NOKIA
The Nokia Revolution: The Story of an Extraordinary Company That
Transformed an Industry.
Dan Steinbock. AMACOM, NY. 2001
1865: Frederik Idestam founds a mill for manufacturing pulp p6
1890's: got into electrical power generation. p10.
1920's: forestry made up 90% of Finnish exports, 1/3 of GNP. p13
Finnish Rubber Works, Suomen Gummitehdas Osakeyhtio(..) founded 1898.
p14 coalition formed between Nokia,
FRW and Finnish Cable Works.
In post-war era, half of FCW production went to Soviet Union. This was
war raparations from Finland to Soviet
Union. After the reparation years, Soviet Union continued to
import heavily from Finland. Continued to
collapse of Soviet Union in 1990's. FCW was largest of
coalition. Produced cables for phone and power lines,
rubber works made galoshes, tires, etc. p22.
1967: three companies merged in 1967, new company Oy Nokia Ab p26
Policy decisions in Finland dominated by the Soviet Union,
Finlandization p 38
1973 oil supply crisis began Nokia's executives looking into becoming
electronics company. p39
In 1960's had an electronics department , 1969: first componay to
use pulse code modulation in phone equipment,
an early step into digital p41.
Electronics devision took a lot of investment and did not make a profit
until the 1980's. In t980 FIM 180 million
invested in division, 12% of all Finnish RD investment that year, and
would increase to FIM 400 million by
mid 80's p46.
Acquisition spree in early 1980's, Salora Oy, TV maker, Luxor AB,
electronics and computer in Sweden, Oceanic,
French television, others. Bought Mobira, Finnish mobile phone
company. 1982-1987 Nokia market
value tripled from FIM 2.275 to 8.029 billion; largest in Finland, had
become electronics giant. Sprawling
company, in paper pulp, rubber, electrical power, consumer electronics,
27,600 employees in 1987 pg 50
In 1988, electronics 59%, cable 18%, forestry 14%, rubber 8%. 44,600
employees, revenues of FIM 21.8 billion p65
kari H. Kairamo 1932-1988, senior vp for international affairs 1970,
managing director 1977,
chief executive 1986. Management by perkele (Satan). p34
Encouraged internationalization, overseas employees and
markets p34, believed in following example of Japan and Asian Tigers by
growth through overextension. p34 Encouraged
speed in bringing new technology to market p36. Kairamo recieves
a lot of the credit for Nokia's reshaping in the
1980's. Hanged self Dec 11 , 1988.p69
Kairamo's successor Simo Vuorilehto, an engineer from pulp and paper
industry, restructured, sold off industrial units.
Debt of $2.6 billion, debt-to-equity ratio of 65 %, not
uncommon.p68 Common stock average annual growth only 1%
1984 to 1989. p76 Residents of Nokia region didn't like company
using their name, suggested in 1990 that company
would have to pay royalties p76.
December 1989 Wall Street Journal article "Nokia's Bold Strategy May Be
Unraveling" p78
Cooperation between Nordic countries Denmark, Norway, Sweden, Finland,
Iceland. Postwar agreements created a common
market p91.
From 1880's telephone companies were local cooperatives. Dozens
of telephone companies, no sheltering from
foreign companies. Extremely competitive p92
1979: Mobira Oy (mobile radio) joint venture between Nokia and Solara
(Finnish electronics company) p89
First international 1G system, NMT used 450 MHz, then 900 MHz band, by
end of 1990's used by 4.5 million people
in 40 countries. p95
1969: Nordic Mobile Telephone Group founded. Goal to
develop system for Nordic countries. p96
1977 equipement manufacturers join, Mobira made first NMT base station
in 1979 p 97.
October 1981, first commercial NMT 450 introduced in Sweden.
Finland in 1982. In 1984 new system added at 900 MHz
since 450 MHz band full, commercially available 1986. NMT first
international system. Originally refered to as
juppinalle (yuppie toys), became ka(..)nnykka(..), ka(..)nny, term
introduced by Nokia, meaning extension of the
hand p97
1984: Mobira Talkman launched, can be taken out of car. 5 kg. p 99
1984: Joint venture launched with Tandy to manufacture phones in South
Korea and sell them through RadioShack. p101
1986 Mobira Oy became Nokia-Mobira Oy. Cityman first handset introduced
for TACS in UK p103
1982: European Converence of Postal and Telecommunications
Administration (CEPT) forms standards body
Groupe Special Mobile, largely promoted by Nordic countries and
Netherlands. Finnish mobile operator
Radiolinja introduces GSM network in 1991. By April 1999, 45% of
subscribers in world on GSM p110.
1994: Nokia first manufacturer to introduce handphones for all major
digital standards (GSM, TDMA,
personal communications networks, Japan Digital), Nokia 2100 series of
phones; supplying GSM systtems to 59
operators in 31 countries by August 1997. p111.
1992 to 1999, cellular subscribers went from 23 million to 436 million
p113.
Jorma Ollila was an account manager for Citibank Oy, Citibank's Finnish
company. One of accounts managed was
Nokia. Did an analysis of Nokia's activities and structure, was
hired in 1984 or 1985 as vice president of
international operations. Became CFO in 1986.p122
Finland in recession in 91 92, Ollila became SEO in Feb 1992, goal to
focus company on mobile phones. Four
guiding principles: Focus, Global, Telecom-oriented, High Value-added.
p124.
1980's: deregulation in UK and ATT breakup provided new oportunities to
get into markets p125
Strong growth in company in 1995, US digital hansdset market not
growing as fast as expected, analog phone
manufacturers cutting prices. May 1996 Nokia announced
first-quarter pretax profit of FIM399 million
($84 million), 70% drop from previous quarter. Investors had been
expecting FIM 800 million. Shares fell
18% on Helsinki stock exchange. p127
Nokia had some ad spoofing itself on MTV. p146
October 1995: Nokia agrees to supply equipement to Jianxi Posts and
Telecommunications Administration, network
operating in 1996. p151.
Late 1980's: Motorola took Nokia and Tandy to court over patent
infringement for hand phones, went to US International
Trade Commission in 1989. Lawsuit dropped when Nokia agreed to
pay licensing to Motorola. In late
1980's, Nokia filed only 10 patent applications a year. Not a
high priority. After lawsuit instituted patent
training and rewards. Nokia filed 800 patent applications in 1998
and 1,000 in 1999. Ericsoon filed 1,000 in 1997,
Motorola filed 2,000 a year by 1999 p189
The Japanese companies, Panasonic, Sony, NEC did not have success with
2G, leaving Nokia as the dominant company p213.
Nokia market share in Japan was 12 % in mid-1990's, but fell to 5 % by
2000. Attributed to relatively large phones.
Nokia models weighed 92 grams, in line with 100 gram phone in Europe,
but Japan had phones selling from Panasonic
for 70 grams and less. p213.
Nippon Telegraph and Telephone founded in 1952 by Japanese Ministry of
Communications, had monopoly in Japan
until 1990's. Began maritime mobile communications in 1952,
followed by paging in the 1960's. Cellular phone service
began in 1987. DoCoMo spun off to handle wireless. Nokia
was a phone providor for Docomo. p215.
1997, cell makers in Nokia chose W-CDMA for 3G, but network people
wanted to stick with GSM, where they had
experience. Compromise reached, CDMA for cell to base station,
and GSM for base station and switching office.
Ericsson had similar strategy, teamed up. NTT didn't want GSM,
though. Still, they all teamed up to present
a 3G front. p215-216.
German Siemens, French Alcatel and Canadian Nortel announced they had
their own 3G proposal a month after Nokia,
Ericsson, NTT block announced.Motorola joined new alliance (Siemens)
p217.
January 1998 ETSI vote, Nokia and Ericsson recieved 61% OF VOTES, but
71% required. After negotiations 3G
standard based on both W-CDMA and CDMA-TDMA reached, Siemens
joins. European strife over p219.
1998: Qualcomm and Microsoft form Wireless Knowledge for internet
access to portable PCs.p219.
1998: European Union required all EU member states to use ETSI 3G,
protrayed by US and Qualcomm as protectionism
that would keep out US companies.Dec 1998 EU Commisioner Bangemann
recieved letter from Sec State Madeleine
Albright, US trade representative Charlene Barshefsky, Secretary of
Commerce William Daley and FCC Chairman
William Kennard threatening trade war. Banemann replied with Jan
1999 letter making clarification. EU only
required each member state to have one ETSI provider in each market. US
govt appeased. p220.
Japan's IDO and DDI sided with Qualcomm on 3G to try to break Docomo's
dominant position in Japan. p224.
1996: Nokia 9000 Communicator comes onto US market. Like a little
PC, with a full keyboard and flip-up screen.
Meant to lead to wireless office p226.
1998: Symbian founded by Nokia, Motorola, Ericsson, Matsushita and
Psion (palmtop computer maker). purpose
was to provide software and applications. pg 241
three types of phones predicted: Featurephones have high voice
quality and text messaging, internet browsing.
Smartphones are similar, but with larger displays. Communicators
would be protable offices. Nokia showed off
Media Screen in September 1999, Smartphone looking like a flat-panel TV
screen. Runs on Linux. Nokia 9000
Communicator example of Communicator class. p241-243
1998 Bluetooth launched by Nokia, Ericsson, 3Com, IBM, Intel, Lucent,
Microsoft, Motorola, Toshiba to handle
short-range communications between devices. p244.
In 1980's, Nokia acted as an OEM, supplying IBM, Control Data, Tandy,
Northern Telecom, HItachi, Olivetti,
Ericsson, British Telecom, others. Most American sales through
Radio Shack, Tandy owned 50% stake in
Nokia's Korean factory. p262.
Nokia introduced snap-on covers in mid1990's p262.
Success of Nokia pondered by many, no one clear explanation emerges.
p295.