Encyclopedia
Nokia Corporation is the world's largest manufacturer of
mobile telephones , with a global market share of approximately 34% in Q2 of 2006. It produces mobile phones for every major market and protocol, including
GSM,
CDMA, and W-CDMA .
The corporation also produces
telecommunications network equipment for applications such as mobile and fixed-line voice telephony, ISDN, broadband access,
voice over IP, and
wireless LAN.
Nokia's headquarters are in
Espoo, a neighbouring city of
Helsinki,
Finland, but it has R&D, manufacturing, and sales representation sites in many continents throughout the world.
Nokia Research Center, the corporation's industrial research laboratories, has sites in Helsinki and in
Cambridge, Massachusetts,
USA.
Nokia is by far the largest Finnish company, accounting for about half of the market capitalization of the Helsinki Stock Exchange ; a unique situation for an
industrialized country. It also plays a very large role in the economy of Finland, and
Finns have ranked it many times as the best Finnish brand and employer.
History
What is known today as Nokia 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 ,
personal computers, communications cables,
televisions,
electricity production, 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.
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 the
1980s, Nokia produced a series of
personal computers called
MikroMikko. 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 at the end of March 2000 , thus ending large-scale PC manufacturing in the country.
First mobile phones
Nokia's first major
mobile phone order came from the
Finnish Defence Forces in 1972, for field radios. In the 1970s, Nokia began developing mobile phones for the Nordic Mobile Telephone network standard, that went online in the 1980s. Nokia introduced the world's first NMT mobile phone, the Nokia 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 . 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 aggressively 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. 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.
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 19 June 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 euros and cost savings of 1.5 billion euros a year by 2010. About 20,000 Nokia employees will be transferred to this new company.
Product divisions
Nokia comprises four business groups: Mobile Phones, Multimedia, Enterprise Solutions and Networks, plus various horizontal entities such as Customer and Market Operations, and Technology Platforms.
Mobile Phones
Nokia's Mobile Phones division provides people with mobile voice and data products across a wide range of mobile devices. The division aims to target primarily high-volume category sales of mobile phones and devices, with consumers being the most important customer segment. The devices are based on GSM/EDGE, 3G/WCDMA and CDMA cellular technologies.
Nokia believes that design, brand, ease of use and price are mainstream mobile phones' most important considerations to customers. Nokia's product portfolio includes
camera phones with features such as megapixel
cameras and
MP3 players which appeal to the mass market. In the first quarter of 2006 Nokia sold over 15 million MP3 capable mobile phones, this means that Nokia is not only the world's leading supplier of mobile phones and digital cameras , Nokia is now also the leading supplier of digital audio players . Nokia aims to sell 80 million music phones by the end of 2006, outpacing sales of devices such as
iPods from
Apple.
Multimedia
The Multimedia division's purpose is to design devices and applications that bring
multimedia experiences to their customers. These devices allow people to create, access and consume multimedia, as well as share their experiences with others. The devices are included with a wide range of connectivity such as GSM, 3G/WCDMA, WLAN and Bluetooth.
The Multimedia group also works with other companies outside the telecommunications industry to make advances in the technology and bring new applications and possibilities in areas such as Internet services, optics, music synchronization and streaming media.
Enterprise Solutions
As the name implies, the Nokia Enterprise Solutions offers businesses, corporations and institutions a broad range of products and solutions, such as enterprise-grade mobile devices, underlying security infrastructure, software and services. Nokia also works with a range of companies to provide network security, bring mobilized corporate
e-mail and extend corporate telephone systems to work with Nokia’s mobile devices.
Networks
Nokia Networks provides mobile network infrastructure, communications and networks service platforms, as well as professional services to operators and service providers. Networks focuses in: GSM, EDGE and 3G/WCDMA networks; core networks with increasing IP and multiaccess capabilities; and services.
At the end of 2005, Networks had more than 150 mobile network customers in more than 60 countries, with its systems serving in excess of 400 million subscribers.
On 19 June 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, called
Nokia Siemens Networks. hi
Corporate affairs
Historical logos
Corporate governance
| Group Executive Board |
|---|
Olli-Pekka Kallasvuo
President and CEO of Nokia Corporation from June 1, 2006
With Nokia 1980-81, rejoined 1982, Group Executive Board member since 1990 | Robert Andersson
Executive Vice President, Customer and Market Operations
Joined Nokia 1985, Group Executive Board member since October 1, 2005 | Simon Beresford-Wylie
Executive Vice President and General Manager of Networks
Joined Nokia 1998, Group Executive Board member since February 1, 2005 | Mary T. McDowell
Executive Vice President and General Manager of Enterprise Solutions
Joined Nokia 2004, Group Executive Board member since 2004 | Hallstein Moerk
Executive Vice President, Human Resources
Joined Nokia 1999, Group Executive Board member since 2004 | Tero Ojanperä
Executive Vice President, Chief Technology Officer
Joined Nokia 1990, Group Executive Board member since January 1, 2005 | Niklas Savander
Executive Vice President, Technology Platforms
Joined Nokia 1997, Group Executive Board member since April 1, 2006 | Richard A. Simonson
Executive Vice President, Chief Financial Officer
Joined Nokia 2001, Group Executive Board member since 2004 | Veli Sundbäck
Executive Vice President, Corporate Relations and Responsibility of Nokia Corporation
Joined Nokia 1996, Group Executive Board member since 1996 | Anssi Vanjoki
Executive Vice President and General Manager of Multimedia
Joined Nokia 1991, Group Executive Board member since 1998 | Dr. Kai Öistämö
Executive Vice President and General Manager of Mobile Phones
Joined Nokia 1991, Group Executive Board member since October 1, 2005 |
| | Board of Directors |
|---|
Jorma Ollila
Chairman of the Board of Directors, Nokia Corporation
Board member since 1995, Chairman since 1999
Chairman of the Board of Directors of Royal Dutch Shell PLC | Paul J. Collins
Board member since 1998, Vice Chairman since 2000 | Georg Ehrnrooth
Board member since 2000
Member of the Personnel Committee, Member of the Audit Committee | Daniel R. Hesse
Board member since 2005
Chairman and Chief Executive Officer EMBARQ Corporation | Dr. Bengt Holmström
Board member since 1999 | Per Karlsson
Board member since 2002
Independent Corporate Advisor | Dame Marjorie Scardino
Board member since 2001
Chief Executive and member of the Board of Directors of Pearson PLC | Keijo Suila
Board member since March 30, 2006 | Vesa Vainio
Board member since 1993 |
|
Source: Corporate culture
Nokia's official corporate culture manifesto,
The Nokia Way, emphasises the speed and flexibility of decision-making in a flat, networked organization, although despite best intentions, the corporation's size necessarily imposes a certain amount of bureaucracy. Equality of opportunities and openness of communication are also stressed, along with management leadership and employee participation.
Nokia is a progressive and forward-thinking mobile technology group that spends a significant amount of its revenue on research and development, and prides itself on often being the first to market with new products and applications.
The official business language of Nokia is English. All documentation is written in English, and is used in official intra-company spoken communication and e-mail.
The
Nokia Values are Customer Satisfaction, Respect,
Achievement, and Renewal.
Product quality
The
UK consumer group Which? released a report which found that 70% of consumers thought Nokia's product quality high, but when there were issues, customer service levels were found to be poor. In particular, products requiring the installation of computer software fared very badly.
Trivia
- Unlike other modern day handsets, Nokia phones do not automatically start the call timer when the call is connected, but start it when the call is initiated.
- The name of the town of Nokia originated from the river which flowed through the town. The river itself, Nokianvirta, was named after the old Finnish word originally meaning sable, later pine marten. A species of this small, black-furred predatory animal was once found in the region, but it is now extinct.
- The native Finnish pronunciation of "Nokia" is , i.e. stress on the first syllable and all vowels short. English speakers often pronounce the name as or .
- The "Special" tone available to users of Nokia phones when receiving SMS is actually Morse code for "SMS". Similarly, the "Ascending" SMS tone is Morse code for "Connecting People," Nokia's slogan. The "Standard" SMS tone is Morse code for "M" .
...
guitar work named "Gran Vals" by
Spanish musician Francisco Tárrega. The Nokia Tune was originally named "Grande Valse" on Nokia phones but was changed to "Nokia Tune" around 1998 when it became so well known that people referred to it as the "Nokia Tune."
- Nokia is sometimes called aikon by non-Nokia mobile phone users and by mobile software developers, because "aikon" is used in various SDK software packages, including Nokia's own Symbian S60 SDK.
- Nokia sponsored several pan-European Alternate Reality Games from 1999 to 2005, under the name Nokia Game. These were used to promote their latest phones, as well as introducing the ARG format to Europe.
- Nokia was listed as the 20th most admirable company worldwide in Fortune's list of 2006 .
- The Nokia corporate font is the AgfaMonotype Nokia Sans font, originally designed by Erik Spiekermann. Previously in advertising and in its mobile phone User's Guides Nokia mostly used the Agfa Rotis Sans font.
- Nokia handsets are prominently featured and preferred on film and music videos, making the brand one of the heavy users of product placement.
See also
References and footnotes
Further reading
- Michael Lattanzi, Antti Korhonen, Vishy Gopalakrishnan . Work Goes Mobile: Nokia's Lessons from the Leading Edge. ISBN 0-470-02752-5 .
- Christian Lindholm, Turkka Keinonen, Harri Kiljander . Mobile Usability: How Nokia Changed the Face of the Mobile Phone. ISBN 0-07-138514-2 .
- Martti Häikiö . "Nokia: The Inside Story". ISBN 73659839 .
- Trevor Merriden . Business The Nokia Way: Secrets of the World's Fastest Moving Company. ISBN 1-84112-104-5 .
- Dan Steinbock . The Nokia Revolution: The Story of an Extraordinary Company That Transformed an Industry. ISBN 0-8144-0636-X .
External links
