Nokia - Nokia Market

Nokia Corporation (Finnish: Nokia Oyj, Finnish pronunciation: [ˈnokiÉ'], UK /ˈnÉ'kiÉ™/, US /ˈnoÊŠkiÉ™/), stylised as NOKIA, is a Finnish multinational communications and information technology company, founded in 1865. Nokia's headquarters are in Espoo, Uusimaa, in the greater Helsinki metropolitan area. In 2014, Nokia employed 61,656 people across 120 countries, did business in more than 150 countries, and reported annual revenues of around €12.73 billion. Nokia is a public limited company listed on the Helsinki Stock Exchange and New York Stock Exchange. It is the world's 274th-largest company measured by 2013 revenues according to the Fortune Global 500, and is a component of the Euro Stoxx 50 stock market index.

The company has had various industries in its 151-year history. It was founded as a pulp mill, but now focuses on large-scale telecommunications infrastructures, technology development, and design licensing. Nokia is also a major contributor to the mobile telephony industry, having assisted in the development of the GSM and LTE standards, and was, for a period, the largest vendor of mobile phones in the world. Nokia's dominance also extended into the smartphone industry through its Symbian platform, but was eventually overshadowed by competitors. Nokia partnered with Microsoft in 2011, agreeing to exclusively use Microsoft's Windows Phone platform on future smartphones; its mobile phone business was eventually bought by Microsoft, in a deal totaling $7.17 billion. Nokia's former CEO Stephen Elop and several other executives joined the new Microsoft Mobile subsidiary of Microsoft as part of the deal, which was completed on 25 April 2014.

After the sale of its mobile phone business, Nokia began to focus more extensively on its telecommunications infrastructure business, marked by the divestiture of its Here Maps division, its foray in virtual reality, and the acquisitions of French telecommunications company Alcatel-Lucent and digital health maker Withings in 2016. Nokia plans to return to the mobile phone market through HMD Global.

History

1865â€"1967

Nokia has a very long history, dating back to 1865, when mining engineer Fredrik Idestam established a pulp mill near the town of Tampere, Finland (then in the Russian Empire). A second pulp mill was opened in 1868 near the neighboring town of Nokia. In 1871, Idestam, together with friend Leo Mechelin, formed a shared company and called it Nokia, after the site of the second pulp mill. For the next 90 years, Nokia was a forest products and power industry company, with activities such as electricity generation.

In 1922, Nokia entered into a partnership with Finnish Cable Works (Suomen Kaapelitehdas) and Finnish Rubber Works (Suomen Gummitehdas). Finnish Cable Works manufactured telephone and electrical cables, while Finnish Rubber Works made galoshes and other rubber products. Nokia made respirators for both civilian and military use, from the 1930s well into the early 1990s.

1967â€"1990

In 1967, the three companies - Nokia, Finnish Cable Works, and Finnish Rubber Works - merged and created the new Nokia Corporation, the current form of the modern communications company. Nokia Corporation now boasted many industries, including rubber, forestry, cable, electricity, and electronics; in the early 1970s, it entered the networking and radio industry. Nokia also started making military equipment for Finland's defence forces (Puolustusvoimat), such as the Sanomalaite M/90 communicator in 1983, and the M61 gas mask first developed in the 1960s. Under its Nokia Data division, the company also made professional mobile radios, telephone switches, capacitors, chemicals and a line of personal computers called MikroMikko from 1981 to 1991; the latter was the predecessor to Fujitsu Siemens. In 1979, Nokia entered a joint venture with television maker Salora to create Mobira, laying the foundation for Nokia's future mobile phone division. In 1981, Mobira launched the Nordic Mobile Telephone (NMT) service, the world's first international cellular network and the first to allow international roaming. In 1982, Mobira launched the Mobira Senator car phone, Nokia's first mobile phone. At that time, the company had no interest in producing mobile phones, which the executive board regarded as akin to James Bond's gadgets - improbably futuristic and niche devices. It is only due to Salora-Mobira that the idea was pushed through.

In 1987, Finnish Cable Works discontinued production of cables at its Helsinki factory, effectively shutting down the sub-company. Nokian Tyres (Nokian Renkaat), a tyre producer originally formed as a division of Finnish Rubber Works in 1932, split away from Nokia Corporation in 1988. Two years later, in 1990, Finnish Rubber Works followed suit. This allowed Nokia Corporation to solely focus on communications. Jorma Ollila became CEO in 1992.

1990â€"2009

Nokia's first fully portable mobile phone after the Mobira Senator was the Mobira Cityman 900 in 1987. Nokia assisted in the development of the GSM mobile standard in the 1980s, and developed the first GSM network with Siemens, the predecessor to Nokia Siemens Network. The world's first GSM call was made by Finnish prime minister Harri Holkeri on 1 July 1991, using Nokia equipment on the 900 MHz band network built by Nokia and operated by Radiolinja. In November 1992, the Nokia 1011 launched, making it the first commercially available mobile phone. In 1998, Nokia overtook Motorola to become the best-selling mobile phone brand.

Prior to the new millennium, Nokia had few remaining industries other than the core mobile phones, such as CRT displays for personal computers (later acquired by ViewSonic), DSL modems, digital and analog set-top boxes, PC equipment and cards, and televisions. Most of these were gradually shut down in the 2000s.

Nokia's mobile phones were highly successful in Europe, Africa, Asia and Oceania. They were also one of the pioneers of mobile gaming due to the popularity of Snake, which came pre-loaded on many products. The 3310 is one of the company's most well-known products, and is noted today for its toughness. Nokia created the best-selling mobile phone of all time, the Nokia 1100, in 2003.

Nokia's first camera phone was the 7650, and its successor 3600/3650 was the first camera phone on the North American market. The company would go on to become a successful and innovative camera phone maker: the N93 in 2006 had an advanced camera with a twistable design that could switch between clamshell and a camcorder-like position; the N95 had a high-resolution 5-megapixel flash camera; N82 featured a xenon flash; N8 had a high resolution 12-megapixel sensor; the 808 PureView had a 41-megapixel sensor; the Lumia 920 implemented advanced PureView technologies. Nokia's first imaging patent was filed in 1994 but was not revealed until 2013.

In 2003, Nokia attempted to break into the portable gaming market with the N-Gage; however, the device was a failure, unable to challenge the dominant Nintendo.

Nokia's Symbian S60-based high-end phones and smartphones achieved popularity in the mid- to late-2000s. For many years, the smartphone platform led in Europe and Asia, but lagged behind Windows Mobile, Palm OS and BlackBerry in North America. One notable success of the company's was the highly advanced N95, as well as the metallic E71 in 2008.

2010â€"2014

In September 2010, it was announced that Stephen Elop would take Nokia's CEO position, replacing Olli-Pekka Kallasvuo and becoming the first non-Finnish director in Nokia's history. On 11 March 2011 Nokia announced that it had paid Elop a $6 million signing bonus as "compensation for lost income from his prior employer," on top of his $1.4 million annual salary. This was a turning point, since Elop has previously been a Microsoft employee in its Business Division. It later became clear that Microsoft was influential within Nokia, pushing forward its Windows Phone offering.

Competition picked up, however, and the Symbian platform that Nokia was working on was quickly becoming outdated and difficult for developers after the advent of iPhone OS and Android. To counter this, Nokia started to develop a successor, MeeGo, in 2010. However, in February 2011, they scrapped MeeGo and announce a partnership with Microsoft to use Windows Phone as Nokia's primary operating system, relegating Symbian to a lower priority. Although the MeeGo-based N9 was met with a highly positive reception in 2011, Nokia - apparently pressured by Microsoft - had already decided to end development on MeeGo and solely focus on its Microsoft partnership. After the announcement of the Microsoft deal, Nokia's market share deteriorated; this was due to demand for Symbian dropping when consumers realized Nokia's focus and attention would be elsewhere. Nokia's first Windows Phone flagship was the Lumia 800, which arrived in November 2011. Falling sales in 2011, which were not being improved significantly with the Lumia line in 2012, led to consecutive quarters of huge losses. By mid-2012, with the company's stock price falling below $2, Nokia almost became bankrupt.

When the Lumia 920 was announced in September 2012, it was seen by the press as the first high-end Windows Phone that could challenge rivals due to its advanced feature set. Meanwhile, the company was making gains in developing countries with its Asha series, which featured low-end products. Although Nokia's smartphone market share recovered in 2013, it was still not enough to improve the dire financial situation: the company had already been undergoing huge losses for two years, and in September 2013 announced the sale of its mobile and devices division to Microsoft. The sale was positive for Nokia to stop further disastrous financial figures, as well as for Microsoft's CEO Steve Ballmer, who wanted Microsoft to produce more hardware and turn it into a devices and services company. The sale was completed in April 2014, with Microsoft Mobile becoming the successor to Nokia's mobile devices division.

In July 2013, Nokia purchased Siemens' stake in the Nokia Siemens Networks joint venture for $2.2 billion, turning it into a wholly owned subsidiary called Nokia Solutions and Networks, until being rebranded as simply Nokia Networks shortly after. During Nokia's financial struggles, its profitable networking division with Siemens provided much of its income; thus, the purchase proved to be positive, particularly after the sale of its mobile devices unit.

2014â€"present

After the sale of its mobile devices division, Nokia started to focus on network equipment through Nokia Networks.

In October 2014, Nokia and China Mobile signed a US$970 million framework deal for delivery between 2014 and 2015.

On 17 November 2014, Nokia Technologies head Ramzi Haidamus disclosed that the company planned to re-enter the consumer electronics business as an original design manufacturer, licensing in-house hardware designs and technologies to third-party manufacturers. Haidamus stated that the Nokia brand was "valuable" but "is diminishing in value, and that's why it is important that we reverse that trend very quickly, imminently." The next day, Nokia unveiled the N1, an Android tablet manufactured by Foxconn, as its first product following the Microsoft sale. Haidamus emphasized that devices released under these licensing agreements would be held to high standards in production quality, and would "look and feel just like Nokia built it." Nokia CEO Rajeev Suri stated that the company planned to re-enter the mobile phone business in this manner in 2016, following the expiration of its non-compete clause with Microsoft.

According to Robert Morlino, the spokesman of Nokia Technologies, Nokia planned follow the brand-licensing model rather than direct marketing of mobile devices due to the sale of its mobile devices division to Microsoft. The company took aggressive steps to revitalize itself, evident through its hiring of software experts, testing of new products, and seeking of sales partners. On 14 July 2015, CEO Rajeev Suri confirmed that the company would make a return to the mobile phones market in 2016.

On 28 July 2015, Nokia announced OZO, a 360-degrees virtual reality camera, with eight 2K optical image sensors. The division behind the product, Nokia Technologies, claimed that OZO would be the most advanced VR film-making platform. Nokia's press release stated that OZO would be "the first in a planned portfolio of digital media solutions," with more technologic products expected in the future. OZO was fully unveiled on 30 November in Los Angeles. The OZO, designed for professional use, was intended for retail for US$60,000; however, its price was decreased by $15,000 prior to release, and is listed on its official website as $40,000.

On 14 April 2015, Nokia confirmed that it was in talks with the French telecommunications equipment company Alcatel-Lucent regarding a potential merger. The next day, Nokia officially announced that it had agreed to purchase Alcatel-Lucent for €15.6 billion in an all-stock deal. CEO Rajeev Suri felt that the purchase would give Nokia a strategic advantage in the development of 5G wireless technologies, and the acquisition aimed to create a stronger competitor to the rival firms Ericsson and Huawei, whom Nokia and Alcatel-Lucent had surpassed in terms of total combined revenue in 2014. Nokia shareholders hold 66.5% of the new combined company, while Alcatel-Lucent shareholders hold 33.5%. The Bell Labs division was to be maintained, but the Alcatel-Lucent brand would be replaced by Nokia. In October 2015, following approval of the deal by China's Ministry of Commerce, the merger awaited approval by French regulators. Despite the initial intent of selling the submarine cable division separately, Alcatel-Lucent later declared that it would not. The merger closed on 14 January 2016.

On 3 August 2015, Nokia announced that it had reached a deal to sell its Here digital maps division to a consortium of BMW, Daimler AG and Volkswagen Group for €2.8 billion. The deal closed on 3 December 2015.

On 26 April 2016, Nokia announced its intent to acquire connected health device maker Withings for US$191 million. The company was integrated into a new Digital Health unit of Nokia Technologies.

On 18 May 2016, Microsoft Mobile sold its Nokia-branded feature phone business to HMD Global, a new company founded by former Nokia executive Jean-Francois Baril, and an associated factory in Vietnam to Foxconn's FIH Mobile subsidiary. Nokia subsequently entered into a long-term licensing deal to make HMD the exclusive manufacturer of Nokia-branded phones and tablets outside of Japan, operating in conjunction with Foxconn. The deal also granted HMD the right to essential patents and feature phone software. HMD subsequently announced the Android-based Nokia 6 smartphone, targeted towards China, in January 2017. At Mobile World Congress, HMD additionally unveiled the Nokia 3 and Nokia 5 smartphones, as well as a re-imagining of Nokia's classic 3310 feature phone.

Operations

Nokia is a public limited-liability company listed on the Helsinki and New York stock exchanges. Nokia has played a very large role in the economy of Finland, and it is an important employer in the country, working with multiple local partners and subcontractors. Nokia contributed 1.6% to Finland's GDP and accounted for about 16% of the country's exports in 2006.

Nokia comprises four business groups.

Nokia Networks

Nokia Networks, formerly known as Nokia Siemens Networks (NSN) and Nokia Solutions and Networks (NSN), is a multinational data networking and telecommunications equipment company headquartered in Espoo, Finland. It is the world's fourth-largest telecoms equipment manufacturer, measured by 2011 revenues (after Ericsson, Huawei and Alcatel-Lucent). It has operations in around 150 countries.

The NSN brand identity was launched at the 3GSM World Congress in Barcelona in February 2007 as a joint venture between Nokia (50.1%) and Siemens (49.9%), although it is now wholly owned by Nokia. It provides wireless and fixed network infrastructure, communications and networks service platforms, and professional services to operators and service providers. It focuses on GSM, EDGE, 3G/W-CDMA, LTE and WiMAX radio access networks, supporting core networks with increasing IP and multiaccess capabilities and services.

In July 2013, Nokia bought back all shares in Nokia Siemens Networks for a sum of US$2.21 billion and renamed it Nokia Networks.

Nokia Technologies

Nokia Technologies is a division of Nokia that develops and licenses technology and the Nokia brand. Its focuses are imaging, sensing, wireless connectivity, power management and materials, and other areas such as the IP licensing program. It consists of three labs: Radio Systems Lab, in areas of radio access, wireless local connectivity, and radio implementation; Media Technologies Lab, in areas of multimedia and interaction; and Sensor and Material Technologies Lab, in areas of advanced sensing solutions, interaction methods, nanotechnologies and quantum technologies. Nokia Technologies also provides public participation in its development through the Invent with Nokia program.

In November 2014, Nokia Technologies launched its first product, the Nokia N1 Android 5.0 tablet computer manufactured by Foxconn.

In July 2015, Nokia Technologies introduced a VR camera called OZO, designed for professional content creators and developed in Tampere, Finland. With its 8 synchronized shutter sensors and 8 microphones, the product can capture stereoscopic 3D video and spatial audio.

Following May 2016, Nokia Technologies' research and development team acts as the base for future Nokia-branded devices created by HMD Global.

On 31 May 2016, the Digital Health unit was founded. It is led by Cédric Hutchings, former CEO of Withings, which Nokia acquired.

On 31 August 2016, Ramzi Haidamus announced he would be stepping down from his position as president of Nokia Technologies. Brad Rodrigues, previously head of strategy and business development, assumed the role of interim president.

Alcatel-Lucent

Nokia bought a share of 80% of Alcatel-Lucent, and took over the management control of the company.

Nokia Bell Labs

Bell Laboratories became a subsidiary of Nokia Corporation after the takeover of Alcatel-Lucent. It was subsequently renamed Nokia Bell Labs.

Corporate affairs

Corporate governance

The control and management of Nokia is divided among the shareholders at a general meeting and the Nokia Leadership Team (left), under the direction of the board of directors (right). The chairman and the rest of the Nokia Leadership Team members are appointed by the board of directors. Only the Chairman of the Nokia Leadership Team can belong to both the board of directors and the Nokia Leadership Team. The board of directors' committees consist of the Audit Committee, the Personnel Committee, and the Corporate Governance and Nomination Committee.

The operations of the company are managed within the framework set by the Finnish Companies Act, Nokia's Articles of Association, and Corporate Governance Guidelines, supplemented by the board of directors' adopted charters.

Former corporate officers

Stock

Nokia is a public limited liability company and is the oldest company listed under the same name on the Helsinki Stock Exchange, beginning in 1915. Nokia has had a secondary listing on the New York Stock Exchange since 1994. Nokia shares were delisted from the London Stock Exchange in 2003, the Paris Stock Exchange in 2004, the Stockholm Stock Exchange in 2007 and the Frankfurt Stock Exchange in 2012. Due to the acquisition of Alcatel-Lucent in 2015, Nokia listed its shares again on the Paris Stock Exchange and was included in the CAC 40 index on 6 January 2016.

In 2007, Nokia had a market capitalization of €110 billion; by 17 July 2012 this had fallen to €6.28 billion, and by 23 February 2015, it increased to €26.07 billion.

Corporate culture

Nokia's official corporate culture manifesto, The Nokia Way, emphasizes the speed and flexibility of decision-making in a flat, networked organization.

The official business language of Nokia is English. All documentation is written in English, and is used in official intra-company communication.

In May 2007, Nokia redefined its values after initiating a series of discussion across its worldwide branches regarding what the new values of the company should be. Based on the employee suggestions, the new values were defined as: Engaging You, Achieving Together, Passion for Innovation, and Very Human.

In August 2014, Nokia redefined its values again after the sale of its Devices business. The new values were defined with the key words respect, achievement, renewal and challenge.

Headquarters

The Nokia House was the head office building of Nokia Corporation, located in Keilaniemi, Espoo. The two southernmost parts of the building were built in the early 1990s and the third, northernmost part was built in 2000. Around 5000 employees work in the premises.

In December 2012, Nokia announced that it had sold its head office building to Finland-based Exilion for €170 million and was leasing it back on a long term basis. The building was later sold to Microsoft as part of the sale of the mobile phone business in April 2014 and renamed to Microsoft Talo.

Since the sale, Nokia's headquarters are in Karaportti, Espoo, Finland.

Logos

Controversies

NSN's provision of intercept capability to Iran

In 2008, Nokia Siemens Networks, a joint venture between Nokia and Siemens AG, reportedly provided Iran's monopoly telecom company with technology that allowed it to intercept the Internet communications of its citizens. The technology reportedly allowed Iran to use deep packet inspection to read and change the content of emails, social media, and online phone calls. The technology "enables authorities to not only block communication but to monitor it to gather information about individuals, as well as alter it for disinformation purposes."

During the post-election protests in Iran in June 2009, Iran's Internet access was reported to have slowed to less than a tenth of its normal speeds, which experts suspected was due to the use of the interception technology.

In July 2009, Nokia began to experience a boycott of their products and services in Iran. The boycott was led by consumers sympathetic to the post-election protest movement and targeted companies deemed to be collaborating with the regime. Demand for handsets fell and users began shunning SMS messaging.

Nokia Siemens Networks asserted in a press release that it provided Iran only with a "lawful intercept capability solely for monitoring of local voice calls" and that it "has not provided any deep packet inspection, web censorship, or Internet filtering capability to Iran."

Lex Nokia

In 2009, Nokia heavily supported a law in Finland that allows companies to monitor their employees' electronic communications in cases of suspected information leaking. Nokia denied rumors that the company had considered moving its head office out of Finland if laws on electronic surveillance were not changed. The Finnish media dubbed the law Lex Nokia because it was implemented as a result of Nokia's pressure.

The law was enacted, but with strict requirements for implementation of its provisions. No company had used its provisions prior to 25 February 2013, when the Office of Data Protection Ombudsman confirmed that city of Hämeenlinna had recently given the required notice.

Nokiaâ€"Apple patent dispute

In October 2009, Nokia filed a lawsuit against Apple Inc. in the U.S. District Court of Delaware claiming that Apple infringed on 10 of its patents related to wireless communication including data transfer. Apple was quick to respond with a countersuit filed in December 2009 accusing Nokia of 11 patent infringements. Apple's General Counsel, Bruce Sewell went a step further by stating, "Other companies must compete with us by inventing their own technologies, not just by stealing ours." This resulted in a legal battle between the two telecom majors with Nokia filing another suit, this time with the U.S. International Trade Commission (ITC), alleging Apple of infringing its patents in "virtually all of its mobile phones, portable music players and computers." Nokia went on to ask the court to ban all U.S. imports of the Apple products, including the iPhone, Macintosh, and iPod. Apple countersued by filing a complaint with the ITC in January 2010.

In June 2011, Apple settled with Nokia and agreed to an estimated one time payment of $600 million and royalties to Nokia. The two companies also agreed on a cross-licensing patents for some of their patented technologies.

Alleged tax evasion in India

Nokia's Indian subsidiary has been charged with non-payment of TDS and transgressing transfer pricing norms in India. The unpaid TDS of ₹30 billion, accrued during a course of six years, was due to royalty paid by the Indian subsidiary to its parent company.

See also

• History of Nokia
• Jolla â€" a company started by former Nokia employees which develops Linux Sailfish OS, a continuation of Linux MeeGo OS.
• Twig Com â€" originally Benefon, a historical mobile phone manufacturer started by former Nokia people.
• Microsoft Mobile â€" The re-branding of Nokia Device and Services division after acquired by Microsoft.
• HMD Global - The post-Microsoft continuation of Nokia-branded devices.

References

Further reading

External links

• Nokia