For decades, Nokia was the market leader in mobile devices and probably the company that best defined the mobile phone industry. By the late 2000s however, the Finnish company was in peril as its position as the leading mobile phone manufacturer became increasingly threatened by lower-cost Asian manufacturers.
The end finally came in 2013, when Microsoft acquired Nokia’s Device and Service businesses for €7.2 billion and 2 years after, the latter sold its HERE mapping unit to a group of German car-makers. In the same year, Nokia pulled out of the mobile phone business entirely.
In this article, we will look at the success of the mobile pioneer — and what went wrong.
Although Nokia was known for its mobile phones, the Finnish multinational company was originally founded as a paper mill in 1865 and was best known for its rubber products. In 1871 when Fredrik Idestam, a mining engineer, named the company Nokia, inspired by the location of the company’s second mill which was at Nokianvirta river.
After three decades, the company ventured into electricity generation and that’s when Finnish Rubber Works acquired Nokia to access their hydro-power resources. In 1922, the newly-formed conglomerate also acquired the already established Finnish Cable Works company.
The three companies merged in 1967 and the Nokia Corporation was born. The company was known for producing products such as paper, rubber, electronics and cabling they later began to produce toilet paper, car and bicycle tires, TVs, communication cables, PCs, robotics, military equipment, and rubber footwear.
In 1979, the corporation entered a joint venture with Salora, the leading Scandinavian colour TV manufacturer at the time, to establish Mobira Oy, a radiotelephone company. This venture kickstarted the birth of the world’s first international cellular system designed for Nordic countries (Finland, Sweden, Norway, Denmark) and was dubbed Nordic Mobile Telephone network.
Shortly after, the world’s first car-phone called Mobira Senator was launched by the company and in 1984, Nokia acquired Salora and changed its name to Nokia-Mobira Oy. This acquisition led to the development and launch of many of the world’s first mobile devices.
Below is a timeline of the products Nokia launched during its early days as it began its rise to become the global leader of mobile phone manufacturing:
1987 - Nokia introduced Mobira Cityman 900, the world’s first compact and hand-held mobile telephone. It was sold at a hefty price of $5,456 and weighs around 800g yet it got popular among consumers and sold out fast.
1989 - 1990 - Nokia’s top leaders decided to shift its focus solely to the telecommunications market and Nokia-Mobira Oy became Nokia Mobile Phones.
1991 - Finnish Prime Minister Harri Holkeri made the world’s first GSM (Global System for Mobile Communication) call using a Nokia equipment.
1992 - Nokia 1110, also known as Mobira Cityman 200, the company’s first hand-held GSM phone was launched. The device could store up to 99 contact numbers and could be used for 90 minutes of talk time.
1994 - Nokia launched its blockbuster 2100 phone series, which sold about 20 million handsets worldwide. This was also the first set of Nokia phones to feature the iconic Nokia ringtone.
1995 - Nokia introduced an all-in-one phone that allowed users to send emails, fax, browse the internet, as well as word processing and spreadsheet capabilities. The phone was called the Nokia 9000 communicator and came with a price tag of $800. However, it didn’t become commercially successful despite a dedicated following.
In the same year, the company launched Nokia 8810 slider phone, popularly known as “the banana phone”, the phone featured in the popular sci-fi film The Matrix.
1998 - Nokia’s 6100 series gained spectacular success by selling nearly 41 million cellular phones — dethroning Motorola as the world’s top cellular phone maker. The Nokia 6110 under the 6100 series was the first phone with the classic Snake game pre-installed.
This was also the year the first phone without an external antenna or Nokia 8810 was launched. It was also one of the first phones to feature a chrome slider shell.
1999 - Nokia 3210, one of the most popular and successful phones in history with around 160 million units sold worldwide, was launched. The handset was sold in six colour variants and can handle an impressive talk time of four to five hours. It also offered extra ringtones, games and allowed users to send picture messages via SMS.
2000’s: A New Era Of Mobile Phones
By the start of the 2000, Nokia was considered the global leader in the mobile phones market but not long after, the decade brought about a set of challenges that led to the fall of the company.
The 2000s was a period of technological evolution where wireless and internet technology converge and the multimedia capabilities of 3rd generation wireless technology developed.
As a response to these technological changes, Nokia started creating sophisticated multimedia handsets and low-end devices. In March 1999, Nokia announced the launch of Nokia 3210, a GSM cellular phone with cutting-edge features such as pre-installed games, customisable ringtones, internal antenna and a competitive price point.
These notable features led to the commercial success of the product particularly among the younger generation. It is also considered as one of the most significant handsets the company has developed.
But the most iconic of them all? The Nokia 3310. Released in the fourth quarter of 2000 to replace Nokia 3210, it sold 126 million units sold worldwide, making it the biggest selling mobile phone to date.
Because of its durability and remarkable features that were rare for the time, (i.e: calculator, stopwatch, 4 pre-installed games and more), it gained a cult status and is still widely regarded by many as “the greatest phone of all time”.
The next year, the company launched the Nokia 7650, the first phone to feature a built-in camera and a full-colour display.
It was then followed with the launch of Nokia 6650 and Nokia 3650 in 2002. The latter was the first phone to feature a video recorder. The next year, a budget-friendly phone that sold a whopping 250 million units worldwide was sold and became the best-selling phone of the year — the Nokia 1100.
Midway through the decade, Nokia introduced its N-series of phones that include the N70, N90 and N91 as the first members of the series with N8 launching later in 2010.
In the year 2007, Apple’s release of its first generation iPhone established an entirely new category of mobile phones — the smartphone — that become immensely and immediately popular. Although most people didn’t realise it at the time, it would signal the beginning of the end for Nokia’s market dominance.
The Fall of Nokia
In 2001 Nokia’s profits began to crumble due to the slowdown in the mobile phone market. This downfall turned out to be short-lived but three years later, the company’s market share once again started declining. Although Nokia’s success continued, it’s unrivalled dominance was certainly over, as the mobile phone market became increasingly crowded.
As a response to the growing popularity of touch-screen phones, Nokia released the 5800 Xpress Musicin 2008 that was the first to run the touch-driven Symbian v9.4 (S60 5th Edition). Unfortunately, the model was not able to create a die-hard following.
This was the first of many hiccups that Nokia experienced throughout the decade. A new set of challenges arose for the Finnish company until it reached its unfortunate downfall in 2013:
2007 - The company had to recall a massive 46 million faulty cell-phone batteries that affected a large part of Nokia’s device portfolio
2008 - While iPhone’s sales skyrocketed at around 330%, Nokia’s profit plummeted down to 30% while sales decreased by 3.1%
2009 - 1,700 Nokia employees were laid off worldwide. The struggling company finally admitted that due to its slow reaction to the constant changes of the market, and the likes of Apple and Blackberry started to take over.
2011 - Nokia announced a strategic partnership with Microsoft to make the Windows phone the company’s main mobile OS. Later during the year, the partnership bore the Lumia 800 and Lumia 710 smartphones.
2012 - The company suffered a whopping €1.3 billion operating loss which led to another round of job cuts, but this time affecting almost 10,000 employees.
2013 - Nokia announced that it was selling its Device and Services division to Microsoft including the Finnish company’s patent and mapping services.
Due to Nokia’s failing to adapt to the rapid change of the mobile phone market, the mobile phone giant was brought down. The errors in their strategy and the delay in embracing the smartphone culture cost them their dominant position in the market.
Despite this epic fall, Nokia remain part of the history of mobile phones. In fact, we might even see a comeback from the Nokia in the years to come as more people experience the Nokia nostalgia, added to the fact that the Nokia brand remains popular.