Nokia

• 1. Introduction

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  In the year 2000, the Finnish corporation Nokia accounted for 4% of Finland's GDP, 21% of the country's total exports, and 70% of the market capital on the Nasdaq Helsinki exchange. Finns viewed the company with national pride, and for good reason. Its mobile phones had made it by far the largest company and brand ever to come from Finland. By 2020 Nokia employed approximately 92,000 people across more than 100 countries, with annual revenues of around €23 billion. Yet over its 150 years the company has worn many faces, and the one the world remembers best is only one of them. How did a business associated with rubber and cables become the biggest seller of mobile phones on Earth? Why did that phone business end up sold to a software company? And what does Nokia make now that the handsets are gone?

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• 2. Pulp Mill To Conglomerate

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  Mining engineer Fredrik Idestam set up a pulp mill in 1865 on the shores of the Tammerkoski rapids, near the town of Tampere. Finland was then a Grand Duchy under the rule of the Russian Empire. In 1868 a second mill opened near the neighboring town of Nokia, where the hydropower was better. In 1871 Idestam and his friend Leo Mechelin formed a shared company and named it Nokia Ab, after the site of that second mill.

  Idestam retired in 1896, which made Mechelin the chairman. Mechelin pushed the firm into electricity generation by 1902, a step Idestam had opposed. In 1904 a rubber business called Suomen Gummitehdas, the Finnish Rubber Works, built a factory near the town of Nokia and borrowed its name. Its founder was Eduard Polón.

  In 1922, in a Finland that was now independent, Nokia Ab entered a partnership with the Finnish Rubber Works and with Kaapelitehdas, the Cable Factory. All three now answered to Polón. The rubber company moved to the Nokia region in the 1930s to tap the electricity supply, and the cable company soon followed. Across those same decades Nokia also made respirators for civilian and military use, a line that continued into the early 1990s.

  In 1967 the three companies merged into a new Nokia Corporation with four major businesses: forestry, cable, rubber, and electronics. In the early 1970s the new group stepped into the networking and radio industries.

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• 3. Cold War Balancing

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  Finland's trade agreement with the Soviet Union in the 1960s handed Nokia an enormous customer. The goods ranged from automatic telephone exchanges to robotics, and by the late 1970s the Soviet Union had become a major market that yielded high profits. Nokia also supplied Finland's own defence forces, with items such as the Sanomalaite M/90 communicator in 1983 and the M61 gas mask, first developed in the 1960s.

  The arrangement grew awkward in the 1980s. The U.S. government worried that high technology, such as digital telephone exchanges, might travel on to the Soviet Union. In 1987 Finland joined the Coordinating Committee for Multilateral Export Controls. It was a sign of a neutral country balancing between both sides of the Cold War.

  In 1977 Kari Kairamo became CEO and set out to transform the company. Finland was then being called a "Nordic Japan". Under him Nokia bought the television maker Salora in 1984, the Swedish electronics and computer maker Luxor AB in 1985, and the French television maker Oceanic in 1987. Those deals made Nokia the third-largest television manufacturer in Europe, behind Philips and Thomson. The old brand names stayed on the sets until the business ended in 1996, when Nokia announced its sale to Semi-Tech Corporation, a firm based in Canada and Hong Kong. A German plant closed in September of that year.

  Kairamo kept buying. In 1987 Nokia took over Schaub-Lorenz, the consumer arm of Germany's Standard Elektrik Lorenz, and sold its products under the ITT Nokia name. On the 1st of April 1988 it bought the Information Systems division of Ericsson, which had begun life as the Datasaab computer division of Saab. Joined with Nokia's own computer unit, which had sold a personal computer line called MikroMikko since 1981, it became Nokia Data. After all these deals the company's revenue base stood at US$2.7 billion.

  Kairamo died by suicide on the 11th of December 1988, and the sprawling group he had assembled passed to a successor.

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• 4. Betting On Telecom

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  Simo Vuorilehto inherited a company with 11 groups and began selling the ones he judged to be un-strategic. Nokian Tyres, a tyre producer formed in 1932 as a division of the Finnish Rubber Works, split away in 1988. The Finnish Rubber Works itself followed two years later. In 1991 Nokia sold Nokia Data to the British firm International Computers Limited. Investors read the sale as a sign of financial trouble, and the share price sank. Finland was in its worst recession in living memory, and the collapse of the Soviet Union removed a major customer.

  Vuorilehto quit in January 1992. His replacement, Jorma Ollila, had run the mobile phone business since 1990 and had advised against selling it. Ollila decided to turn Nokia into a telecom-oriented company, and he gradually shed divisions such as the power business. The strategy paid off. Operating profit climbed from negative in 1991 to $1 billion in 1995 and almost $4 billion by 1999.

  The business Ollila protected had started in 1979, when Nokia and Salora Oy created Mobira, a maker of mobile radio telephones. In 1981 Mobira launched the Nordic Mobile Telephone service, the world's first international cellular network and the first to allow international roaming. The Mobira Senator car phone arrived in 1982 as Nokia's first mobile phone. Even so, the executive board had little appetite for the product and compared mobile phones to James Bond gadgets, improbably futuristic and niche. Nokia bought Mobira outright in 1984. The first fully portable model, the Mobira Cityman 900, came in 1987.

  Nokia also helped develop the GSM mobile standard during the 1980s and built the first GSM network together with Siemens. On the 1st of July 1991, Finnish prime minister Harri Holkeri made the world's first GSM call. It ran on a 900 MHz network that Nokia had built and Radiolinja operated. In November 1992 the Nokia 1011 went on sale as the first commercially available GSM phone.

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• 5. Top Of The Handset World

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  In October 1998 Nokia overtook Motorola as the best-selling mobile phone brand, and in December it built its 100 millionth handset. A major reason was its appeal to young and fashion-minded buyers. The Nokia 5110 and 3210 came with a range of colourful, replaceable back covers called Xpress-on. Swiss watchmaker Swatch had already based one of the earliest fashion phones, in 1992, on Nokia's 101 handset. Nokia later formed the Vertu division to make luxury handsets.

  The numbers grew staggering. In 1998 alone the company took in $20 billion in sales and made $2.6 billion in profit. By 2000 it employed over 55,000 people and held 30% of the mobile phone market, almost twice the share of Motorola. It operated in 140 countries as of 1999, and some people reportedly believed it was a Japanese company. Between 1996 and 2001 turnover rose fivefold, from €6.5 billion to €31 billion. A Reader's Digest survey near the end of 2000 named Nokia the "most trusted brand in Europe", ahead of Sony, Canon, and Nivea.

  The Nokia 3600/3650 became the first camera phone on sale in North America in 2003. In April 2005 Nokia partnered with the German optics maker Carl Zeiss AG and introduced the Nseries, its flagship smartphone line for the next six years. The N95 of September 2006 won the title of best mobile imaging device in Europe in 2007. Its successor, the N82, carried a xenon flash and won the same award in 2008. The N93 switched between a clamshell shape and a camcorder-like position by twisting. Later came the N8 with a 12-megapixel sensor in 2010 and the 808 PureView with a 41-megapixel sensor in 2012.

  Games were a smaller story. Snake came preloaded on many Nokia phones and helped pioneer mobile gaming. In 2002 the company tried to enter the handheld market with the N-Gage. Ilkka Raiskinen, its head of entertainment and media, said "Game Boy is for 10-year-olds", arguing the N-Gage suited a more mature audience. The device failed against market leader Nintendo, and Nokia relaunched N-Gage as a platform for S60 smartphones in 2008.

  In the first quarter of 2004 handset market share dropped to 28.9%, down from 34.6% a year earlier. By the fourth quarter of 2007 it reached an all-time high of 40.4%, with 51% of smartphones. Nokia was the largest vendor in every region but one. That exception was North America, where its phones stayed almost irrelevant for many years.

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• 6. Falling Behind

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  In 1998 Nokia co-founded Symbian Ltd., led by Psion, to create an operating system for PDAs and smart mobile phones. The Nokia 9210 Communicator ran Symbian OS in 2001, and later that year came the Series 60 platform, introduced on the Nokia 7650 camera phone. In February 2004 Nokia became the largest shareholder, and in June 2008 it bought the entire company. Then iOS and Android arrived, and Symbian quickly came to look outdated and hard for developers to work with.

  The warning signs piled up. The N97 flagship failed, and the N8 of April 2010 was delayed for many months, which tarnished the company's image. In October 2009 Nokia sued Apple, claiming infringement of 10 patents. Apple countersued in December with 11 claims of its own. Apple's general counsel, Bruce Sewell, said other companies must compete by inventing their own technologies, not just by stealing Apple's. The dispute ended in June 2011 with an estimated one-time payment of $600 million to Nokia, plus royalties.

  On the 10th of September 2010, Olli-Pekka Kallasvuo was fired as CEO. Stephen Elop of Microsoft took over as the first non-Finnish director in Nokia's history. It was claimed that investors had pressed the board to recruit an outsider who would break from the traditional "Nokia way". Nokia announced a $6 million signing bonus for Elop on top of his $1.4 million annual salary. Shortly after he started, the board gave him freedom to change the phone strategy, including the operating system. Anssi Vanjoki, head of the smartphones division, left around the same time.

  On the 11th of February 2011 Nokia announced a strategic partnership with Microsoft and adopted Windows Phone 7 as its primary smartphone system. Elop said Nokia chose against Android because it could not differentiate its offerings. Critics noted his past ties to Microsoft. The MeeGo-based N9 won a very positive reception that year, but development had already ended. Demand for Symbian fell once consumers realized the company's attention lay elsewhere.

  The company posted a large loss for the second quarter of 2011, only its second quarterly loss in 19 years. The first Windows Phone flagship, the Lumia 800, arrived in November 2011. Losses continued through 2012, and by mid-2012 the share price fell below $2. In 2007 Nokia had been worth €110 billion. By the 17th of July 2012 its market value was €6.28 billion. Elop announced cuts of 10,000 jobs and the closure of the Salo plant, and the Finnish prime minister said the government would not subsidize the firm from an emergency state fund.

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• 7. Selling The Phones

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  In September 2013 Nokia announced it would sell its mobile and devices division to Microsoft. Chairman Risto Siilasmaa described the deal as rationally correct for shareholders but emotionally difficult. Experts agree Nokia would have faced a cash crisis without it. Analysts believe Microsoft CEO Steve Ballmer pushed for the purchase partly because he feared Nokia was close to adopting Android. Support for that theory came in January 2014, when Nokia introduced the Nokia X, which ran a customised version of Android, just weeks before the sale closed.

  Ballmer was retiring, and his successor Satya Nadella opposed the purchase, as did chairman Bill Gates. Others, Nadella among them, felt that merging Microsoft's software teams with Nokia's hardware engineering would accelerate Windows Phone. The sale was completed in April 2014, and Microsoft Mobile became the successor to the devices division. Nokia moved its headquarters to a building complex at Karaportti. Microsoft wrote off the purchased assets in 2015.

  By 2014 Interbrand ranked Nokia's global brand value at 98th place. In 2009 it had stood in 5th. Analysts disagree on why the fall happened, and many are split over the 2011 decision to drop the in-house operating system for Windows Phone. Many researchers concluded that deep internal rivalries within management were to blame. Former employees said the early success made managers swollen and complacent. Some from the Symbian team claimed that upper management rejected hundreds of proposed innovations during the 2000s, including an entire rewrite of Symbian's code. One former employee said the company was run as a "Soviet-style bureaucracy".

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• 8. Networks And Reinvention

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  The Nokia Siemens Networks brand launched at the 3GSM World Congress in Barcelona in February 2007, as a joint venture owned 50.1% by Nokia and 49.9% by Siemens. In July 2013 Nokia bought Siemens' stake for $2.2 billion. During the lean years this profitable networking business supplied much of the company's income. The venture had a darker episode in 2008, when it reportedly gave Iran's telecom monopoly the ability to intercept citizens' communications. After protests in June 2009, a consumer boycott hit Nokia in Iran. The company said it had provided only a lawful intercept capability for monitoring local voice calls.

  On the 15th of April 2015, Nokia agreed to buy the French firm Alcatel-Lucent for €15.6 billion in an all-stock deal. CEO Rajeev Suri believed the purchase would give Nokia a strategic advantage in 5G. Nokia shareholders would hold 66.5% of the combined company and Alcatel-Lucent shareholders 33.5%. The deal brought Bell Labs along, and it closed on the 14th of January 2016, though it was not complete until the 3rd of November 2016.

  Other pieces moved at the same time. On the 3rd of August 2015 Nokia agreed to sell its Here digital maps division to a consortium of BMW, Daimler, and Volkswagen for €2.8 billion. In April 2016 it announced the purchase of the French health device maker Withings for US$191 million, then sold the unit back to a co-founder in May 2018 after writing off the cost. Its OZO virtual reality camera, announced in July 2015 at an intended price of US$60,000, ended production in 2017.

  The Nokia name came back to phones through HMD Global, a company founded by former Nokia executive Jean-Francois Baril. On the 18th of May 2016 it gained the exclusive right to make Nokia-branded phones and tablets outside Japan. The Android-based Nokia 6 followed in January 2017, along with a re-imagined version of the classic 3310.

  On the 28th of June 2016 Nokia demonstrated a 5G-ready network for the first time. In October 2020 it won a $14.1 million contract with NASA to build a 4G mobile network for astronauts on the moon. In February 2023 it introduced its first new logo in nearly 60 years, designed by Lippincott, because people still associated the old one with mobile phones. In October 2025 a partnership with Nvidia brought an investment from the chipmaker. By May 2026 the share price had hit a 16-year high, driven by artificial intelligence infrastructure. Revenue from AI and cloud customers rose by nearly 50 percent in the first quarter of 2026.

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