The Nokia Story: The Rise And Fall Of The Finnish Telecom Giant

Nokia wasn’t always a successful telecommunications company, they were initially a pulp mill before they got into the rubber business. The company was making flexible cables at the time and when the latter part of the 20th century came, Nokia expanded their products creating mobile phone devices to cater to the demand of mobile phones. Soon, they became the leading brand globally for mobile phones.

With the massive success of Nokia, it was such a waste that they weren’t able to keep up to the competition that soon arise. So what exactly happened to the telecommunications company?

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Nokia Started As A Pulp Mill Company



 Nokia is Finnish multinational company that was established in the 1865. Although the main headquarters of the company is located in Espoo, Finland, their first branch was located in the Tampere region of Pirkanmaa. Nokia was founded by Finnish-Swede mining engineer Fredrik Idestam, but it started as a pulp mill that started on the shores of Tammerkoski rapids.

In 1871, Idestam decided to form a shared company called Nokia Company with his good friend Leo Mechelin. After over thirty years, Idestam decided to retire from the company and Mechelin was left to run it in 1896. After six years of running the company, Mechelin saw the earning potential of electricity generation and decided to give into that industry in 1902.

In 1922, Nokia decided to partner with the company specializing  and decided to meet the growing demand for respirators for civilian and military use. They made these respirators until the early 1990s. Over the years, the company has efficiently adapted into the growing needs of the market. Over the last 150 years since their establishment, they’ve dived into several industries.

By the time the company reached 1998, they started developing and producing mobile phones. Nokia made a significant contributions to the telecommunications industry that assisted into the development of GSM, 3G and LTE. The company became the largest distributor of mobile phones and smartphones worldwide.

The Company Made Billions In Profits


Jorma started getting rid of several divisions including the power business. This strategy led to a massive success that resulted to billions of profits. Nokia reported a massive profit of $4 billion by 1999 despite selling expensive mobile phones. During that year, the company was fully operational in over 140 countries. By the time the company reached 2000, they were employing over 55,000 people and had a massive share of 30% in the mobile phone industry.

Nokia continued their domination in the mobile phone industry as they continously innovated their product and adapted to the needs of the market. By 2006, Jorma Ollila decided to retire as CEO and stepped down to become the company’s chairman. He was then replaced Olli-Pekka Kallasvuo.

A Series Of Poor Management Decisions Leading To Nokia’s Downfall


With the Apple and Android’s popularity on the rise, failed to adapt to the growing needs of the market. When Apple’s iPhone was starting to get some interest from the public, Nokia confidently brushed off this threat and continued releasing the same old phones they used to sell.

The company also failed to step up their marketing strategies. While Apple and Android phones make a big announcement on the improvement of their products each year, Nokia fell flat in marketing their flagship phones accordingly. Once the competition became fiercer, the company started to crumble inside as it was reported that the company stopped coordinating properly between departments which led to their ultimate failure.

This has led to Nokia giving up on the battle. In 2011, partnered with Microsoft to address the competition brought about by iOS and Android operating systems. However after three years, Nokia decided to sold their mobile and devices devices division to Microsoft in 2014.

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Sources: Predictable Profits, The Guardian, Reuters

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