Tuesday, October 14, 2008


Nokia Corporation
Type PublicOyj
Founded Nokia, Finland (1865)
Founder Fredrik Idestam
Headquarters Flag of Finland Espoo, Finland
Key people Kari Kairamo, CEO in the 1980s
Olli-Pekka Kallasvuo, President & CEO
Jorma Ollila, Chairman
Industry Telecommunications
Products Mobile phones
Multimedia computers
Services Services and Software
Online services
Revenue 54.058 bn (2008)[1]
Operating income €7.985 bn (2007)
Net income €7.205 bn (2007)
Total assets €37.599 bn (2007)
Total equity €17.338 bn (2007)
Employees 117,212 as of June 30, 2008[2]
Subsidiaries Nokia Siemens Networks
Qt Software
Website www.nokia.com

Nokia Corporation (pronunciation /'nɔkiɑ/) OMX: NOK1V, NYSE: NOK, FWB: NOA3) is a Finnish multinational communications corporation, headquartered in Keilaniemi, Espoo, a city neighbouring Finland's capital Helsinki. Nokia is focused on wireless and wired telecommunications, with 112,262 employees in 120 countries, sales in more than 150 countries and global annual revenue of 51.1 billion euros and operating profit of 8.0 billion as of 2007.[1][3] It is the world's largest manufacturer of mobile telephones: its global device market share was about 40% in Q2 of 2008, up from 38% in Q2 2007 and up from 39% sequentially.[2] Nokia produces mobile phones for every major market segment and protocol, including GSM, CDMA, and W-CDMA (UMTS). Nokia's subsidiary Nokia Siemens Networks produces telecommunications network equipments, solutions and services.

Nokia has sites for research and development, manufacturing and sales in many continents throughout the world. As of March 2008, Nokia had R&D centers in 10 countries and employed 30,415 people in research and development, representing approximately 27% of Nokia’s total workforce.[3] Nokia Research Center, founded in 1986, is Nokia's industrial research unit of about 800 researchers, engineers and scientists.[4] It has sites in seven countries: Finland, Denmark, Germany, China, Japan, United Kingdom and United States. Besides its NRCs, in 2001 Nokia founded (and owns) INdT - Nokia Institute of Technology, a R&D institute located in Brazil. Nokia production facilities are located at Espoo, Oulu and Salo, Finland; Manaus, Brazil; Beijing, Dongguan and Suzhou, China; Fleet, England; Komárom, Hungary; Chennai, India; Reynosa, Mexico; Jucu, Romania[5] and Masan, South Korea.[6] Nokia's Design Department remains in Salo, Finland.

Nokia plays a very large role in the economy of Finland: it is by far the largest Finnish company, accounting for about a third of the market capitalization of the Helsinki Stock Exchange (OMX Helsinki) as of 2007; a unique situation for an industrialized country.[7] It is an important employer in Finland and several small companies have grown into large ones as Nokia's subcontractors. Nokia increased Finland's GDP by more than 1.5% in 1999 alone. In 2004 Nokia's share of the Finland's GDP was 3.5% and accounted for almost a quarter of Finland's exports in 2003. In 2006, Nokia generated revenue that for the first time exceeded the state budget of Finland.

Finns have ranked Nokia many times as the best Finnish brand and employer. Valued at $35.9 billion, the Nokia brand is listed as the 5th most valuable global brand in Interbrand/BusinessWeek's Best Global Brands list of 2008 (1st non-US company).[8][9] It is the number one brand in Asia (as of 2007)[10] and Europe (as of 2008),[11] the 23rd most admirable company worldwide in Fortune's World's Most Admired Companies list of 2008 (tied with Exxon Mobil; 2nd in Network Communications, 5th non-US company),[12] and is the world's 88th largest company in Fortune Global 500 list of 2008, up from 119 of the previous year.[13] As of 2008, AMR Research ranks Nokia's global supply chain number two in the world.[14]



[edit] History

The Nokia House, Nokia's head office located by the Gulf of Finland in Keilaniemi, Espoo, was constructed between 1995 and 1997. It is the workplace of more than 1,000 Nokia employees.
The Nokia House, Nokia's head office located by the Gulf of Finland in Keilaniemi, Espoo, was constructed between 1995 and 1997. It is the workplace of more than 1,000 Nokia employees.[15]

[edit] Pre-telecommunications era

What is known today as Nokia was established in 1865 as a wood-pulp mill by Fredrik Idestam on the banks of the Tammerkoski rapids in the town of Tampere, in south-western Finland. The company was later relocated to the town of Nokia by the Nokianvirta river, which had better resources for hydropower production. That is where the company got the name that it still uses today. The name Nokia originated from the river which flowed through the town. The river itself, Nokianvirta, was named after the old Finnish word originally meaning a dark, furry animal that was locally known as the nokia, or sable, or later pine marten.

Finnish Rubber Works established its factories in the beginning of 20th century nearby and began using Nokia as its brand. Shortly after World War I, Finnish Rubber Works acquired Nokia Wood Mills as well as Finnish Cable Works, a producer of telephone and telegraph cables. These three companies were merged to form Nokia Corporation in 1967.

The new company was involved in many sectors, producing at one time or another paper products, bicycle and car tires, footwear (including Wellington boots), personal computers, communications cables, televisions, electricity generation machinery, capacitors, aluminium, etc.

[edit] Telecommunications era

The seeds of the current incarnation of Nokia were planted with the founding of the electronics section of the cable division in the 1960s. In the 1967 fusion, that section was separated into its own division, and began manufacturing telecommunications equipment.

[edit] First mobile phones

Nokia had been producing commercial and military mobile radio communications technology since the 1960s. Since 1964 Nokia had developed VHF-radio simultaneously with Salora Oy, which later in 1971 also developed the ARP-phone. In 1979 the merger of these two companies resulted in the establishment of Mobira Oy. Mobira began developing mobile phones for the Nordic Mobile Telephony (NMT) network standard that went online in the 1980s and in 1982 it introduced its first car phone, the Mobira Senator for NMT 450 networks.

The Mobira Cityman 200, Nokia's NMT-900 mobile phone from the early 1990s.
The Mobira Cityman 200, Nokia's NMT-900 mobile phone from the early 1990s.[16]

Nokia bought Salora Oy in 1984 and now owning 100% of the company, changed the company's telecommunication branch name to Nokia-Mobira Oy. The Mobira Talkman, launched in 1984, was one of the world's first transportable phones. In 1987, Nokia introduced one of the world's first handheld phones, the Mobira Cityman 900. While the Mobira Senator of 1982 had weighed 9.8 kg (22 lb) and the Talkman just under 5 kg (11 lb), the Mobira Cityman weighed only 800 g (28 oz) with the battery and had a price tag of 24,000 Finnish marks (approximately €4,560).[17] Despite the high price, the first phones were almost snatched from the sales assistants’ hands. Initially, the mobile phone was a "yuppie" product and a status symbol.

In 1988, Jorma Nieminen, resigning from the post of CEO of the mobile phone unit, along with two other employees from the unit, started a notable mobile phone company of their own, Benefon Oy. One year later, Nokia Mobira Oy became Nokia Mobile Phones and in 1991 the first GSM phone was launched.

[edit] Involvement in GSM

Nordic Mobile Telephony was the world's first mobile telephony standard that enabled international roaming, and provided valuable experience for Nokia for its close participation in developing Global System for Mobile Communications (GSM). It is a digital standard which came to dominate the world of mobile telephony in the 1990s, in mid-2006 accounting for about two billion mobile telephone subscribers in the world, or about 80% percent of the total, in more than 200 countries. The world's first commercial GSM call was made in 1991 in Helsinki over a Nokia-supplied network, by then Prime Minister of Finland Harri Holkeri, using a Nokia phone.

[edit] Networking equipment

In the 1970s, Nokia became more involved in the telecommunications industry by developing the Nokia DX200, a digital switch for telephone exchanges. In 1982, a DX200 switch became the world's first digital telephone switch to be put into operational use. The DX200 became the workhorse of the network equipment division. Its modular and flexible architecture enabled it to be developed into various switching products.

For a while in the 1970s, Nokia's network equipment production was separated into Telefenno, a company jointly owned by the parent corporation and by a company owned by the Finnish state. In 1987 the state sold its shares to Nokia and in 1992 the name was changed to Nokia Telecommunications.

In the 1970s and 1980s Nokia developed the Sanomalaitejärjestelmä ("Message device system") for Finnish Defence Forces.[18]

[edit] Personal computers

In the 1980s, Nokia produced a series of personal computers called MikroMikko.[19] However, the PC division was sold to ICL, which later became part of Fujitsu. That company later transferred its personal computer operations to Fujitsu Siemens Computers, which shut down its only factory in Finland (in the town of Espoo, where computers had been produced since the 1960s) at the end of March 2000[20][21], thus ending large-scale PC manufacturing in the country. Nokia was also known for producing very high quality CRT displays for PC and larger systems application. The CRT division was sold to Viewsonic in 2000[22].

[edit] Challenges of growth

In the 1980s, during the era of its CEO Kari Kairamo, Nokia expanded into new fields, mostly by acquisitions. In the late 1980s and early 1990s, the corporation ran into serious financial problems, a major reason being its heavy losses by the television manufacturing division (these problems probably contributed to Kairamo taking his own life in 1988). Nokia responded by streamlining its telecommunications divisions, and by divesting itself of the television and PC divisions. Jorma Ollila, who became the CEO in 1992, made a strategic decision to concentrate solely on telecommunications. Thus, during the rest of the 1990s, Nokia continued to divest itself of all of its non-telecommunications divisions.

The exploding worldwide popularity of mobile telephones, beyond even Nokia's most optimistic predictions, caused a logistics crisis in the mid-1990s. This prompted Nokia to overhaul its entire logistics operation. Logistics continues to be one of Nokia's major advantages over its rivals, along with greater economies of scale.

[edit] In the new millennium

Progression of size in Nokia mobile phones.
Progression of size in Nokia mobile phones.

In April 2003, the troubles of the networks equipment division caused the corporation to resort to similar streamlining practices on that side, including layoffs and organizational restructuring.[23] This diminished Nokia's public image in Finland,[24][25] and produced a number of court cases and an episode of a documentary television show critical of Nokia.[26]

On September 22, 2003, Nokia acquired Sega.com, a branch of SEGA which has been the major basis to build up the Nokia N-Gage.[27]

Despite these occasional crises, Nokia has been phenomenally successful in its chosen field. Its growth has come mostly during the era of Jorma Ollila as CEO and his team of about six close colleagues. In June 2006, Ollila left to become the chairman of Royal Dutch Shell. Nokia's new CEO is Olli-Pekka Kallasvuo.

On February 2006, Nokia and Sanyo announced a memorandum of understanding to create a joint venture addressing the CDMA handset business. But in June, they announced ending negotiations without agreement. Nokia also stated its decision to pull out of CDMA research and development, to continue CDMA business in selected markets.[28][29][30]

On February 10, 2006, Nokia acquired Intellisync Corporation, a provider of data and PIM synchronization software.

On June 19, 2006, Nokia and Siemens AG announced the companies are to merge their mobile and fixed-line phone network equipment businesses to create one of the world's largest network firms. Each company will have a 50% stake in the infrastructure company, to be headquartered in the Helsinki area, and to be called Nokia Siemens Networks. The companies predict annual sales of €16 bn and cost savings of €1.5 bn a year by 2010. About 20,000 Nokia employees will be transferred to this new company.

The Nokia 6300, a member of the Nokia 6000 series, Nokia's largest family of phones.
The Nokia 6300, a member of the Nokia 6000 series, Nokia's largest family of phones.

In August 2006, Nokia acquired online music distributor Loudeye Corp for $60 m. The company has been developing this into an online music service in the hope of using it to generate handset sales. The service is expected to launch in late 2007 and would rival iTunes.

In March 2007, Nokia signed a memorandum with Cluj County Council, Romania to open a new plant near the city in Jucu commune.[31][32]

In May 2007, Nokia announced that its Nokia 1100 handset, with over 200 million units shipped, is the best-selling mobile phone of all time and the world's top-selling consumer electronics product.[33]

In July 2007, Nokia acquired all assets of Twango, the comprehensive media sharing solution for organizing and sharing photos, videos and other personal media.[34][35]

In September 2007, Nokia announced its intention to acquire Enpocket, a supplier of mobile advertising technology and services.[36]

In October 2007, pending shareholder and regulatory approval, Nokia bought Navteq, a U.S.-based supplier of digital mapping data, for a price of $8.1 bn.[37]

At the Nokia World conference in December 2007, Nokia announced their "Comes With Music" program: Nokia device buyers are to receive a year of complimentary access to music downloads.[38] The service is expected to be commercially available in the second half of 2008.

In April 2008, Nokia began finding new ways to Connect People, asking the “audience” to use their creativity and their mobile devices to become Nokia’s production company - to take part in filming, acting, editing and producing a collaborative film. Nokia Productions will be the first ever mobile filmmaking project directed by Spike Lee. This will be a collaborative experience that exists across borders and perspectives—working off a common script.

In May 2008, Nokia announced on their annual stockholder meeting that they want to shift to the internet business as a whole. Nokia no longer wants to be seen as the telephone company. Google, Apple and Microsoft are not seen as natural competition for their new image but they are considered as major important players to deal with.

In July 2008, Nokia finalized the aquistion of Navteq.

In September, 2008, Nokia acquires OZ Communications, a privately held company with approximately 220 employees and headquartered in Montreal, Canada. [39]

Corporate structure

Since January 1, 2008, Nokia comprises three business groups: Devices, Services & Software, and Markets. On April 1, 2007, Nokia’s Networks business group was combined with Siemens’ carrier-related operations for fixed and mobile networks to form Nokia Siemens Networks, jointly owned by Nokia and Siemens and consolidated by Nokia.


Evolution of the Nokia Communicator. Models 9000, 9110, 9210 and 9500 shown.
Evolution of the Nokia Communicator. Models 9000, 9110, 9210 and 9500 shown.

The Devices division combines its existing mainline mobile phones division with the separate subdivisions manufacturing Multimedia (Nseries) and Enterprise (Eseries) class devices as well as formerly centralized core devices R&D – called Technology Platforms, headed by Kai Öistämö.

This division provides the general public with mobile voice and data products across a wide range of mobile devices, including high-volume, consumer oriented mobile phones and devices, and more expensive multimedia and enterprise-class devices. The devices are based on GSM/EDGE, 3G/WCDMA and CDMA cellular technologies. Nokia's Nseries Multimedia Computers extensively uses Symbian OS.

In the first quarter of 2006 Nokia sold over 15 million MP3 capable mobile phones, which means that Nokia is not only the world's leading supplier of mobile phones and digital cameras (as most of Nokia's mobile telephones feature digital cameras, it is also believed that Nokia has recently overtaken Kodak in camera production making it the largest in the world), Nokia is now also the leading supplier of digital audio players (MP3 players), outpacing sales of devices such as the iPod from Apple. At the end of the year 2007, Nokia managed to sell almost 440 million mobile phones which accounted for 40% of all global mobile phones sales.[40]

Services & Software

The Nokia N95, an example of Nokia's Nseries multimedia computer lineup.
The Nokia N95, an example of Nokia's Nseries multimedia computer lineup.

The Services & Software division combines the existing Enterprise and Consumer driver services businesses previously hosted in Multimedia and Enterprise as well as a number of new acquisitions (Loudeye, Gate5, Enpocket, Intellisync, Avvenu and OZ), headed by Niklas Savander.

The group works with companies outside the telecommunications industry to make advances in the technology and bring new applications and possibilities in areas such as online services, optics, music synchronization and streaming media.


The successor organization to Nokia's Customer and Market Operations division, represents the sales, marketing and manufacturing functions of the company, led by Anssi Vanjoki.

Nokia Siemens Networks

Nokia Siemens Networks (previously Nokia Networks) provides mobile network infrastructure, communications and networks service platforms, as well as professional services to operators and service providers. Networks focuses in: GSM, EDGE, 3G/WCDMA and WiMAX radio access networks; core networks with increasing IP and multiaccess capabilities; and services.

At the end of 2005, Nokia Networks had more than 150 mobile network customers in more than 60 countries, with its systems serving in excess of 400 million subscribers.

On June 19, 2006 Nokia and Siemens AG announced the companies are to merge their mobile and fixed-line phone network equipment businesses to create one of the world's largest network firms, called Nokia Siemens Networks. The Nokia Siemens Networks brand identity was subsequently launched at the 3GSM World Congress in Barcelona in February 2007.[41][42]

Corporate affairs

Corporate governance

The control and management of Nokia is divided among the shareholders at a general meeting and the Group Executive Board (left),[43] under the direction of the Board of Directors (right).[44] The Chairman and the rest of the Group Executive Board members are appointed by the Board of Directors. Only the Chairman of the Group Executive Board can belong to both, the Board of Directors and the Group Executive Board. The Board of Directors' committees consist of the Audit Committee,[45] the Personnel Committee[46] and the Corporate Governance and Nomination Committee.[47][48]

The operations of the company are managed within the framework set by the Finnish Companies Act,[49] Nokia's Articles of Association[50] and Corporate Governance Guidelines,[51] and related Board of Directors adopted charters.

Group Executive Board [43]
Flag of Finland Olli-Pekka Kallasvuo (Chairman), b. 1953
President, CEO and Group Executive Board Chairman of Nokia Corporation since June 1, 2006
Member of the Nokia Board of Directors since May 3, 2007
With Nokia 1980–1981, rejoined 1982, Group Executive Board member since 1990

Flag of Finland Robert Andersson, b. 1960
Executive Vice President, Devices Finance, Strategy and Sourcing
Joined Nokia 1985, Group Executive Board member since 2005
Flag of the United Kingdom/Flag of Australia Simon Beresford-Wylie, b. 1958
Chief Executive Officer, Nokia Siemens Networks
Joined Nokia 1998, Group Executive Board member since 2005
Flag of Finland Timo Ihamuotila, b. 1966
Executive Vice President, Sales
With Nokia 1993–1996, rejoined 1999, Group Executive Board member since 2007
Flag of the United States Mary T. McDowell, b. 1964
Executive Vice President, Chief Development Officer
Joined Nokia 2004, Group Executive Board member since 2004
Flag of Norway Hallstein Mørk, b. 1953
Executive Vice President, Human Resources
Joined Nokia 1999, Group Executive Board member since 2004
Flag of Finland Dr. Tero Ojanperä, b. 1966
Executive Vice President, Entertainment & Communities
Joined Nokia 1990, Group Executive Board member since 2005
Flag of Finland Niklas Savander, b. 1962
Executive Vice President, Services & Software
Joined Nokia 1997, Group Executive Board member since 2006
Flag of the United States Richard A. Simonson, b. 1958
Executive Vice President, Chief Financial Officer
Joined Nokia 2001, Group Executive Board member since 2004
Flag of Finland Veli Sundbäck, b. 1946
Executive Vice President, Corporate Relations and Responsibility
Joined Nokia 1996, Group Executive Board member since 1996
Flag of Finland Anssi Vanjoki, b. 1956
Executive Vice President, Markets
Joined Nokia 1991, Group Executive Board member since 1998
Flag of Finland Dr. Kai Öistämö, b. 1964
Executive Vice President, Devices
Joined Nokia 1991, Group Executive Board member since 2005
Board of Directors [44][52]
Flag of Finland Jorma Ollila (Chairman), b. 1950
Board member since 1995, Chairman of the Board of Directors since 1999
Chairman of the Board of Directors of Royal Dutch Shell PLC
Flag of the United States Dame Marjorie Scardino (Vice Chairman), b. 1947
Board member since 2001
Chairman of the Corporate Governance and Nomination Committee, Member of the Personnel Committee
Chief Executive Officer and member of the Board of Directors of Pearson PLC
Flag of Finland Georg Ehrnrooth, b. 1940
Board member since 2000
Member of the Audit Committee, Member of the Corporate Governance and Nomination Committee
Flag of India Lalita D. Gupte, b. 1948
Board member since 2007
Member of the Audit Committee
Non-executive Chairman of the ICICI Venture Funds Management Co Ltd.
Flag of Finland Dr. Bengt Holmström, b. 1949
Board member since 1999
Paul A. Samuelson Professor of Economics at Massachusetts Institute of Technology,
joint appointment at the MIT Sloan School of Management
Flag of Germany Dr. Henning Kagermann, b. 1947
Board member since 2007
CEO and Chairman of the Executive Board of SAP AG
Flag of Finland Olli-Pekka Kallasvuo, b. 1953
Board member since 2007
President and CEO of Nokia Corporation
Flag of Sweden Per Karlsson, b. 1955
Board member since 2002, Independent Corporate Advisor
Chairman of the Personnel Committee, Member of the Corporate Governance and Nomination Committee
Flag of Finland Risto Siilasmaa, b. 1966
Board member since 2008
Member of the Audit Committee
Flag of Finland Keijo Suila, b. 1945
Board member since 2006
Member of the Audit Committee

Historical logos

Corporate culture

The Nokia House, Nokia's head office in Keilaniemi, Espoo, Finland.
The Nokia House, Nokia's head office in Keilaniemi, Espoo, Finland.

Nokia's official corporate culture manifesto, The Nokia Way, emphasises the speed and flexibility of decision-making in a flat, networked organization, although the corporation's size necessarily imposes a certain amount of bureaucracy.

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

Until May 2007, the Nokia Values were Customer Satisfaction, Respect, Achievement, and Renewal. In May 2007, Nokia redefined its values after initiating a series of discussions worldwide as to 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.[55]

Online services

mobi and the Mobile Web

Nokia was the first proponent of a Top Level Domain (TLD) specifically for the Mobile Web and, as a result, was instrumental in the launch of the .mobi domain name extension in September 2006 as an official backer.[56][57] Since then, Nokia has launched the largest mobile portal, Nokia.mobi, which receives over 100 million visits a month.[58] It followed that with the launch of a mobile Ad Service to cater to the growing demand for mobile advertisement.[59]


Nokia Ovi logo.
Nokia Ovi logo.

Ovi, announced on August 29, 2007, is the name for Nokia's "umbrella concept" Internet services. Centered on Ovi.com, it will market as "personal dashboard" where users can share photos with friends, download music, maps and games directly to their phones and access third-party services like Yahoo's Flickr photo site. It has some significance in that Nokia is moving deeper into the world of Internet services, where head-on competition with Microsoft, Google and Apple is inevitable.[60]

The services so far announced to be offered through Ovi include the Nokia Music Store, Nokia Maps and the N-Gage mobile gaming platform available for several S60 smartphones.


In August 2007, Nokia launched their new social network, dubbed MOSH. MOSH by Nokia is the first-ever social network built by a handset manufacturer. MOSH aims to bring social, media-based networks to the mobile environment. Users can upload, download, share, and bookmark a variety of media - audio files, video files, documents, applications, games, images.[61]

Comes With Music

On December 4, 2007, Nokia unveiled their plans for the "Nokia Comes With Music" initiative, a program that would partner with Universal Music Group International and Sony BMG to bundle a year's worth of unlimited, DRM-free downloads with the purchase of a Nokia phone. Following the termination of the year of free downloads, tracks can be kept without having to renew the subscription. Downloads will be both PC and mobile-based.[38]

Environmental record

Electronic products such as cell phones impact the environment both during production and after their useful life when they are discarded and turn into electronic waste. According to environmental organization Greenpeace, Nokia has a good track record in limiting the amount of toxic chemicals in its products, supporting recycling, and reducing impact on climate change, compared to other large electronics brands.[62]

In an effort to further reduce their environmental impact, Nokia released a new phone concept, Remade, in February 2008.[63] The phone has been constructed of solely recyclable materials.[63] The outer part of the phone is made from recycled materials such as aluminum cans, plastic bottles, and used car tires.[64] The screen is constructed of recycled glass, and the hinges have been created from rubber tires. The interior of the phone is entirely constructed with refurbished phone parts, and there is a feature that encourages energy saving habits by reducing the backlight to the ideal level, which then allows the battery to last longer without frequent charges.

Research cooperation with universities

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