Nokia Corporation is a Finnish multinational communications corporation that is headquartered in Keilaniemi, Espoo, a city neighbouring Finland's capital Helsinki. Nokia is engaged in the manufacturing of mobile devices and in converging Internet and communications industries, with over 132,000 employees in 120 countries, sales in more than 150 countries and global annual revenue of over €42 billion and operating profit of €2 billion as of 2010. It is the world's largest manufacturer of mobile phones: its global device market share was 23% in the second quarter 2011. Nokia's estimated share of the converged mobile device market was 31% in the fourth quarter, compared with 38% in the third quarter 2010. Nokia produces mobile devices for every major market segment and protocol, including GSM, CDMA, and W-CDMA(UMTS). Nokia offers Internet services such as applications, games, music, maps, media and messaging through its Ovi platform. Nokia's joint venture withSiemens, Nokia Siemens Networks produces telecommunications network equipment, solutions and services. Nokia is also engaged in providing free digital map information and navigation services through its wholly owned subsidiary Navteq.
Nokia has sites for research and development, manufacture and sales in several countries; as of December 2010, Nokia had R&D presence in 16 countries and employed 35,870 people in research and development, representing approximately 27% of the group's total workforce. The Nokia Research Center, founded in 1986, is Nokia's industrial research unit consisting of about 500 researchers, engineers and scientists; it has sites in seven countries:Finland, China, India, Kenya, Switzerland, the United Kingdom and the United States. Besides its research centers, in 2001 Nokia founded (and owns)INdT – Nokia Institute of Technology, a R&D institute located in Brazil. Nokia operates a total of 9 manufacturing facilities located at Salo, Finland;Manaus, Brazil; Cluj, Romania; Beijing and Dongguan, China; Komárom, Hungary; Chennai, India; Reynosa, Mexico; and Masan, South Korea.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. 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. Nokia plays a very large role in the economy of Finland; it is by far the largest Finnish company, accounting for about a third of the market capitalization of the Helsinki Stock Exchange (OMX Helsinki) as of 2007, a unique situation for an industrialized country. It is an important employer in Finland and several small companies have grown into large ones as its partners and subcontractors. In 2009, Nokia contributed 1.6% to Finland's GDP, and accounted for about 16% of Finland's exports in 2006.
The Nokia brand, valued at $25 billion, is listed as the 14th most valuable global brand in the Interbrand/BusinessWeek Best Global Brands list of 2011.It is the 14th ranked brand corporation in Europe (as of 2011), the 8th most admirable Network and Other Communications Equipment company worldwide in Fortune's World's Most Admired Companies list of 2011 , and the world's 143th largest company as measured by revenue in Fortune Global 500 list of 2011. In July 2010, Nokia reported a drop in profits by 40%, which turned into an operating loss of EUR 487 million in Q2 2011. In the global smartphone rivalry, Nokia held the 3rd place in 2Q2011, trailing behind Samsung and Apple.
On 11 February 2011, Nokia announced a partnership with Microsoft where all future Nokia smartphones will be powered by the Windows Phone 7 (WP7)operating system. On 26 October 2011, Nokia unveiled its first WP7.5 powered handsets Lumia 710 and 800.
Pre-telecommunications era
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| Fredrik Idestam, founder of Nokia. |
opThe 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).
Nokia's history starts 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. 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. 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.
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. In 1902, Nokia added electricity generation to its business activities.
Industrial conglomerate
In 1898, Eduard Polón founded Finnish Rubber Works, manufacturer of galoshes and other rubber products, which later became Nokia's rubber business. 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. 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. At the end of the 1910s, shortly after World War I, the Nokia Company was nearing bankruptcy. To ensure the continuation of electricity supply from Nokia's generators, Finnish Rubber Works acquired the business of the insolvent company. In 1922, Finnish Rubber Works acquired Finnish Cable Works. 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. 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.
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. 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. 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.
Eventually, the company decided to leave consumer electronics behind in the 1990s and focused solely on the fastest growing segments in telecommunications. Nokian Tyres, manufacturer of tires, split from Nokia Corporation to form its own company in 1988 and two years later Nokian Footwear, manufacturer of rubber boots, was founded. During the rest of the 1990s, Nokia divested itself of all of its non-telecommunications businesses.
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. 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.Networking equipment
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. In 1984, development of a version of the exchange for the Nordic Mobile Telephony network was started.
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. The current main unit used by the Defence Forces is the Sanomalaite M/90 (SANLA M/90).
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 ARPstandard (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.
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. In 1982, Mobira introduced its first car phone, the Mobira Senator for NMT-450 networks.
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). Despite the high price, the first phones were almost snatched from the sales assistants’ hands. Initially, the mobile phone was a "yuppie" product and astatus symbol.
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".
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). One year later, Nokia-Mobira Oy became Nokia Mobile Phones.
Nokia was one of the key developers of GSM (Global System for Mobile Communications), 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.
Nokia delivered its first GSM network to the Finnish operator Radiolinja in 1989. The world's first commercial GSM call was made on July 1, 1991 in Helsinki, Finland over a Nokia-supplied network, by then Prime Minister of Finland Harri Holkeri, using a prototype Nokia GSM phone. In 1992, the first GSM phone, the Nokia 1011, was launched. The model number refers to its launch date, 10 November. 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.
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. 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.
Personal computers and IT equipment
In the 1980s, Nokia's computer division Nokia Data produced a series of personal computers called MikroMikko. MikroMikko was Nokia Data's attempt to enter the business computer market. The first model in the line, MikroMikko 1, was released on September 29, 1981,around the same time as the firstIBM PC. However, the personal computer division was sold to the British ICL (International Computers Limited) in 1991, which later became part of Fujitsu. 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 Kilodistrict, where computers had been produced since the 1960s) at the end of March 2000, 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. 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.
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. 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, 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.
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. 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.
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. The exploding worldwide popularity of mobile telephones, beyond even Nokia's most optimistic predictions, caused a logistics crisis in the mid-1990s. This prompted Nokia to overhaul its entire logistics operation. 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. Between 1996 and 2001, Nokia’s turnover increased almost fivefold from 6.5 billion euros to 31 billion euros. Logistics continues to be one of Nokia's major advantages over its rivals, along with greater economies of scale.
Recent history
Product releases
Nokia released its first touch screen phone, the Nokia 7710, which was a huge success. In May 2007, Nokia announced that its Nokia 1100 handset, launched in 2003, with over 200 million units shipped, was the best-selling mobile phone of all time and the world's top-selling consumer electronicsproduct. 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. 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.
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. On September 2, 2009, Nokia launched two new music and social networking phones, the X6 and X3. 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 September 10, 2009, Nokia unveiled a new handset, the 7705 Twist, a phone with a sports square shape that swivels open to reveal a full QWERTY keypad. The new mobile, which will be available exclusively through Verizon Wireless, features a 3 megapixel camera, web browsing, voice commands and weighs around 3.44 ounces (98 g).
Plant movements
Nokia opened its Komárom, Hungary mobile phone factory on May 5, 2000.
In March 2007, Nokia signed a memorandum with Cluj County Council, Romania to open a new plant near the city in Jucu commune. Moving the production from the Bochum, Germany factory to a low wage country created an uproar in Germany. Nokia recently moved its North American Headquarters to Sunnyvale.
Reorganizations
In April 2003, the troubles of the networks equipment division caused the corporation to resort to similar streamlining practices on that side, including layoffsand organizational restructuring. This diminished Nokia's public image in Finland, and produced a number of court cases and an episode of a documentary television show critical of Nokia.
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.
In June 2006, Jorma Ollila left his position as CEO to become the chairman of Royal Dutch Shell and to give way for Olli-Pekka Kallasvuo.
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.
In November 2008, Nokia announced it was ceasing mobile phone distribution in Japan. 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.
Acquisitions
On September 22, 2003, Nokia acquired Sega.com, a branch of Sega which became the major basis to develop the Nokia N-Gage device.
On November 16, 2005, Nokia and Intellisync Corporation, a provider of data and PIM synchronization software, signed a definitive agreement for Nokia to acquire Intellisync. Nokia completed the acquisition on February 10, 2006.
On June 19, 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. 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 August 8, 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. 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 August 29, 2007, is aimed to rival iTunes. Nokia completed the acquisition on October 16, 2006.
In July 2007, Nokia acquired all assets of Twango, the comprehensive media sharing solution for organizing and sharing photos, videos and other personal media.
In September 2007, Nokia announced its intention to acquire Enpocket, a supplier of mobile advertising technology and services.
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. Nokia finalized the acquisition on July 10, 2008.
In September, 2008, Nokia acquired OZ Communications, a privately held company with approximately 220 employees headquartered in Montreal, Canada.
On July 24, 2009, Nokia announced that it will acquire certain assets of cellity, a privately owned mobile software company which employs 14 people in Hamburg, Germany. The acquisition of cellity was completed on August 5, 2009.
On September 11, 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".
On March 28, 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.
On April 10, 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.
Curtailments
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.
Operating systems
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 and N900 are as of July 2010 the only Nseries devices to not use Symbian OS. They use the Linux-based Maemo.
Nokia stated that Maemo would be developed alongside Symbian.
Maemo has since (Maemo "6" and beyond) merged with Intel's Moblin, and become MeeGo, which will continue to be developed for mobile devices.
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.
Instead, Nokia will use Microsoft Windows Phone 7 for its high-end flagship devices, and revealed the Nokia N9 will function on the MeeGo mobile operating system.
Corporate Affairs
Corporate Affairs
Corporate structure
Since July 1, 2010, Nokia comprises three business groups: Mobile Solutions, Mobile Phones and Markets. 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.
On April 1, 2007, Nokia’s Networks business group was combined with Siemens’ carrier-related operations for fixed and mobile networks to form Nokia Siemens Networks, jointly owned by Nokia and Siemens and consolidated by Nokia.
Nokia, a public limited liability company, is the oldest company listed under the same name on the Helsinki Stock Exchange (since 1915). Nokia’s shares are also listed on the Frankfurt Stock Exchange (since 1988) and New York Stock Exchange (since 1994).
In June 1, 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.
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.
Corporate culture
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.
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.
Since July 1, 2010, Nokia comprises three business groups: Mobile Solutions, Mobile Phones and Markets. 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.
On April 1, 2007, Nokia’s Networks business group was combined with Siemens’ carrier-related operations for fixed and mobile networks to form Nokia Siemens Networks, jointly owned by Nokia and Siemens and consolidated by Nokia.
Nokia, a public limited liability company, is the oldest company listed under the same name on the Helsinki Stock Exchange (since 1915). Nokia’s shares are also listed on the Frankfurt Stock Exchange (since 1988) and New York Stock Exchange (since 1994).
In June 1, 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.
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.
Corporate culture
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.
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.
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