THE RISE AND FALL OF NOKIA
HISTORY:
· Nokia’s history dates back to 1865, when a mining engineer Fredrik Idestam, set up his first wood pot mill in southern Finland, a few years later he opened a second mill on the banks of the Nokianvirta river, this river inspired him to name his company ‘Nokia’.
· Soon Nokia expanded into other industries such as rubber, cables, tires, TV, etc.
· In 1960’s, there was a great deal going on in the world social, political and new ways of thinking were gaining momentum in diverse places.
· Overshadowing all this was a something particularly ominous, the cold war, in the mid to late 1960’s the conflict wasn’t ice cold, a nuclear war was actually a possibility, the USSR were testing their bombs and the USA were testing their bombs.
· This created tension to the whole world, even a neutral country of Finland felt this tension and were preparing for the worst.
· The Finnish government wanted military research into radio telephone communications to help their country realize their full potential of reliable military communication.
· A little company called Nokia got the contract, from the expertise developed in communication and later developed into a civilian radio car telephone network that spanned the whole country by the start of the 1970’s.
· The system was very primitive by today’s standards because they actually had to take turns to speak.
· The real book for Nokia started in the 1980’s, the company began to expand into mass production methods of manufacturing, which meant added features, less cost, smaller size and cheaper price.
· The company exported 50% of their products and expanded globally by 1985.
· The Finnish company finally hit the big time when they entered into the US market by teaming up with Tandy, during this time the concept of a mobile phone was incredible, you didn’t have to slot money into the machine to make a call and you didn’t have to wait in a pay phone line.
· The vastness of the market was soon realized when sales exceeded prediction by 3000%!
· The secret to Nokia’s success was their ability to tailor to different markets in the mobile industry while keeping the efforts going in the other industries.
· In 1987, Nokia created the ‘Mobira Cityman 900’; it was the first Nokia phone to make headlines due to the fact that Mikhail Gorbachev, the leader of the Soviet Union of that time was spotted using the phone during press conferences.
· The slogan for the Cityman was “Straight connection for those of you who need independence”.
· In 1988–1989, Nokia found itself in crises, at this time the Soviet Union collapsed and there was a major recession in Europe, so the demand for Nokia’s diverse product seemed to drop overnight.
· Jorma Ollila, a former Citibank banker came to take over as the CEO in 1992, as a banker he knew a thing or two about management, he made one decision that changed the company’s future for the next 15 years, he decided to shut of extra proceed and focus directly in mobiles.
NOKIA’S GOLDEN PERIOD:
· The 1990’s was a special time for mobile technologies, the general population can keep in contact with each other for the first time all of this was due to Nokia’s diverse range of innovative and indestructible phones.
· At this time there were no selfie obsession, instagram, face book, you even didn’t have to charge your phone that often.
· The 90’s were the golden decade for Nokia, as it now streamlined its focus to mobile phones only.
· The first mile stone arrived in 1992, in the form of ‘Nokia 1011’; this was the world’s first GSM (Global System of Mobile Communications) digital phone.
· The first GSM networks were 2G which replaced the old analog 1G system.
· The ‘Nokia 2110’ released in 1994, it was a sleek design and the people were stunned, it had address books, missed call and text indicators and was the first phone to be features with the famous ringtone which was composed over 100 years ago, it was the first phone to be able to both send and receive text messages.
· In 1996, the ‘Nokia 9000 communicator’, it took IBM’s 1993 concept of smart phone even further by adding a full QWERTY keyboard, web browsing, email, fax, spreadsheet, etc.
· The only problem with the ‘Nokia 9000 communicator’ was that it hit the market too early and the price was high ($800).
· In 1997 Nokia released the ‘6110’; this was the first phone to ever feature the legendary game ever made ‘Snake’.
· By 1998, Nokia overtook Motorola as the number one phone manufacturer in the world.
· Since Nokia was on the software side of things it developed a mobile operating system and they believed that having an active role in software development could be beneficiary to the company.
· They got on board with software called Symbian. Even though Symbian was heavily used by Nokia it wasn’t their sole creation.
· Symbian originated from Epoc an operating system created in the 1980’s, it was a major joint venture between Ericsson, Motorola and Nokia.
· By 1999, the ‘Nokia 3210’ was the bombshell, it made technology cool and social able, this phone actually accommodated for consumer consumption with multiple covers, it featured two toned picture messages, it was very cheap, which made it available to teenagers born in the 1980’s.
· In the early 2000’s Nokia just had hit after hit with phones like ‘5110’ in 2000 and the ‘1110’ in 2003, 2002 was a good year for Nokia as they released ‘6650’ the world’s first 3G phone and the ‘7650’Nokia’s first camera phone.
THE FALL OF NOKIA:
· From 2003 Nokia began to experiment with different designs.
· Nokia’s first major mistake occurred in 2003, during this year games in general were pretty hot, the PS2 and X box were hitting their prime time and the Game boy advance just blew the portal game market in 2002.
· Nokia launched the infamous N-Gage, it was clumsy to use either as a phone or a gaming device.
· In 2004, US manufacturer Motorola scored a worldwide hit with its very thin flip phone
· In 2005, Nokia became so popular that they were the number one digital camera brand worldwide.
· In 2006, Olli-Pekka Kallasvuo took over management and merged Nokia’s smart phone and basic phone operations, instead of leaving basic phones behind and moving ahead they focused more on the tradition phones, Nokia went backwards. This change in management marked the beginning of the end of Nokia’s amazing run.
领英推荐
· In the mid 2000’s Nokia’ N series was the flagship product line, the ‘n95’ had all the makings of the modern smart phone.
· In 2007, Nokia’s major blow came when Apple released their i-phone, it was a phone with full touch interface, and the secret to its success was its capacity of touch screen display and desktop routes in its OS. Suddenly the n95 didn’t look so impressive.
· In 2008, Google released their first android phone, Nokia responded with the old touch screen 5800 xpressmusic, it was a commercial success but the critics viewed it negatively for its poor software implementation.
· Frank Nuovo, former vice president and chief designer of Nokia, he resigned in 2006 when the management changed. He said that Nokia was a very big company that started to maintain its position more than innovates for new opportunities even if all the opportunities were in front of them.
· Nokia’s engineers stated that the i-phone was way too expensive to manufacture and only worked on 2G network, the i-phone ended up topping the sales.
· Alastair Curtis, chief designer from 2006–2009, said that Nokia were spending more time doing internal politics than design.
· The chief executive of chip manufacturer Qualcomm, Paul E. Jacobs, started working with Nokia in 2008; his main complaint was that Nokia took too much time (6–9 months assessing an opportunity) when working on strategies.
· In 2010, Stephen Elop took over the helm of Nokia. In 2005, he worked for Macro media which got bought by Adobe during his time as CEO and from 2008–2010 he worked for Microsoft working in Microsoft office products.
· At the time of arrival of Elop, Nokia was spending 5 billion dollars on research and development.
· Mr.Elop sifted through data and visited labs around the world to personally terminate projects that weren’t core priorities.
· 100 engineers and product managers from different offices around the world were all called into a hotel in Germany for a meeting, out these meeting 2 OS’s emerged, a new version of Symbain and MeeGo.
· This software arrived in the Nokia ‘n9’; the app store was severely undeveloped when Apple’s and Google’s app stores were very fast.
· The MeeGo OS discontinued in 2012.
· In February 2011, Stephen Elop and Microsoft CEO Steve Ballmer jointly announced a major partnership between Nokia and Microsoft.
· Nokia first unveiled the Windows Phone 7 on October 26th, 2011; they were the ‘Lumia 710’ and ‘Lumia 800’, which was quickly followed by ‘Lumia 900’.
· On April, 2012, Samsung overtook Nokia as the largest phone manufacturer in the world.
· In 2013 Nokia introduced ‘Lumia 1020’, this phone was all about the camera, a 41 megapixel with a Symbian based 808 pure view technology, but it was still criticized for the design, apps and the camera.
· In 2013, Nokia made an operating loss of 115 million Euros with revenue falling 24%.
· Since, 2011 Nokia sustained 4.1 billion Euros worth of operating loss.
· On 3rd September, 2013, Microsoft announced that it would acquire Nokia’s mobile phone division in a deal totaling 7 billion US dollars, Elop stepped down as Nokia’s CEO and rejoin Microsoft as the head of devices.
· It was reported that Elop got an 18.8 million Euro bonus after he sold Nokia to Microsoft and stepped down the CEO.
· In October 2014, Microsoft officially announced that it would phase out the Nokia brand in its promotion of Lumia smart phone, it would now be known as Microsoft Lumia, and this was the end of Nokia’s brand.
MINI SUMMARY:
1. How was Nokia formed?
Ans: Nokia’s history dates back to 1865, when a mining engineer Fredrik Idestam, set up his first wood pot mill in southern Finland, a few years later he opened a second mill on the banks of the Nokianvirta river, this river inspired him to name his company ‘Nokia’. The Finnish government wanted military research into radio telephone communications to help their country realize their full potential of reliable military communication. A little company called Nokia got the contract, from the expertise developed in communication and later developed into a civilian radio car telephone network that spanned the whole country by the start of the 1970’S.The Company exported 50% of their products and expanded globally by 1985. The vastness of the market was soon realized when sales exceeded prediction by 3000%! The secret to Nokia’s success was their ability to tailor to different markets in the mobile industry while keeping the efforts going in the other industries. The slogan for the Cityman was “Straight connection for those of you who need independence”. Jorma Ollila, a former Citibank banker came to take over as the CEO in 1992.
2. How did Nokia dominate the market?
Ans: The 90’s were the golden decade for Nokia, as it now streamlined its focus to mobile phones only. The first mile stone arrived in 1992, in the form of ‘Nokia 1011’; this was the world’s first GSM (Global System of Mobile Communications) digital phone. The first GSM networks were 2G which replaced the old analog 1G system. By 1998, Nokia overtook Motorola as the number one phone manufacturer in the world. By 1999, the ‘Nokia 3210’ was the bombshell, it made technology cool and social able, this phone actually accommodated for consumer consumption with multiple covers, it featured two toned picture messages, it was very cheap, which made it available to teenagers born in the 1980’s.From 2003 Nokia began to experiment with different designs.
3. How was Nokia dominated in the market?
Ans: Nokia’s first major mistake occurred in 2003, during this year games in general were pretty hot, the PS2 and X box were hitting their prime time and the Game boy advance just blew the portal game market in 2002.In 2004, US manufacturer Motorola scored a worldwide hit with its very thin flip phone In 2005, Nokia became so popular that they were the number one digital camera brand worldwide. In 2006, Olli-Pekka Kallasvuo took over management and merged Nokia’s smart phone and basic phone operations. In 2007, Nokia’s major blow came when Apple released their i-phone. In 2008, Google released their first android phone. Frank Nuovo, former vice president and chief designer of Nokia, he resigned in 2006 when the management changed. Alastair Curtis, chief designer from 2006–2009, said that Nokia were spending more time doing internal politics than design. In 2010, Stephen Elop took over the helm of Nokia. At the time of arrival of Elop, Nokia was spending 5 billion dollars on research and development. In February 2011, Stephen Elop and Microsoft CEO Steve Ballmer jointly announced a major partnership between Nokia and Microsoft. On April, 2012, Samsung overtook Nokia as the largest phone manufacturer in the world. In 2013, Nokia made an operating loss of 115 million Euros with revenue falling 24%.Since, 2011 Nokia sustained 4.1 billion Euros worth of operating loss. On 3rd September, 2013, Microsoft announced that it would acquire Nokia’s mobile phone division in a deal totaling 7 billion US dollars, Elop stepped down as Nokia’s CEO and rejoin Microsoft as the head of devices.
REMIX:
· It has been repeatedly demonstrated that being the first to a good idea is no guarantee of commercial success.
· This is a lesson to all of us who are thinking to ever run a business, be diligent, be very aware of your competitive surroundings and most of all is prepared to swallow your pride in order to usher in a positive change.
· This multinational company started from just one man’s paper mill and lasted for over 100 years.
· Just goes to show if you do what’s right you can do a lot.
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