Nokia's Evolution: From Pulp Mill to Tech Giant

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). [13] 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 the Russian Empire and started manufacturing paper. [14] 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.

15] 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. [15]

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.

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15] In 1902, Nokia added electricity generation to its business activities. [14] Networking equipment A Nokia P30 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. [25] In 1984, development of a version of the exchange for the Nordic Mobile Telephony network was started.

26] 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 Sanomalaitejarjestelma ("Message device system"), a digital, portable and encrypted text-based communications device for the Finnish Defence Forces. [27] The current main unit used by the Defence Forces is the Sanomalaite M/90 (SANLA M/90). 28] In 1998, Check Point established a partnership with Nokia, which bundled Check Point's Software with Nokia's computer Network Security Appliances. [29] Involvement in GSM Nokia was one of the key developers of GSM (Global System for Mobile Communications),[35] 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. 36][37]

Nokia delivered its first GSM network to the Finnish operator Radiolinja in 1989. [38] 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. [38] In 1992, the first GSM phone, the Nokia 1011, was launched. [38][39] The model number refers to its launch date, 10 November. [39] 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. 40] 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. [38] 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. [41]

Challenges of growth The Nokia House, Nokia's head office located by the Gulf of Finland in Keilaniemi, Espoo, was constructed between 1995 and 1997. It is the workplace of more than 1,000 Nokia employees. [21] 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. [49] 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,[50] 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. [51] 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. 23] 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. [23]

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. [52] The exploding worldwide popularity of mobile telephones, beyond even Nokia's most optimistic predictions, caused a logistics crisis in the mid-1990s. 53] This prompted Nokia to overhaul its entire logistics operation. [54] 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,[52] 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. [52] Logistics continues to be one of Nokia's major advantages over its rivals, along with greater economies of scale. [55][56] 2000 to present

Product releases The Nokia 3310 sold between 2000 and 2003, is arguably one of the most well known mobile phones. Reduction in size of Nokia mobile phones Nokia launched its Nokia 1100 handset in 2003,[30] with over 200 million units shipped, was the best-selling mobile phone of all time and the world's top-selling consumer electronics product. [57] Nokia was one of the first players in the mobile space to recognize that there was a 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, though it cost twice as much. [58] The N-Gage was not a success, and from 2007 and 2008, Nokia started to offer an N-Gage service on existing Symbian S60 smartphones to play games. 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. [59] In 2009, the company announced a high-end Windows-based netbook called the Nokia Booklet 3G. 48] On 2 September 2009, Nokia launched two new music and social networking phones, the X6 and X3. [60] The Nokia X6 featured 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 was the first series 40 Ovi Store-enabled device.

The X3 was a music device that comes with stereo speakers, built-in FM radio, and a 3. 2 megapixel camera. In 2009, Nokia also unveiled the 7705 Twist, a phone sporting a square shape that swiveled open to reveal a full QWERTY keypad, featuring a 3 megapixel camera, web browsing, voice commands and weighting around 3. 4 ounces (98 g). [61] On 9 August 2012, Nokia launched for the Indian market two new Asha range of handsets equipped with cloud accelerated Nokia browser, helping users browse the Internet faster and lower their spend on data charges. [62] Symbian Symbian was Nokia's main smartphone OS until 2011. In Q4 2004, Nokia released its first touch screen phone, the Nokia 7710. In September 2006, Nokia announced the Nokia N95, a Symbian-powered slider smartphone. It was released in February 2007 as the first phone with a 5-megapixel camera.

It became hugely popular. A 8GB variant was released in October 2007. 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. [63] The service became commercially available in the second half of 2008. 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, except the N9, which uses MeeGo. [64] 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 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 Sailfish OS. [65] The Nokia N8, from September 2010, 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. [66][67] Alliance with Microsoft The Nokia Lumia 920, Nokia's current flagship device.

On 11 February 2011, Nokia's CEO Stephen Elop, a former head of Microsoft business division, unveiled a new strategic alliance with Microsoft, and announced it would replace Symbian and MeeGo with Microsoft's Windows Phone operating system[69][70] 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. [71] 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. 72] Nokia's "applications and content store" (Ovi) becomes integrated into the Windows Phone Store, 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. [73] Symbian became described by Elop as a "franchise platform" with Nokia planning to sell 150 million Symbian devices after the alliance was set up. MeeGo emphasis was on longer-term exploration, with plans to ship "a MeeGo-related product" later in 2012. Microsoft's search engine, Bing was to become the search engine for all Nokia phones.

Nokia also intended to get some level of customisation on WP7. [74] After this announcement, Nokia's share price fell about 14%, its biggest drop since July 2009. [75] As Nokia was the largest mobile phone and smartphone manufacturer worldwide at the time,[76] it was suggested the alliance would make Microsoft's Windows Phone 7 a stronger contender against Android and iOS. [73] Because previously increasing sales of Symbian smartphones began to fall rapidly in the beginning of 2011, Nokia was overtaken by Apple as the world's biggest smartphone maker by volume in June 2011. 77] [78]

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. ". [79] Nokia reported "well above 1 million" sales for its Lumia line up to 26 January 2012,[80][81] 2 million sales for the first quarter of 2012,[82] and 4 million for the second quarter of 2012. 83] In this quarter, Nokia only sold 600,000 smartphones (Symbian and Windows Phone 7) in North America. [84] For comparison, Nokia sold more than 30 million Symbian devices world-wide still in Q4 2010[85] and the Nokia N8 alone sold almost 4 million in its first quarter of sale. In Q2 2012, 26 million iPhones and 105 million Android phones have been shipped, but only 6. 8 million devices with Symbian and 5. 4 million with Windows Phone[86] While announcing an alliance with Groupon, Elop declared "The competition... is not with other device manufacturers, it's with Google. [87]

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". [88] In June 2012, Nokia chairman Risto Siilasmaa told journalists that Nokia had a back-up plan in the eventuality that Windows Phone failed to be sufficiently successful in the market. [89][90] On October 29, 2012, Nokia said its high-end Lumia 820 and 920 phones, which will run on Microsoft's Windows Phone 8 software, will each first operators and retail outlets in some European markets including France and Britain and later in Russia and Germany as well as other select markets. [91]

On December 5, 2012, Nokia introduced two new smartphones, the Lumia 620 and Lumia 920T. The 620 was released in January 2013. In January 2013, Nokia reported 6. 6 million smartphone sales for Q4 2012 consisting of 2. 2 million Symbian and 4. 4 million sales of Lumia devices (Windows Phone 7 and 8). [92] In North America, only 700,000 mobile phones have been sold including smartphones. In May 2013 Nokia released the Asha platform for its low-end borderline smartphone devices