as | OMX: NOK1V, NYSE: NOK, FWB: NOA3 |
| Industry | Telecommunications Internet Computer software |
| Founded | Tampere, Finland, Russian Empire (1865) incorporated in Nokia (1871) |
| Founder(s) | Fredrik Idestam Leo Mechelin |
| Headquarters | Espoo, Finland |
| Area served | Worldwide |
| Key people | Risto Siilasmaa (Chairman) Stephen Elop (President & CEO) |
| Products | Mobile phones Smartphones Mobile computers Networks (See products listing) |
| Services | Maps and navigation, music, messaging and media Software solutions (See services listing) |
| Revenue | |
| Operating income | |
| Net income | |
| Total assets | |
| Total equity | |
| Employees | 134,171 (2011)[1] |
| Divisions | Mobile Solutions Mobile Phones Markets |
| Subsidiaries | Nokia Siemens Networks Navteq Symbian Vertu Qt Development Frameworks |
| Website | Nokia.com |
Nokia Corporation (Finnish pronunciation: [ˈnɔkiɑ]) (OMX: NOK1V, NYSE: NOK, FWB: NOA3) is a multinational communications corporation headquartered in Keilaniemi, Espoo, a city neighbouring Helsinki.[2] Its principal products are mobile electronic devices, primarily mobile telephones and other communications devices. It also offers Internet services such as applications, games, music, maps, media and messaging through its Ovi platform, and free-of-charge digital map information and navigation services through its wholly owned subsidiary Navteq.[3] Nokia has a joint venture with Siemens, Nokia Siemens Networks, which provides telecommunications network equipment, solutions and services.[4]
Nokia has 130,000 employees across 120 countries, sales in more than 150 countries and annual revenues of around €38 billion.[1] As of 2012 it is the world's second-largest vendor of mobile phones (after Samsung), with a global market share of 22.5% in the first quarter.[5] Nokia is a public limited-liability company listed on the Helsinki, Frankfurt, and New York stock exchanges.[6] Since February 2011 Nokia has had a strategic partnership with Microsoft, as part of which all Nokia smartphones will incorporate Microsoft's Windows Phone operating system. On 26 October 2011 Nokia unveiled its first Windows Phone handsets, the WP7.5 Lumia 710 and 800.[7]
Nokia was the world's 143rd largest company as measured by revenue in Fortune Global 500 list of 2011.[8]
Recently it has faced major competition with the growing use of smartphones mainly from Apple Inc. with its iPhone and also Google Inc. with its Android phones. As a result it share price has fallen from a high of $40US in 2007 to under $3 in 2012.[9][10]
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Fredrik Idestam, founder of Nokia.
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Statesman Leo Mechelin, co-founder of Nokia.
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The predecessors of the modern Nokia were the Nokia Company (Nokia Aktiebolag), Finnish Rubber Works Ltd (Suomen Gummitehdas Oy) and Finnish Cable Works Ltd (Suomen Kaapelitehdas Oy).[11]
Nokia's history started in 1865 when mining engineer Fredrik Idestam established a groundwood pulp mill on the banks of the Tammerkoski rapids in the town of Tampere, in southwestern Finland in Russian Empire and started manufacturing paper.[12] In 1868, Idestam built a second mill near the town of Nokia, fifteen kilometres (nine miles) west of Tampere by the Nokianvirta river, which had better resources for hydropower production.[13] In 1871, Idestam, with the help of his close friend statesman Leo Mechelin, renamed and transformed his firm into a share company, thereby founding the Nokia Company, the name it is still known by today.[13]
Toward the end of the 19th century, Mechelin's wishes to expand into the electricity business were at first thwarted by Idestam's opposition. However, Idestam's retirement from the management of the company in 1896 allowed Mechelin to become the company's chairman (from 1898 until 1914) and sell most shareholders on his plans, thus realizing his vision.[13] In 1902, Nokia added electricity generation to its business activities.[12]
In 1898, Eduard Polón founded Finnish Rubber Works, manufacturer of galoshes and other rubber products, which later became Nokia's rubber business.[11] At the beginning of the 20th century, Finnish Rubber Works established its factories near the town of Nokia and they began using Nokia as its product brand.[14] In 1912, Arvid Wickström founded Finnish Cable Works, producer of telephone, telegraph and electrical cables and the foundation of Nokia's cable and electronics businesses.[11] At the end of the 1910s, shortly after World War I, the Nokia Company was nearing bankruptcy.[15] To ensure the continuation of electricity supply from Nokia's generators, Finnish Rubber Works acquired the business of the insolvent company.[15] In 1922, Finnish Rubber Works acquired Finnish Cable Works.[16] In 1937, Verner Weckman, a sport wrestler and Finland's first Olympic Gold medalist, became President of Finnish Cable Works, after 16 years as its Technical Director.[17] After World War II, Finnish Cable Works supplied cables to the Soviet Union as part of Finland's war reparations. This gave the company a good foothold for later trade.[17]
The three companies, which had been jointly owned since 1922, were merged to form a new industrial conglomerate, Nokia Corporation in 1967 and paved the way for Nokia's future as a global corporation.[18] The new company was involved in many industries, producing at one time or another paper products, car and bicycle tires, footwear (including rubber boots), communications cables, televisions and other consumer electronics, personal computers, electricity generation machinery, robotics, capacitors, military communications and equipment (such as the SANLA M/90 device and the M61 gas mask for the Finnish Army), plastics, aluminium and chemicals.[19] Each business unit had its own director who reported to the first Nokia Corporation President, Björn Westerlund. As the president of the Finnish Cable Works, he had been responsible for setting up the company's first electronics department in 1960, sowing the seeds of Nokia's future in telecommunications.[20]
Eventually, the company decided to leave consumer electronics behind in the 1990s and focused solely on the fastest growing segments in telecommunications.[21] Nokian Tyres, manufacturer of tires, split from Nokia Corporation to form its own company in 1988[22] and two years later Nokian Footwear, manufacturer of rubber boots, was founded.[14] During the rest of the 1990s, Nokia divested itself of all of its non-telecommunications businesses.[21]
The seeds of the current incarnation of Nokia were planted with the founding of the electronics section of the cable division in 1960 and the production of its first electronic device in 1962: a pulse analyzer designed for use in nuclear power plants.[20] In the 1967 fusion, that section was separated into its own division, and began manufacturing telecommunications equipment. A key CEO and subsequent Chairman of the Board was vuorineuvos Björn "Nalle" Westerlund (1912–2009), who founded the electronics department and let it run at a loss for 15 years.
In the 1970s, Nokia became more involved in the telecommunications industry by developing the Nokia DX 200, a digital switch for telephone exchanges. The DX 200 became the workhorse of the network equipment division. Its modular and flexible architecture enabled it to be developed into various switching products.[23] In 1984, development of a version of the exchange for the Nordic Mobile Telephony network was started.[24]
For a while in the 1970s, Nokia's network equipment production was separated into Telefenno, a company jointly owned by the parent corporation and by a company owned by the Finnish state. In 1987, the state sold its shares to Nokia and in 1992 the name was changed to Nokia Telecommunications.
In the 1970s and 1980s, Nokia developed the Sanomalaitejärjestelmä ("Message device system"), a digital, portable and encrypted text-based communications device for the Finnish Defence Forces.[25] The current main unit used by the Defence Forces is the Sanomalaite M/90 (SANLA M/90).[26]
The technologies that preceded modern cellular mobile telephony systems were the various "0G" pre-cellular mobile radio telephony standards. Nokia had been producing commercial and some military mobile radio communications technology since the 1960s, although this part of the company was sold some time before the later company rationalization. Since 1964, Nokia had developed VHF radio simultaneously with Salora Oy. In 1966, Nokia and Salora started developing the ARP standard (which stands for Autoradiopuhelin, or car radio phone in English), a car-based mobile radio telephony system and the first commercially operated public mobile phone network in Finland. It went online in 1971 and offered 100% coverage in 1978.[29]
In 1979, the merger of Nokia and Salora resulted in the establishment of Mobira Oy. Mobira began developing mobile phones for the NMT (Nordic Mobile Telephony) network standard, the first-generation, first fully automatic cellular phone system that went online in 1981.[30] In 1982, Mobira introduced its first car phone, the Mobira Senator for NMT-450 networks.[30]
Nokia bought Salora Oy in 1984 and now owning 100% of the company, changed the company's telecommunications branch name to Nokia-Mobira Oy. The Mobira Talkman, launched in 1984, was one of the world's first transportable phones. In 1987, Nokia introduced one of the world's first handheld phones, the Mobira Cityman 900 for NMT-900 networks (which, compared to NMT-450, offered a better signal, yet a shorter roam). While the Mobira Senator of 1982 had weighed 9.8 kg (22 lb) and the Talkman just under 5 kg (11 lb), the Mobira Cityman weighed only 800 g (28 oz) with the battery and had a price tag of 24,000 Finnish marks (approximately €4,560).[28] Despite the high price, the first phones were almost snatched from the sales assistants' hands. Initially, the mobile phone was a "yuppie" product and a status symbol.[19]
Nokia's mobile phones got a big publicity boost in 1987, when Soviet leader Mikhail Gorbachev was pictured using a Mobira Cityman to make a call from Helsinki to his communications minister in Moscow. This led to the phone's nickname of the "Gorba".[28]
In 1988, Jorma Nieminen, resigning from the post of CEO of the mobile phone unit, along with two other employees from the unit, started a notable mobile phone company of their own, Benefon Oy (since renamed to GeoSentric).[31] One year later, Nokia-Mobira Oy became Nokia Mobile Phones.
Nokia was one of the key developers of GSM (Global System for Mobile Communications),[32] the second-generation mobile technology which could carry data as well as voice traffic. NMT (Nordic Mobile Telephony), the world's first mobile telephony standard that enabled international roaming, provided valuable experience for Nokia for its close participation in developing GSM, which was adopted in 1987 as the new European standard for digital mobile technology.[33][34]
Nokia delivered its first GSM network to the Finnish operator Radiolinja in 1989.[35] The world's first commercial GSM call was made on 1 July 1991 in Helsinki, Finland over a Nokia-supplied network, by then Prime Minister of Finland Harri Holkeri, using a prototype Nokia GSM phone.[35] In 1992, the first GSM phone, the Nokia 1011, was launched.[35][36] The model number refers to its launch date, 10 November.[36] The Nokia 1011 did not yet employ Nokia's characteristic ringtone, the Nokia tune. It was introduced as a ringtone in 1994 with the Nokia 2100 series.[37]
GSM's high-quality voice calls, easy international roaming and support for new services like text messaging (SMS) laid the foundations for a worldwide boom in mobile phone use.[35] GSM came to dominate the world of mobile telephony in the 1990s, in mid-2008 accounting for about three billion mobile telephone subscribers in the world, with more than 700 mobile operators across 218 countries and territories. New connections are added at the rate of 15 per second, or 1.3 million per day.[38]
In the 1980s, Nokia's computer division Nokia Data produced a series of personal computers called MikroMikko.[39] MikroMikko was Nokia Data's attempt to enter the business computer market. The first model in the line, MikroMikko 1, was released on 29 September 1981,[40] around the same time as the first IBM PC. However, the personal computer division was sold to the British ICL (International Computers Limited) in 1991, which later became part of Fujitsu.[41] MikroMikko remained a trademark of ICL and later Fujitsu. Internationally the MikroMikko line was marketed by Fujitsu as the ErgoPro.
Fujitsu later transferred its personal computer operations to Fujitsu Siemens Computers, which shut down its only factory in Espoo, Finland (in the Kilo district, where computers had been produced since the 1960s) at the end of March 2000,[42][43] thus ending large-scale PC manufacturing in the country. Nokia was also known for producing very high quality CRT and early TFT LCD displays for PC and larger systems application. The Nokia Display Products' branded business was sold to ViewSonic in 2000.[44] In addition to personal computers and displays, Nokia used to manufacture DSL modems and digital set-top boxes.
Nokia re-entered the PC market in August 2009 with the introduction of the Nokia Booklet 3G mini laptop.[45]
In the 1980s, during the era of its CEO Kari Kairamo, Nokia expanded into new fields, mostly by acquisitions. In the late 1980s and early 1990s, the corporation ran into serious financial problems, a major reason being its heavy losses by the television manufacturing division and businesses that were just too diverse.[46] These problems, and a suspected total burnout, probably contributed to Kairamo taking his own life in 1988. After Kairamo's death, Simo Vuorilehto became Nokia's Chairman and CEO. In 1990–1993, Finland underwent severe economic depression,[47] which also struck Nokia. Under Vuorilehto's management, Nokia was severely overhauled. The company responded by streamlining its telecommunications divisions, and by divesting itself of the television and PC divisions.[48]
Probably the most important strategic change in Nokia's history was made in 1992, however, when the new CEO Jorma Ollila made a crucial strategic decision to concentrate solely on telecommunications.[21] Thus, during the rest of the 1990s, the rubber, cable and consumer electronics divisions were gradually sold as Nokia continued to divest itself of all of its non-telecommunications businesses.[21]
As late as 1991, more than a quarter of Nokia's turnover still came from sales in Finland. However, after the strategic change of 1992, Nokia saw a huge increase in sales to North America, South America and Asia.[49] The exploding worldwide popularity of mobile telephones, beyond even Nokia's most optimistic predictions, caused a logistics crisis in the mid-1990s.[50] This prompted Nokia to overhaul its entire logistics operation.[51] By 1998, Nokia's focus on telecommunications and its early investment in GSM technologies had made the company the world's largest mobile phone manufacturer,[49] a position it would hold for the next 14 consecutive years until 2012. Between 1996 and 2001, Nokia's turnover increased almost fivefold from 6.5 billion euros to 31 billion euros.[49] Logistics continues to be one of Nokia's major advantages over its rivals, along with greater economies of scale.[52][53]
Nokia launched its Nokia 1100 handset in 2003,[27] with over 200 million units shipped, was the best-selling mobile phone of all time and the world's top-selling consumer electronics product.[54] In May 2007, Nokia released its first touch screen phone, the Nokia 7710, which was also a huge success. In November 2007, Nokia announced and released the Nokia N82, its first Nseries phone with Xenon flash. At the Nokia World conference in December 2007, Nokia announced their "Comes With Music" program: Nokia device buyers are to receive a year of complimentary access to music downloads.[55] The service became commercially available in the second half of 2008.
Nokia Productions was the first ever mobile filmmaking project directed by Spike Lee. Work began in April 2008, and the film premiered in October 2008.[56]
In 2008, Nokia released the Nokia E71 which was marketed to directly compete with the other BlackBerry-type devices offering a full "qwerty" keyboard and cheaper prices. Nokia announced in August 2009 that they will be selling a high-end Windows-based mini laptop called the Nokia Booklet 3G.[45] On 2 September 2009, Nokia launched two new music and social networking phones, the X6 and X3.[57] The Nokia X6 features 32GB of on-board memory with a 3.2" finger touch interface and comes with a music playback time of 35 hours. The Nokia X3 is a first series 40 Ovi Store-enabled device. The X3 is a music device that comes with stereo speakers, built-in FM radio, and a 3.2 megapixel camera. On 10 September 2009, Nokia unveiled the 7705 Twist, a phone sporting a square shape that swivels open to reveal a full QWERTY keypad, featuring a 3 megapixel camera, web browsing, voice commands and weighting around 3.44 ounces (98 g).[58]
Nokia opened its Komárom, Hungary mobile phone factory on 5 May 2000.[59]
In March 2007, Nokia signed a memorandum with Cluj County Council, Romania to open a new plant near the city in Jucu commune.[60][61][62] Moving the production from the Bochum, Germany factory to a low wage country created an uproar in Germany.[63][64] Nokia recently moved its North American Headquarters to Sunnyvale.
In April 2003, the troubles of the networks equipment division caused the corporation to resort to similar streamlining practices on that side, including layoffs and organizational restructuring.[65] This diminished Nokia's public image in Finland,[66][67] and produced a number of court cases and an episode of a documentary television show critical of Nokia.[68]
On February 2006, Nokia and Sanyo announced a memorandum of understanding to create a joint venture addressing the CDMA handset business. But in June, they announced ending negotiations without agreement. Nokia also stated its decision to pull out of CDMA research and development, to continue CDMA business in selected markets.[69][70][71]
In June 2006, Jorma Ollila left his position as CEO to become the chairman of Royal Dutch Shell[72] and to give way for Olli-Pekka Kallasvuo.[73][74]
In May 2008, Nokia announced on their annual stockholder meeting that they want to shift to the Internet business as a whole. Nokia no longer wants to be seen as the telephone company. Google, Apple and Microsoft are not seen as natural competition for their new image but they are considered as major important players to deal with.[75]
In November 2008, Nokia announced it was ceasing mobile phone distribution in Japan.[76] Following early December, distribution of Nokia E71 is cancelled, both from NTT docomo and SoftBank Mobile. Nokia Japan retains global research & development programs, sourcing business, and an MVNO venture of Vertu luxury phones, using docomo's telecommunications network.
In February 2012, Nokia anonunced it was laying off 4000 employees to move manufacturing from Europe and Mexico to Asia.[77]
In March 2012, Nokia anonunced it was laying off 1000 employess from its Salo, Finland factory to focus on software.[78]
On 22 September 2003, Nokia acquired Sega.com, a branch of Sega which became the major basis to develop the Nokia N-Gage device.[79]
On 16 November 2005, Nokia and Intellisync Corporation, a provider of data and PIM synchronization software, signed a definitive agreement for Nokia to acquire Intellisync.[80] Nokia completed the acquisition on 10 February 2006.[81]
On 19 June 2006, Nokia and Siemens AG announced the companies would merge their mobile and fixed-line phone network equipment businesses to create one of the world's largest network firms, Nokia Siemens Networks.[82] Each company has a 50% stake in the infrastructure company, and it is headquartered in Espoo, Finland. The companies predicted annual sales of €16 bn and cost savings of €1.5 bn a year by 2010. About 20,000 Nokia employees were transferred to this new company.
On 8 August 2006, Nokia and Loudeye Corp. announced that they had signed an agreement for Nokia to acquire online music distributor Loudeye Corporation for approximately US $60 million.[83] The company has been developing this into an online music service in the hope of using it to generate handset sales. The service, launched on 29 August 2007, is aimed to rival iTunes. Nokia completed the acquisition on 16 October 2006.[84]
In July 2007, Nokia acquired all assets of Twango, the comprehensive media sharing solution for organizing and sharing photos, videos and other personal media.[85][86]
In September 2007, Nokia announced its intention to acquire Enpocket, a supplier of mobile advertising technology and services.[87]
In October 2007, pending shareholder and regulatory approval, Nokia bought Navteq, a U.S.-based supplier of digital mapping data, for a price of $8.1 billion.[3][88] Nokia finalized the acquisition on 10 July 2008.[89]
In September, 2008, Nokia acquired OZ Communications, a privately held company with approximately 220 employees headquartered in Montreal, Canada.[90]
On 24 July 2009, Nokia announced that it will acquire certain assets of cellity, a privately owned mobile software company which employs 14 people in Hamburg, Germany.[91] The acquisition of cellity was completed on 5 August 2009.[92]
On 11 September 2009, Nokia announced the acquisition of "certain assets of Plum Ventures, Inc, a privately held company which employed approximately 10 people with main offices in Boston, Massachusetts. Plum will complement Nokia's Social Location services".[93]
On 28 March 2010, Nokia announced the acquisition of Novarra, the mobile web browser firm from Chicago. Terms of the deal were not disclosed.Novarra is a privately held company based in Chicago, IL and provider of a mobile browser and service platform and has more than 100 employees.[94]
On 10 April 2010, Nokia announced its acquisition of MetaCarta, whose technology was planned to be used in the area of local search, particularly involving location and other services. Financial details of acquisition were not disclosed.[95]
Amid falling sales, Nokia posted a loss of 368 million euros for Q2 2011, while in Q2 2010 had still a profit of 227 million euros. On September 2011, Nokia has announced it will lose another 3,500 jobs worldwide, including the closure of its Cluj factory in Romania.[96]
On 8 February 2012 Nokia Corp. said to cut around 4,000 jobs at smartphone manufacturing plants in Europe by the end of 2012 to move assembly closer to component supplier in Asia. It plans to cut 2,300 of the 4,400 jobs in Hungary, 700 out of 1,000 jobs in Mexico, and 1,000 out of 1,700 factory jobs in Finland.[97]
Originally Nokia phones had a custom Nokia OS operating system developed specifically for Nokia mobile phones.
The first Nseries device, the N90, utilised the older Symbian OS 8.1 mobile operating system, as did the N70. Subsequently Nokia switched to using SymbianOS 9 for all later Nseries devices (except the N72, which was based on the N70). Newer Nseries devices incorporate newer revisions of SymbianOS 9 that include Feature Packs. The N800, N810, N900, N9 and N950 are as of April 2012 the only Nseries devices (therefore excluding Lumia devices) to not use Symbian OS. They use the Linux-based Maemo.[98]
Nokia stated that Maemo would be developed alongside Symbian. Maemo had since (Maemo "6" and beyond) merged with Intel's Moblin, and became MeeGo. MeeGo was later canceled and a development is now continued under name Tizen.
The Nokia N8 is the first device to function on the Symbian^3 mobile operating system.
Nokia revealed that the N8 will be the last device in its flagship N-series devices to ship with Symbian OS.[99][100]
Instead, Nokia will use Microsoft Windows Phone for its high-end flagship Lumia devices, and revealed the Nokia N9 will function on the MeeGo mobile operating system.
On 11 February 2011, Nokia's CEO Stephen Elop, a former Microsoft employee, unveiled a new strategic alliance with Microsoft, and announced it would replace Symbian and MeeGo with Microsoft's Windows Phone operating system[101][102] except for mid-to-low-end devices, which would continue to run under Symbian. Nokia was also to invest into the Series 40 platform and release a single MeeGo product in 2011.[103]
These news was not well received by consumers, and has contributed to the decline in the stock price by 11%.[1]
As part of the restructuring plan, Nokia planned to reduce spending on research and development, instead customising and enhancing the software line for Windows Phone 7.[104] Nokia's "applications and content store" (Ovi) becomes integrated into the Windows Phone Marketplace, and Nokia Maps is at the heart of Microsoft's Bing and AdCenter. Microsoft provides developer tools to Nokia to replace the Qt framework, which is not supported by Windows Phone 7 devices.[105]
Symbian becomes described as a "franchise platform" with Nokia planning to sell 150 million Symbian devices after the alliance was set up. MeeGo emphasis is on longer-term exploration, with plans to ship "a MeeGo-related product" later in 2012. Microsoft's search engine, Bing becomes the search engine for all Nokia phones. Nokia also gets some level of customisation on WP7.[106]
After this announcement, Nokia's share price fell about 14%, its biggest drop since July 2009.[107]
As Nokia was the largest mobile phone manufacturer worldwide at the time,[108] it was suggested the alliance would make Microsoft's Windows Phone 7 a stronger contender against Android and iOS.[105] In June 2011 Nokia was overtaken by Apple as the world's biggest smartphone maker by volume.[109] In August 2011 Chris Weber, head of Nokia's subsidiary in the U.S., stated "The reality is if we are not successful with Windows Phone, it doesn't matter what we do (elsewhere)." He further added "North America is a priority for Nokia (...) because it is a key market for Microsoft."[110]
European carriers have stated that Nokia Windows phones are not good enough to compete with Apple iPhone or Samsung Galaxy phones, that "they are overpriced for what is not an innovative product" and that "No one comes into the store and asks for a Windows phone".[111]
Since 1 July 2010, Nokia comprises three business groups: Mobile Solutions, Mobile Phones and Markets.[112] The three units receive operational support from the Corporate Development Office, led by Kai Öistämö, which is also responsible for exploring corporate strategic and future growth opportunities.[112]
On 1 April 2007, Nokia's Networks business group was combined with Siemens's carrier-related operations for fixed and mobile networks to form Nokia Siemens Networks, jointly owned by Nokia and Siemens and consolidated by Nokia.[113]
Mobile Solutions is responsible for Nokia's portfolio of smartphones and mobile computers, including the more expensive multimedia and enterprise-class devices. The team is also responsible for a suite of internet services under the Ovi brand, with a strong focus on maps and navigation, music, messaging and media.[112] This unit is led by Anssi Vanjoki, along with Tero Ojanperä (for Services) and Alberto Torres (for MeeGo Computers).[112]
Alberto Torres has stepped down.
Mobile Phones is responsible for Nokia's portfolio of affordable mobile phones, as well as a range of services that people can access with them, headed by Mary T. McDowell.[112] This unit provides the general public with mobile voice and data products across a range of devices, including high-volume, consumer oriented mobile phones. The devices are based on GSM/EDGE, 3G/W-CDMA and CDMA cellular technologies.
At the end of the year 2007, Nokia managed to sell almost 440 million mobile phones which accounted for 40% of all global mobile phones sales.[114] In 2011, Nokia's market share in the mobile phone market had dropped to 27% (417 million phones).[115]
Anssi Vanjoki resigned a few days before Nokia World 2010 and under new leadership team Jo Harlow will look into the affairs of Smartphones portfolio.
On 27 April 2011, The Register reported that Nokia is secretly developing a new operating system called Meltemi aiming at the low-end market. It is believed it will be replacing the S30 and S40 operating systems. Due to low-end market customers' demand of having smartphone features in their feature phone, the OS will include some features exclusive to high-end smartphones.
Markets is responsible for Nokia's supply chains, sales channels, brand and marketing functions of the company, and is responsible for delivering mobile solutions and mobile phones to the market. The unit is headed by Niklas Savander.[112]
Nokia has several subsidiaries, of which the two most significant as of 2009 are Nokia Siemens Networks and Navteq.[112] Other notable subsidiaries include, but are not limited to Vertu, a British-based manufacturer and retailer of luxury mobile phones; Qt Software, a Norwegian-based software company, and OZ Communications, a consumer e-mail and instant messaging provider.
Until 2008 Nokia was the major shareholder in Symbian Limited, a software development and licensing company that produced Symbian OS, a smartphone operating system used by Nokia and other manufacturers. In 2008 Nokia acquired Symbian Ltd and, along with a number of other companies, created the Symbian Foundation to distribute the Symbian platform royalty free and as open source.
Nokia Siemens Networks (previously Nokia Networks) provides wireless and fixed network infrastructure, communications and networks service platforms, as well as professional services to operators and service providers.[112] Nokia Siemens Networks focuses in GSM, EDGE, 3G/W-CDMA and WiMAX radio access networks; core networks with increasing IP and multiaccess capabilities; and services.
On 19 June 2006 Nokia and Siemens AG announced the companies are to merge their mobile and fixed-line phone network equipment businesses to create one of the world's largest network firms, called Nokia Siemens Networks.[82] The Nokia Siemens Networks brand identity was subsequently launched at the 3GSM World Congress in Barcelona in February 2007.[116][117]
As of March 2009, Nokia Siemens Networks serves more than 600 operator customers in more than 150 countries, with over 1.5 billion people connected through its networks.[118]
On 22 August 2011 Nokia Siemens became embroiled in a scandal related to the use and abuse of surveillance systems delivered to the Bahrain government by one of its former business units, Nokia Siemens Intelligence Solutions (NSIS). The spy gear in Bahrain was sold by Siemens AG (SIE), and maintained by Nokia Siemens Networks and NSN's divested unit, Trovicor GmbH. The sale and maintenance contracts were also confirmed by Ben Roome, a Nokia Siemens spokesman based in Farnborough, England. The system was reportedly used as the investigative tool of choice to gather information about political dissidents—and silence them. Companies such as Nokia and Nokia Siemens are free to sell such equipment almost anywhere. For the most part, the U.S. and European countries lack export controls to deter the use of such systems for repression, as was the case in Bahrain were at least 30 people were killed during the 2011 uprising. Many Western nations actively support the export of these systems of repression, e.g. to countries that are home to some of the U.S. Navy's Fleet. Monitoring centers, as the systems are called, are sold around the world by Nokia Siemens and its competitors, such as Israel-based Nice Systems Ltd. (NICE), and Verint Systems Inc. (VRNT), headquartered in Melville, New York. They form the heart of so-called lawful interception surveillance systems. By the end of 2007, the Nokia Siemens Intelligence Solutions unit had more than 90 systems installed in 60 countries.[119] Besides Bahrain, several other Middle Eastern nations that cracked down on uprisings this year—including Egypt, Syria and Yemen—also purchased monitoring centers from the chain of businesses now known as Trovicor. Trovicor equipment plays a surveillance role in at least 12 Middle Eastern and North African nations. Trovicor's precursor, which started in 1993 as the voice- and data-recording unit of Siemens, in 2007 became part of Nokia Siemens Networks, the world's second biggest maker of wireless communications equipment. NSN, a 50-50 joint venture with Espoo, Finland-based Nokia Oyj (NOK1V), sold the unit, known as Intelligence Solutions, in March 2009. The new owners, Guernsey-based Perusa Partners Fund 1 LP, renamed the business Trovicor, coined from the Latin and Esperanto words for find and heart, according to the company's website. According to NSN the elevated risk of human rights abuses was a major reason for NSN's exiting the monitoring-center business. In Bahrain, officials routinely used the NSIS surveillance systems as a basis for the arrest and torture of political opponents; legally the monitoring technology is to be only used by order of legal authorities such as judges and prosecutors. According to local regulations, every Bahraini phone and Internet operator must provide the state with the ability to monitor communications. Phone companies also must track the location of phones within a 164-foot (50-meter) radius, the rules say. NSN and Trovicor's status as exclusive provider in Bahrain continued at least through 2009. That period of more than two years coincides with the dates of text messages used to interrogate scores of political detainees. Authorities used messages that dated as far back as the mid-2000s, even in recent interrogations.[120]
Navteq is a Chicago, Illinois-based provider of digital map data and location-based content and services for automotive navigation systems, mobile navigation devices, Internet-based mapping applications, and government and business solutions.[112] Navteq was acquired by Nokia on 1 October 2007.[3] Navteq's map data is part of the Nokia Maps online service where users can download maps, use voice-guided navigation and other context-aware web services.[112] Nokia Maps is part of the Ovi brand of Nokia's Internet based online services.
The control and management of Nokia is divided among the shareholders at a general meeting and the Nokia Leadership Team (left),[121] under the direction of the Board of Directors (right).[122] The Chairman and the rest of the Nokia Leadership Team members are appointed by the Board of Directors. Only the Chairman of the Nokia Leadership Team can belong to both, the Board of Directors and the Nokia Leadership Team. The Board of Directors' committees consist of the Audit Committee,[123] the Personnel Committee[124] and the Corporate Governance and Nomination Committee.[125][126]
The operations of the company are managed within the framework set by the Finnish Companies Act,[127] Nokia's Articles of Association[128] and Corporate Governance Guidelines,[129] and related Board of Directors adopted charters.
|
|
| Chief Executive Officers | Chairmen of the Board of Directors [130] | |||||
|---|---|---|---|---|---|---|
| Björn Westerlund | 1967–1977 | Lauri J. Kivekäs | 1967–1977 | Simo Vuorilehto | 1988–1990 | |
| Kari Kairamo | 1977–1988 | Björn Westerlund | 1977–1979 | Mika Tiivola | 1990–1992 | |
| Simo Vuorilehto | 1988–1992 | Mika Tiivola | 1979–1986 | Casimir Ehrnrooth | 1992–1999 | |
| Jorma Ollila | 1992–2006 | Kari Kairamo | 1986–1988 | Jorma Ollila | 1999–2012 | |
| Olli-Pekka Kallasvuo | 2006–2010 | |||||
In 2011 Nokia had 130,000 employees in 120 countries, sales in more than 150 countries, global annual revenue of over €38 billion, and operating loss of €1 billion.[1] It was the world's largest manufacturer of mobile phones in 2011, with global device market share of 23% in the second quarter.[108]
The Nokia Research Center, founded in 1986, is Nokia's industrial research unit consisting of about 500 researchers, engineers and scientists;[131][132] it has sites in seven countries: Finland, China, India, Kenya, Switzerland, the United Kingdom and the United States.[133] Besides its research centers, in 2001 Nokia founded (and owns) INdT – Nokia Institute of Technology, a R&D institute located in Brazil.[134] Nokia operates a total of 9 manufacturing facilities[6] located at Salo, Finland; Manaus, Brazil; Cluj, Romania; Beijing and Dongguan, China; Komárom, Hungary; Chennai, India; Reynosa, Mexico; and Masan, South Korea.[135][60] Nokia's factory in Cluj was seized by the Romanian government in November 2011 to prevent a sale of the assets, after Nokia had accumulated a tax liability of US$ 10 million.[136] Nokia's industrial design department is headquartered in Soho in London, UK with significant satellite offices in Helsinki, Finland and Calabasas, California in the US.
Nokia is a public limited-liability company listed on the Helsinki, Frankfurt, and New York stock exchanges.[6] Nokia plays a very large role in the economy of Finland].[137][138] It is an important employer in Finland and several small companies have grown into large ones as its partners and subcontractors.[139] In 2009 Nokia contributed 1.6% to Finland's GDP, and accounted for about 16% of Finland's exports in 2006.[140]
In February 2012 Nokia announced that it was cutting 4,000 factory jobs in Finland, Hungary and Mexico (more than half of the 7,100 jobs at the three factories affected) and moving smartphone assembly to existing facilities in South Korea and China[141].
Nokia, a public limited liability company, is the oldest company listed under the same name on the Helsinki Stock Exchange (since 1915).[19] Nokia's shares are also listed on the Frankfurt Stock Exchange (since 1988) and New York Stock Exchange (since 1994).[6][19]
In 1 June 2011 Nokia shares dropped to their lowest in more than 13 years. Nokia shares fell as much as 10 percent, extending their previous day's by 18 percent fall.[148]
For fiscal Q2 2011 ending in June 2011, Nokia reported a net loss of 492 million EUR, despite a 430 million EUR payment from Apple. Nokia cited decline in its mobile phone business as the primary cause of the loss.[149]
Nokia's official corporate culture manifesto, The Nokia Way, emphasises the speed and flexibility of decision-making in a flat, networked organization, although the corporation's size necessarily imposes a certain amount of bureaucracy.[150]
The official business language of Nokia is English. All documentation is written in English, and is used in official intra-company spoken communication and e-mail.
Until May 2007, the Nokia Values were Customer Satisfaction, Respect, Achievement, and Renewal. In May 2007, Nokia redefined its values after initiating a series of discussions worldwide as to what the new values of the company should be. Based on the employee suggestions, the new values were defined as: Engaging You, Achieving Together, Passion for Innovation and Very Human.[150]
Nokia was the first proponent of a Top Level Domain (TLD) specifically for the Mobile Web and, as a result, was instrumental in the launch of the .mobi domain name extension in September 2006 as an official backer.[151][152] Since then, Nokia has launched the largest mobile portal, Nokia.mobi, which receives over 100 million visits a month.[153] It followed that with the launch of a mobile Ad Service to cater to the growing demand for mobile advertisement.[154]
Ovi, announced on 29 August 2007, is the name for Nokia's "umbrella concept" Internet services.[155] Centered on Ovi.com, it is marketed as a "personal dashboard" where users can share photos with friends, download music, maps and games directly to their phones and access third-party services like Yahoo's Flickr photo site. It has some significance in that Nokia is moving deeper into the world of Internet services, where head-on competition with Microsoft, Google and Apple is inevitable.[156]
The services offered through Ovi include the Ovi Store (Nokia's application store), the Nokia Music Store, Nokia Maps, Ovi Mail, the N-Gage mobile gaming platform available for several S60 smartphones, Ovi Share, Ovi Files, and Contacts and Calendar.[157] The Ovi Store, the Ovi application store was launched in May 2009.[158] Prior to opening the Ovi Store, Nokia integrated its software Download! store, the stripped-down MOSH repository and the widget service WidSets into it.[159]
On 23 March 2010, Nokia announced launch of its online magazine called the Nokia Ovi. The 44-page magazine contains articles on products by Nokia, what Ovi stands for, tips and tricks on the usage of Nokia mini laptop Booklet 3G, latest reviews of mobile applications, news about the mobile maker's services and apps such as Ovi maps, files and mail. Users can download the magazine as a PDF or view it online from the Nokia website.[160]
Nokia offers a free personalised service to Nokia owners called My Nokia (located at my.nokia.com).[161] Registered My Nokia users can get free services as follows:
In 2007 Nokia set up their "Nokia Comes With Music" service, in partnership with Universal Music Group International, Sony BMG, Warner Music Group, EMI, and hundreds of Independent labels and music aggregators, to allow 12, 18, or 24 months of unlimited free-of-charge music downloads with the purchase of a Nokia Comes With Music edition phone. Files could be downloaded on mobile devices or personal computers, and kept permanently.[55]
In January 2011 Nokia withdrew this program in 27 countries, due to its failure to gain traction with customers or mobile network operators; existing subscribers could continue to download until their contracts ended. The service continued to be offered in China, India, Indonesia, Brazil, Turkey and South Africa where take-up had been better.[162]
On 13 August 2008 Nokia launched a beta release of "Nokia Email service", a push e-mail service, since incorporated into Nokia Messaging.[163]
Nokia Messaging operates as a centralised, hosted service that acts as a proxy between the Nokia Messaging client and the user's e-mail server. The phone does not connect directly to the e-mail server, but instead sends e-mail credentials to Nokia's servers.[164] IMAP is used as the protocol to transfer emails between the client and the server.
In 2008, Nokia Siemens Networks, a joint venture between Nokia and Siemens AG, reportedly provided Iran's monopoly telecom company with technology that allowed it to intercept the Internet communications of its citizens to an unprecedented degree.[165] The technology reportedly allowed it to use deep packet inspection to read and even change the content of everything from "e-mails and Internet phone calls to images and messages on social-networking sites such as Facebook and Twitter". The technology "enables authorities to not only block communication but to monitor it to gather information about individuals, as well as alter it for disinformation purposes," expert insiders told The Wall Street Journal. During the post-election protests in Iran in June 2009, Iran's Internet access was reported to have slowed to less than a tenth of its normal speeds, and experts suspected this was due to the use of the interception technology.[166]
The joint venture company, Nokia Siemens Networks, asserted in a press release that it provided Iran only with a 'lawful intercept capability' "solely for monitoring of local voice calls". "Nokia Siemens Networks has not provided any deep packet inspection, web censorship or Internet filtering capability to Iran," it said.[167]
In July 2009, Nokia began to experience a boycott of their products and services in Iran. The boycott was led by consumers sympathetic to the post-election protest movement and targeted at those companies deemed to be collaborating with the Islamic regime. Demand for handsets fell and users began shunning SMS messaging.[168]
In 2009, Nokia heavily supported the passing of a law in Finland that allows companies to monitor their employees' electronic communications in cases of suspected information leaking.[169] Contrary to rumors, Nokia denied that the company would have considered moving its head office out of Finland if laws on electronic surveillance were not changed.[170] The law was enacted, but with strict requirements for implementation of its provisions. As of 2010, the law has become a dead letter; no corporation has implemented it. The Finnish media dubbed the name Lex Nokia for this law, named after the Finnish copyright law (the so-called Lex Karpela) a few years back[citation needed].
In October 2009, Nokia filed a lawsuit against Apple Inc. in the U.S. District Court of Delaware citing Apple infringed on 10 of its patents related to wireless communication including data transfer.[171] Apple was quick to respond with a countersuit filed in December 2009 accusing Nokia of 11 patent infringements. Apple's General Counsel, Bruce Sewell went a step further by stating, "Other companies must compete with us by inventing their own technologies, not just by stealing ours." This resulted in an ugly spat between the two telecom majors with Nokia filing another suit, this time with the U.S. International Trade Commission (ITC), alleging Apple of infringing its patents in "virtually all of its mobile phones, portable music players, and computers."[172] Nokia went on to ask the court to bar all U.S. imports of the Apple products including the iPhone, Mac and the iPod. Apple countersued by filing a complaint with the ITC in January 2010, the details of which are yet to be confirmed.[171]
In June 2011, Apple settled with Nokia and agreed to an estimated one time payment of $600 million and royalties to Nokia.[173] The two companies also agreed on a cross-licensing patents for some of their patented technologies.[174][175]
Electronic products such as cell phones impact the environment both during production and after their useful life when they are discarded and turned into electronic waste. Nokia is listed in Greenpeace's Guide to Greener Electronics that scores leading electronics manufacturers according to their policies on sustainability, climate and energy and how green their products are. In November 2011 Nokia ranked 3rd out of 15 listed electronics companies, falling two places due to its weaker performance on the Energy criteria and scoring 4.9/10.[176]
All of Nokia's mobile phones are free of toxic polyvinyl chloride (PVC) since the end of 2005 and all new models of mobile phones and accessories launched in 2010 are on track to be free of brominated compounds, chlorinated flame retardants and antimony trioxide.[176]
Nokia's voluntary take-back programme to recycle old mobile phones spans 84 countries with almost 5,000 collection points.[177] However, the recycling rate of Nokia phones was only 3–5% in 2008, according to a global consumer survey released by Nokia.[178] The majority of old mobile phones are simply lying in drawers at home and very few old devices, about 4%, are being thrown into landfill and not recycled.[178]
All of Nokia's new models of chargers meet or exceed the Energy Star requirements.[179] Nokia aims to reduce its carbon dioxide emissions by at least 18 percent in 2010 from a baseline year of 2006 and cover 50 percent of its energy needs through renewable energy sources.[180] Greenpeace is challenging the company to use its influence at the political level as number 85 on the Fortune 500 to advocate for climate legislation and call for global greenhouse gas emissions to peak by 2015.[181]
Nokia is researching the use of recycled plastics in its products, which are currently used only in packaging but not yet in mobile phones.[182]
Since 2001, Nokia has provided eco declarations of all its products and since May 2010 provides Eco profiles for all its new products.[183] In an effort to further reduce their environmental impact in the future, Nokia released a new phone concept, Remade, in February 2008.[184] The phone has been constructed of solely recyclable materials.[184] The outer part of the phone is made from recycled materials such as aluminium cans, plastic bottles, and used car tires.[185] The screen is constructed of recycled glass, and the hinges have been created from rubber tires. The interior of the phone is entirely constructed with refurbished phone parts, and there is a feature that encourages energy saving habits by reducing the backlight to the ideal level, which then allows the battery to last longer without frequent charges.
Nokia is actively exploring and engaging in open innovation through selective research collaborations with major universities and institutions by sharing resources and leveraging ideas. Major research collaboration is with Tampere University of Technology based in Finland. Current collaborations include:[186]
The Brand Trust Report [187] published by Trust Research Advisory has ranked Nokia in the 1st position among the brands in India.
| Title | Author | Publisher | Year | Length | ISBN |
|---|---|---|---|---|---|
| Winning Across Global Markets: How Nokia Creates Strategic Advantage in a Fast-Changing World | Dan Steinbock | Jossey-Bass / Wiley | May 2010 | 304 pp | ISBN 978-0-470-33966-4 |
| Nokia: The Inside Story | Martti Häikiö | FT / Prentice Hall | October 2002 | 256 pp | ISBN 0-273-65983-9 |
| Work Goes Mobile: Nokia's Lessons from the Leading Edge | Michael Lattanzi, Antti Korhonen, Vishy Gopalakrishnan | John Wiley & Sons | January 2006 | 212 pp | ISBN 0-470-02752-5 |
| Mobile Usability: How Nokia Changed the Face of the Mobile Phone | Christian Lindholm, Turkka Keinonen, Harri Kiljander | McGraw-Hill Companies | June 2003 | 301 pp | ISBN 0-07-138514-2 |
| Business The Nokia Way: Secrets of the World's Fastest Moving Company | Trevor Merriden | John Wiley & Sons | February 2001 | 168 pp | ISBN 1-84112-104-5 |
| The Nokia Revolution: The Story of an Extraordinary Company That Transformed an Industry | Dan Steinbock | AMACOM Books | April 2001 | 375 pp | ISBN 0-8144-0636-X |
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