Once the world’s largest mobile phone company, Nokia has always been able to reinvent itself. The history of the Finnish technology giant dates back to Mid 19th century.
Nokia is the name of a weasel, river, town and Finland’s most famous company. Today the name is indelibly connected with mobile phones, but Nokia has a long and diverse history filled with innovation.
Early history: wood, rubber and cables
Many of Finland’s largest companies began in the forestry business, and Nokia is no exception. The roots of the company date back to 1865 when Fredrik Idestam established a wood pulp mill close to the town of Tampere.
In 1898 the forestry company Nokia was purchased by Eduard Polon, who also owned the Finnish Rubber Works. To these two companies Polon soon added a third: the Finnish Cable Works. Polon made good use of the Nokia brand name, which told Finns that they were buying Finnish products and not imported Russian ones.
The three companies may have had a common ownership, but they were not formally merged until 1967. By this time Nokia produced much more than industrial cables, rubber and wood pulp. In particular, CEO Björn Westerlund invested in electronics and telecommunications. He even encouraged researchers to work on their own projects, something very similar to Google’s famous policy of today.
The future is telecommunications
Nokia was involved in communications beginning in the 1960s. This evolved into radio and military communications, telephone networks and finally mobile phones by the 1980s.
During the 1980s Nokia expanded greatly throughout Europe, primarily through acquisitions. Yet the conglomerate model ran into problems and they sold other divisions such as forestry, televisions and computers. The rubber business was spun off into Nokian Tyres, which is still a thriving Finnish company today.
Jorma Ollila became CEO in 1992 and decided to focus solely on telecommunications. Nokia was a key developer of the GSM mobile standard, which was adopted widely throughout the world. This specialism in a new digital standard helped Nokia overtake the dying analogue market, and Nokia passed Motorola to become the largest mobile phone maker in the world in 1998.
Top of the world
Nokia couldn’t have done it without Finland. The country doubled public R&D spending, which benefited many companies. Nokia also worked closely with Finnish universities, not only in research but also with educators to develop needed skills in students. In fact, during some years Nokia hired practically every Finnish engineering graduate. Finally, Finland liberalised regulations and encouraged international competition.
At its height, Nokia contributed 23% of all corporate taxes in Finland and 20% of all exports. They were directly responsible for over 2% of all jobs and were indirectly responsible for quite a bit more. In 2000 Nokia even became – albeit briefly – the most valuable company in Europe.
The word “Nokia” became a synonym for “mobile phone” in many places around the world. Finland, through Nokia, developed a reputation for high technology and high quality. Even today the popular Nokia 3310 model is jokingly called indestructible.
Back to the future
Nokia controlled about 40% of the mobile phone market in 2007 when Apple entered the fray. Nokia couldn’t compete against the iPhone experience and worse problems came from Google and Android. An attempt to switch to the Windows operating system made matters worse, not better, and in 2014 Nokia sold off their mobile device business to Microsoft.
New CEO Rajeev Suri now focused on network telecommunications, and the purchase of Alcatel-Lucent made Nokia the second largest company in the industry. They also continued their high-tech exploration in sectors like health care, mobile applications, tablet computers and professional cameras for virtual reality applications.
Many people still missed the old Nokia phones, and their dreams were answered in the spring of 2016. A new company, HMD, will create Nokia-branded mobile phones and tablets using the Android operating system. People have been wishing for a marriage of Nokia products and the Android operating system for years, and now they will finally get their chance.
By David J. Cord, author of The Decline and Fall of Nokia, June 2016