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Nokia Corporation[3] (Finnish: Nokia Oyj, Swedish: Nokia Abp; Finnish pronunciation: [ˈnokiɑ], English /ˈnɒkiə/) (OMX: NOK1V, NYSE: NOK) is a Finnish multinational communications and information technology corporation (originally a paper production plant)[4] that is headquartered in Espoo, Finland.[5] Its principal products are mobile telephones and portable IT devices. It also offers Internet services including applications, games, music, media and messaging, and free-of-charge digital map information and navigation services through its wholly owned subsidiary Navteq.[6] Nokia has a joint venture with Siemens, Nokia Siemens Networks, which provides telecommunications network equipment and services.[7]
Nokia has around 101,982 employees across 120 countries, sales in more than 150 countries and annual revenues of around €30 billion.[2] It is the world's second-largest mobile phone maker by 2012 unit sales (after Samsung), with a global market share of 22.5% in the first quarter of that year.[8] Nokia is a public limited-liability company listed on the Helsinki Stock Exchange and New York Stock Exchange.[9] It is the world's 143rd-largest company measured by 2011 revenues according to the Fortune Global 500.[10]
Nokia was the world's largest vendor of mobile phones from 1998 to 2012.[8] However, over the past five years it has suffered a declining market share as a result of the growing use of smartphones from other vendors, principally the Apple iPhone and devices running on Google's Android operating system. As a result, its share price has fallen from a high of US$40 in late 2007 to under US$2 in mid-2012.[11][12] Since February 2011, Nokia has had a strategic partnership with Microsoft, as part of which all Nokia smartphones will incorporate Microsoft's Windows Phone operating system (replacing Symbian), with the exception of the S40 and now the Asha platform at the low end of borderline smartphone devices. Since then previously increasing smartphone sales have been collapsing[13] and the previously profitable smart devices business unit went loss-making.[14][2]
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).[15]
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.[16] 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.[17] 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.[17]
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.[17] In 1902, Nokia added electricity generation to its business activities.[16]
Industrial conglomerate
In 1898, Eduard Polón founded Finnish Rubber Works, manufacturer of galoshes and other rubber products, which later became Nokia's rubber business.[15] 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.[18] 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.[15]
At the end of the 1910s, shortly after World War I, the Nokia Company was nearing bankruptcy.[19] To ensure the continuation of electricity supply from Nokia's generators, Finnish Rubber Works acquired the business of the insolvent company.[19] In 1922, Finnish Rubber Works acquired Finnish Cable Works.[20] 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.[21] 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.[21]
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.[22] 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.[23] 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.[24]
Eventually, the company decided to leave consumer electronics behind in the 1990s and focused solely on the fastest growing segments in telecommunications.[25] Nokian Tyres, manufacturer of tires, split from Nokia Corporation to form its own company in 1988[26] and two years later Nokian Footwear, manufacturer of rubber boots, was founded.[18] During the rest of the 1990s, Nokia divested itself of all of its non-telecommunications businesses.[25]
1967 to 2000
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.[24] 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.
Reorganizations
In March 2007, Nokia signed a memorandum with Cluj County Council, Romania to open a new plant near the city in Jucu commune.[96][97][98] Moving the production from the Bochum, Germany factory to a low wage country created an uproar in Germany.[99][100] Nokia recently moved its North American Headquarters to Sunnyvale.
In April 2003, the troubles of the networks equipment division caused the corporation to resort to similar streamlining practices on that side, including layoffs and organizational restructuring.[101] This diminished Nokia's public image in Finland,[102][103] and produced a number of court cases and an episode of a documentary television show critical of Nokia.[104]
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.[105][106][107]
In June 2006, Jorma Ollila left his position as CEO to become the chairman of Royal Dutch Shell[108] and to give way for Olli-Pekka Kallasvuo.[109][110]
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.[111]
In November 2008, Nokia announced that it was ceasing mobile phone distribution in Japan.[112] 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.
In April 2009, Check Point announced that it has completed the acquisition of Nokia's network security business unit.[113]
In February 2012, Nokia annonunced that it was laying off 4,000 employees to move manufacturing from Europe and Mexico to Asia.[114]
In March 2012, Nokia annonunced that it was laying off 1,000 employees from its Salo, Finland factory to focus on software.[115]
In January 2013, Nokia annonunced that it was laying off about 1,000 employees from its IT, production and logistics division. The jobs of about 715 of were to be transferred to Nokia's subcontractors
In 2011, Nokia had 130,000 employees in 120 countries, sales in more than 150 countries, global annual revenue of over €38 billion, and operating loss of €1 billion.[14] It was the world's largest manufacturer of mobile phones in 2011, with global device market share of 23% in the second quarter.[77]
The Nokia Research Center, founded in 1986, is Nokia's industrial research unit consisting of about 500 researchers, engineers and scientists;[148][149] it has sites in seven countries: Finland, China, India, Kenya, Switzerland, the United Kingdom and the United States.[150] Besides its research centers, in 2001 Nokia founded (and owns) INdT – Nokia Institute of Technology, a R&D institute located in Brazil.[151] Nokia operates a total of 9 manufacturing facilities[9] located at Salo, Finland; Manaus, Brazil; Cluj, Romania; Beijing and Dongguan, China; Komárom, Hungary; Chennai, India; Reynosa, Mexico; and Changwon, South Korea.[96][152] 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.[9] Nokia plays a very large role in the economy of Finland.[153][154] It is an important employer in Finland and several small companies have grown into large ones as its partners and subcontractors.[155] In 2009 Nokia contributed 1.6% to Finland's GDP, and accounted for about 16% of Finland's exports in 2006.[156].[116]
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