Capitalising on new technologies, Nokia has ensured its position as the market leader in telecommunications
Nokia Corporation is the world's leading mobile phone supplier. Its market share in the mobile phone business is said to be between 35 and 40 per cent. This means
that more than one out of three people who own a mobile device on the planet, are using a Nokia product. Globally, nearly 70,000 employees work for Nokia.
Its net sales for 2007 were 51.1 billion euros
(Dh243.7 billion) and its operating profit was 8.0 billion euros (Dh38.15 billion).
Nokia's history dates back to the 19th century. In 1865, hoping to capitalise on Finland's plethora of natural lumber resources, Knut Frederick Idestam, a Finnish mining engineer and businessman, built a wood pulp mill
on the banks of the Tammerkoski Rapids, north of Helsinki. Idestam's new, cheap manufacturing process was a huge success.
He opened a second mill on the banks
of the Nokianvirta River, where Nokia received its name. In 1871 Idestam officially named the company Nokia Ab.
From the beginning, Nokia followed a path of expansion and diversification for its products and services. In 1898 Arvid Wickstrom founded Finnish Rubber Works, which would become the basis for Nokia's rubber business. In 1912 Eduard Polon created the Finnish Cable Works, which would be the foundation for Nokia's cable and electronics department.
The Cable Works began its foray into telecommunications in 1963, developing radio telephones for the Finnish army and emergency services.
Mega merger
The ownership of Nokia Ab, Finnish Rubber Works and Finnish Cable Works began to shift gradually into the hands of a few owners. In 1967 the three companies merged to form the Nokia Corporation. For the next few decades, Nokia Corporation was involved in the production of a wide range of products including paper products, bicycle and car
tyres, personal computers, communication cables, televisions and electrical power generating machinery.
Growth occurred in all sectors of Nokia Corporation, but it was particularly impressive in its acquisitions in the telecommunications business. Its growth during these years set it up for wide expansion in telecommunications and set the tone for a long-term growth in the future.
In 1981, the first international mobile phone network, Nordic Mobile Telephone (NMT), was built. The mobile phone industry expanded rapidly.
Nokia soon introduced the first car phones to its array of products. By 1986, the company was also providing
base stations and switches for NMT operators. Handheld mobile phones for NMT networks were created in 1987. At the beginning of 1988, Nokia became the largest Scandinavian information technology company through the acquisition of Ericsson's data systems division.
In 1989, Nokia conducted a significant expansion of its cable industry into Continental Europe by acquiring the Dutch cable company NKF. Nokia further ensured its spot as a leader
in telecommunications by developing and capitalising on new technologies.
Nokia was one of the key developers of GSM technology — Global System for Mobile communications — which would become the standard for digital mobile technology. By the end of the 1990s, Nokia had supplied GSM systems to more than 90 operators across the world.
In the early 1990s, Nokia, under the leadership of Jorma Ollila, made what would become a landmark strategic decision to make telecommunications its core business.
Basic industry and non-telecommunications operations — including paper, personal computer, rubber, footwear, chemicals, power plant, cable, aluminium and television businesses — were sold off between 1989-96.
What at the time seemed to be a gamble (only 15 per cent of Nokia Corporation's business activities were focused on telecommunications), proved to be an enormous success. Between 1996 and 2001, Nokia's turnover increased almost fivefold from 6.5 billion euros (Dh31 billion) to 31 billion euros (Dh147.7 billion).
Today, Nokia continues its success dividing its operations into several business groups — Devices, Services and Software, Markets, Navteq and the Corporate Development Office. Nokia Siemens Networks, a separate company created in 2006, manages the infrastructure.
It is one of the largest telecommunications suppliers in the world. Nokia and Siemens jointly own the company.
Nokia is committed to growing its business through research and development, with R&D centres in 11 countries.
The green phone
Nokia has acknowledged that the next cutting-edge product should not forsake environmental concerns, a trait that consumer electronics manufacturers too often overlook.
With a stated interest to reduce 'e-waste' (electronic waste that occurs, for example, when consumers upgrade to another phone or computer and discard the old), Nokia has launched an environmental responsibility programme
called the “we:'' initiative. Out of this initiative has come a new wave of innovative products, including a concept phone called 'Remade'. The Remade phone, made of recycled phones, rubber and tin cans, is one of the first 'green phones' set to hit the markets.
