Nokia Corporation

Nokia Pre-telecommunications era

What is known today as Nokia (pronounced /nok-iɑ/ in IPA) was established in 1865 as a pulp mill by Knut Fredrik Idestam on the banks of Nokia rapids. Finnish Rubber Works established its factories in the beginning of 20th century nearby and began using Nokia as its brand. Shortly after World War I Finnish Rubber Works acquired Nokia wood mills as well as Finnish Cable Works, a producer of telephone and telegraph cables. All these three companies were merged into the Nokia Corporation in 1967.

The Nokia Corporation that was created in the 1967 fusion was involved in many sectors, producing at one time or another paper products, bicycle and car tyres, footwear (including Wellington boots), personal computers, communications cables, televisions, electricity production, capacitors, aluminium, etc.

Telecommunications era

The seeds of the current incarnation of Nokia were planted with the founding of the electronics section of the cable division in the 1960s. In the 1967 fusion, that section was separated into its own division, and began manufacturing telecommunications equipment.

Since 1964 Nokia had developed VHF-radio simultaneously with Salora Oy, which later in 1971 also developed the ARP-phone. Fusion of these two companies resulted in 1979 as Mobira Oy and in three years it launched the NMT phone. Nokia bought Salora Oy in 1984 and now owning 100% of the company, changed the company's name to Nokia-Mobira Oy. In 1988 Jorma Nieminen and others started a spin-off company; Benefon Oy. One year later, Nokia Mobira Oy became Nokia Mobile Phones and in 1991 the first GSM phone was launched.

In the 1970s, Nokia became more involved in the telecommunications industry by developing the Nokia DX200, a digital switch for telephone exchanges. In 1982, a DX200 switch became the world's first digital telephone switch to be put into operational use. The DX200 became the workhorse of the network equipment division. Its modular and flexible architecture enabled it to be developed into various switching products.

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 1980s, Nokia produced a series of personal computers called MikroMikko.[6] However, the PC division was sold to ICL, which later became part of Fujitsu. That company later transferred its personal computer operations to Fujitsu Siemens Computers, which shut down its only factory in Finland (in the town of Espoo, where computers had been produced since the 1960s) at the end of March 2000, thus ending large-scale PC manufacturing in the country.

First Nokia mobile phones

Nokia had been producing commercial and military mobile radio communications technology since the 1960s and later began developing mobile phones for the Nordic Mobile Telephone (NMT) network standard that went online in the 1980s.

Nokia introduced its first car phone, the Mobira Senator, in 1982 and the world's first hand-held NMT mobile phone, the Mobira Cityman, in 1987. NMT was the world's first mobile telephony standard that enabled international roaming, and provided valuable experience for Nokia for its close participation in developing Global System for Mobile Communications (GSM). It is a digital standard which came to dominate the world of mobile telephony in the 1980s and 1990s, in mid-2006 accounting for about two billion mobile telephone subscribers in the world, or about 80% percent of the total, in more than 200 countries. The world's first commercial GSM call was made in 1991 in Helsinki over a Nokia-supplied network, by Prime Minister of Finland Harri Holkeri, using a Nokia phone.

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 heavily loss-making television division. (These problems probably contributed to Kairamo taking his own life in 1988.) Nokia responded by streamlining its telecommunications divisions, and by divesting itself of the television and PC divisions. Jorma Ollila, who became the CEO in 1992, made a strategic decision to concentrate solely on telecommunications. Thus, during the rest of the 1990s, Nokia continued to divest itself of all of its non-telecommunications divisions.

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. Logistics continues to be one of Nokia's major advantages over its rivals, along with greater economies of scale.

Nokia In the new millennium

In 2004, the troubles of the networks equipment division caused the corporation to resort to similar streamlining practices on that side, with layoffs and organizational restructuring. This, however, diminished Nokia's public image in Finland, and produced a number of court cases along with an episode of a documentary television show critical towards Nokia.

Despite these occasional crises, Nokia has been phenomenally successful in its chosen field. This growth has come mostly during the era of Jorma Ollila and his team of about half a dozen close colleagues. In June 2006, this era came to an end with Ollila leaving the CEO position to become the chairman of Shell. The new CEO of Nokia is Olli-Pekka Kallasvuo.

On February 2006 Nokia and Sanyo announced a MOU to create a joint venture addressing the CDMA handset business. A few months later, in June, both companies announced ending their negotiations without agreement. Nokia also stated their decision to pull out of CDMA R&D, with the intention to continue CDMA business in selected markets.

On June 19, 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. Both companies will have a 50% stake in the infrastructure company, to be headquartered in the Helsinki area, and to be called Nokia Siemens Networks. The companies predict annual sales of €16 billion and cost savings of €1.5 billion a year by 2010. About 20,000 Nokia employees will be transferred to this new company.

On May 3, 2007 Nokia announced its Nokia 1100, with over 200 million units served, is the best-selling mobile phone of all time and the world's top-selling consumer electronics product.



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