1970 to 1980
Key Strategy: Entering in a Different business domain Electronics and
telecommunication
The electronics section of the cable division was founded in 1960 and the
production of its first electronic devices began 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 Bjrn "Nalle" Westerlund (19122009), who founded
the electronics department and let it run at a loss for 15 years. In the late
1960s and early 1970s Westerlund encouraged researchers to work on their
own projects, which one top executive directly linked to the company's later
expertise in mobile communications technologies.
Network 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 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.
Pre-cellular systems
The technologies that preceded modern cellular mobile telephony systems
were the various 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.
In the 1970s and 1980s, Nokia developed the Sanomalaitejrjestelm
("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).
1980-90
Key Strategy: Technology Development - Nordic Mobile Telephone (1G
Network)
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 1G, Finland's, as wells as world's
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.
Key Strategy: Acquisitions to support technological advancement and
accelerate growth
Nokia bought Salora Oy in 1984 and 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 its first mobile phone, 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 7,200 in 2014 euros ). 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.
1990 onwards
Key Strategy: Inventions and innovations First mover in GSM (2G)
Nokia was a key developer of GSM (2G) (Global System for Mobile
Communications), the second-generation mobile technology that could carry
data as well as voice traffic. NMT (Nordic Mobile Telephony), the world's first
mobile telephony standard to allow international roaming, provided expertise
for Nokia in developing GSM, which was adopted in 1987 as the new
European standard for digital mobile technology.
Nokia delivered its first GSM network to Finnish operator Radiolinja in 1989.
The world's first commercial GSM call was made on July 1, 1991 in Helsinki,
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 Booklet 3G mini laptop
Key Strategy: Exploring market opportunities to diversify in electronics
market
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 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. 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, thus ending large-scale PC manufacturing in the country.
Nokia produced high quality CRT and early TFT LCD displays for PC and larger
systems applications. The Nokia Display Products' branded business was sold
to ViewSonic in 2000.
Challenges of growth
In the 1980s under 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, partly due to heavy losses in its
television manufacturing division. Kairamo committed suicide in 1988. After
Kairamo's death, Simo Vuorilehto became Nokia's chairman and CEO. In
19901993, Finland underwent a severe recession, 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. As late as 1991, more
than a quarter of Nokia's turnover came from sales in Finland. However, after
the strategic change of 1992, Nokia sales to North America, South America
and Asia became significant. The worldwide popularity of mobile telephones,
beyond even Nokia's most optimistic predictions, created a logistical crisis in
the mid-1990s, prompting Nokia to overhaul its entire supply chain. 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, a position it held until 2012. Between 1996 and 2001, Nokia's
turnover increased almost fivefold from 6.5 billion euros to 31 billion euros.
Logistics continued to be a major advantage over rivals, along with greater
economies of scale.
The company decided to exit consumer electronics in the 1990s and focused
solely on the fastest growing segments in telecommunications. Nokian Tyres,
manufacturer of tires, split from Nokia Corporation in 1988 and two years
later Nokian Footwear, manufacturer of rubber boots, was founded. In 1989,
Nokia also sold the original paper business; currently this company (Nokian
Paperi) is owned by SCA. During the rest of the 1990s, Nokia divested itself
of all other businesses.
2000
Nokia launched the GSM mobile phone Nokia 3310 on Sep1, 2000. It has
become one of the most popular devices of all time. The phone has gained
a Cult status due to its durability.
Key strategy: Customization, Market development
The phone sold extremely well, being one of the most successful
phones with 126 million units sold worldwide.
The Nokia 3310 can be customized with interchangeable XpressOn covers, and thousands of different designs have been produced by
various companies. It also has over 35 ringtones built in with space for
seven custom tones.
The phone has different "profiles" which can adjust the phone to
different sets of preferences, for example silent, vibration etc.
2003
The Nokia 1100 and The N-Gage (smartphone and handheld game system)
from Nokia launched in 2003
Key strategy: Market development, Product development
Nokia 1100 has shipped over 200 million units & is the best-selling
mobile phone of all time and the world's top-selling consumer
electronics product, and contributed to the company's rise in
developing markets
Nokia was one of the first to recognize the market opportunity in
combining a game console and a mobile phone (both of which many
gamers were carrying in 2003) into the N-Gage. The N-Gage was a
mobile phone and game console meant to lure gamers away from
the Game Boy Advance. The device however was a failure, and failed
to challenge dominant Nintendo.
2008
Nokia Productions was the first mobile movie-making project which was
directed by Spike Lee. Work began in April 2008, and the movie premiered in
October 2008
2009
Key strategy: Market penetration
In 2009, the company reentered the personal computing market,
announcing a high-end Windows-based netbook called the Nokia
Booklet 3G. The company also entered the smartphone market.
Vertical Integration
Nokia acquired Smarterphone, a company making the Smarterphone
OS for low end phones and merged it with Series 40 to form the Asha
Platform, which also inherits some UI characteristics from
Nokia's MeeGo platform. The Asha 501 was the first phone running the
new OS.
Technological Breakthrough
Due to competition the Symbian platform that Nokia were using was
quickly becoming outdated and difficult for developers after the advent
of iPhone OS and Android. To counter this, Nokia started to develop a
successor, MeeGo, in 2010. Although the MeeGo-based N9 was met
with a highly positive reception in 2011, Nokia decided not to continue
the MeeGo project and solely focus on its Microsoft partnership.
Strategies to counter External Environment
Mar
2007:
Nokia
signed
a
memorandum
with Cluj
County Council, Romania to
open
a
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
2008: Nokia exited mobile phone distribution in Japan.
Feb 2012: Nokia announced 4,000 lay-offs to move manufacturing
from Europe and Mexico to Asia, it also laid off 1,000 employees from
its Salo, Finland factory to focus on software.
June 2012: Research facilities in Ulm, Germany and Burnaby, Canada
closed, costing more jobs.
Jan 2013: Nokia terminated 1,000 employees from its IT, production
and logistics divisions
The company planned to transfer about 715 jobs to subcontractors
Acquisition
Sep 2003, Nokia acquired Sega.com, a branch of Sega to develop the
Nokia N-Gage device.
Nov 2005, Nokia agreed to acquire Intellisync Corporation, a provider
of data and PIM synchronization software.
June 2006, Nokia and Siemens AG announced the companies would
merge their mobile and fixed-line phone network equipment
businesses, creating Nokia Siemens Networks.
Aug 2006, Nokia agreed to acquire online music distributor Loudeye
Corporation for approximately US $60 million.
July 2007, Nokia acquired the media sharing service Twango.
Sept 2007, Nokia agreed to acquire Enpocket, a supplier of mobile
advertising technology and services.
2007, Nokia agreed to acquire Navteq, a U.S.-based supplier of digital
mapping data, for $8.1 billion.
Sep 2008, Nokia acquired OZ Communications, a privately held
company with approximately 220 employees headquartered in
Montreal, Canada.
July, 2009, Nokia agreed to acquire certain assets of Cellity, a privately
owned mobile software company.
Sep 2009, Nokia acquired certain assets of Plum Ventures, Inc. to
complement Nokia's Social Location services.
Mar 2010, Nokia acquired Novarra, a mobile web browser firm.
In 2012, Nokia acquired Smarterphone, a developer of an operating
system for feature phones, and the imaging company Scalado.
2010-2013
In 2010, pressure on Nokia increased dramatically as Android and iOS
continued to make gains. Other Symbian OEMs including Samsung
Electronics and Sony Ericsson chose to make Android-based smartphones
instead of Symbian, and by mid-2010 Nokia was its only OEM outside Japan.
Nokia developed Symbian to replace S60, but it never became popular.
By Q4 2010, Symbian's market share dipped to 32%, surpassing Android's at
30%. Despite losing share, the smartphone unit was profitable and
smartphone unit sales increased every quarter during 2010. An estimated 4
million units were sold in Q4 2010.
In February 2010, Nokia and Intel announced MeeGo, a merger of their Linuxbased Maemo and Moblin projects aiming to create a unified mobile
operating system for a wide array of devices, including tablets and
smartphones. In particular, Nokia planned to use MeeGo as a successor to
Symbian on its future smartphones, but despite of warm reception from all
markets only Nokia N9 has been launched.
Partnership with Microsoft
In February 2011, Stephen Elop and Microsoft's CEO Steve Ballmer jointly
announced a major business partnership between the two companies, which
would see Nokia adopt Windows Phone as its primary platform on future
smartphones, replacing both Symbian and MeeGo. The deal also included the
use of Bing as the search engine on Nokia devices, and the integration
of Nokia Maps into Microsoft's own mapping services.
Downsizing
Amid falling sales, Nokia posted a loss of 368 million euros for Q2 2011,
whereas in Q2 2010, it had realized a profit of 227 million euros. On
September 2011, Nokia has announced it would cut another 3,500 jobs
worldwide, including the closure of its Cluj factory in Romania.
On February 8, 2012, Nokia Corp. announced 4,000 layoffs at smartphone
manufacturing plants in Europe by the end of 2012 to move assembly closer
to component suppliers in Asia. On 14 June 2012, Nokia announced 10,000
layoffs globally by the end of 2013 and shut production and research sites in
Finland, Germany and Canada in line with continuing losses and the stock
price falling to its lowest point since 1996.
In December 2012, Nokia announced that it would be selling its
headquarters Nokia House for 170 million, and leasing it back in the longterm. This decision was taken to slash costs as the company was during a
financial crisis of falling revenues.
In total, Nokia laid off 24,500 employees by the end of 2013.
Revival
In May 2013, Nokia released the Asha platform for its low-end borderline
smartphone devices
In the same month, Nokia announced its partnership with the world's largest
cellular operator China Mobile to offer Nokia's new Windows-based phone,
the Lumia 920, as Lumia 920T, an exclusive Chinese variant. The partnership
was a bid by Nokia to connect with China Mobile's 700 million-person
customer base.
Sale of mobile phone business to Microsoft
On September 2, 2013, Microsoft announced that it would acquire Nokia's
mobile device business in a deal worth 3.79bn($4.25bn), along with another
1.65bn($1.85bn) to license Nokia's portfolio of patents for 10 years; a deal
totaling at over 5.4bn($6.05bn)
As part of the deal, Microsoft acquired the Asha, X and Lumia brands, but
only had a limited license to the Nokia brand. Microsoft could only use the
Nokia brand to promote Asha, X and Lumia products until December 2015,
and feature phones for 10 years. Microsoft did not acquire any rights to
the Nokia tune, which the company may only use as the default ringtone on
Nokia-branded devices.
A number of Nokia executives joined Microsoft as a result; Stephen Elop
became the head of Microsoft's devices team (which include products such
as Xbox and Surface lines); Risto Siilasmaa replaced Elop as interim CEO,
before the appointment of Rajeev Suri. Post-acquisition, Nokia focuses on two
core business units; its infrastructure division Nokia Networks, and
developing and licensing division Nokia Technologies.
