The reinvention of Nokia

By Wesley Diphoko for IOL 

Nokia has existed for more than 100 years. Nokia has brought us what we know today as the mobile phone. It has also experienced ups and downs that saw it changing hands from one company to the other. Now that the oldest mobile phone brand is making a full come back it’s worth reflecting on its past as we look at its latest products.

In the year 1865, Fredrik Idestam built a paper manufacturing mill in Southern Finland and followed it up by launching a second mill in the nearby town of Nokia in 1868.
Three years later Idestam transformed his company into a share company and the Nokia company was formed.

Nokia kept growing through the 19th century and it was only in the 1960s that the company branched out into electronics. In the next two years, it developed a host of electronic devices including radio telephones for the army.

In 1979 Nokia took its first steps into telephony by creating Mobira in a Joint Venture (JV) with Finnish TV maker Salora, and they created the Nordic Mobile Telephone
(NMT) service. This was the world’s first international cellular network and in the 80s, Nokia launched its first car phone called the Mobira Senator.

Five years later Nokia launched the Mobira Cityman, the first mobile phone that would run on the company’s NMT network. At 800 grams and priced at $6,308, it may be heavy and pricey by today’s standards, but the device soon hit cult status when Mikhail Gorbachev was photographed using the device.

The ’90s

The ’90s were the glory years for the Finnish company. In 1994, Nokia launched 2100 with the now iconic Nokia ringtone.
Three years later it launched Snake, one of the most widely recognised mobile games of all time. In 1997, Nokia also launched the Communicator, which 11 years before the first iPhone was considered to be much ahead of its time. The device not only looked cool but also offered features like email, fax, calendar and a massive display.

The same year, Nokia also launched the 6110 and the 5110 two more devices, which were way ahead of their time and competition. These devices offered a much sleeker way of text messaging, a beautiful menu system customization options like multiple colour snap-on covers. These devices were followed by the 7110, which offered basic web functions, the 7650, with a built-in camera and the 6650, the company’s first 3G enabled smartphone.

By 1998, Nokia had firmly established itself as the global leader. Where its rivals like Apple, Sony and Siemens had failed to predict the global demand, Nokia sailed through these years with a turnover that increased 500 percent from $ 8.9 billion to $42.8 billion.

After the glorious 90s, in 2007 things began to go downhill — and rapidly. In the year 2009, Nokia posted its first quarterly loss in more than a decade. This was largely due to HTC developing a smartphone running on the yet new Google Android operating system.
With the iPhones and various Android smartphones taking the market by storm, Nokia failed to keep up with them. Instead of joining the horde of Android adopters, Nokia’s new CEO Stephen Elop joined hands with Microsoft to develop smartphones running on the Windows Phone platform.

The Microsoft acquisition

Microsoft’s acquisition of Nokia’s smartphone business brought an end to an era, which has seen plenty of ups and an equal number of downs.
On September 3, 2013, Nokia announced that its hardware department would be acquired by Microsoft in a deal that was worth $7.2 billion. After eight months, the deal was completed.

Nokia , once the world’s biggest maker of mobile phones, was wrong-footed by the rise of smartphones and eclipsed by Apple and Samsung.
It sold its entire handset business to Microsoft Corp in 2014 and focused on telecoms network equipment.
Microsoft struggled with phones after the 2014 deal with Nokia, and it decided to write off $7.5 billion from the business.

Nokia brand

Nokia, however, held on to its phone patents with a view to eventually striking a licensing deal, though it had to wait due to a non-compete deal with Microsoft.

Recently, HMD, a company backed by one of its former executives teamed up with manufacturer Foxconn (2354.TW) to buy the rights to the brand for mobile devices.

Microsoft also decided to sell its entry-level phones business to HMD and Foxconn subsidiary FIH Mobile for $350 million.

Nokia, whose global market share in handsets peaked at around 40% in 2008, believed that its brand remained widely recognised, especially in developing markets.

Nokia also believed that its brand was strong in the feature phone space. The company now has 1% of the global market share and falls just outside the top 10 phone brands.

The Nokia 1 is accessible technology, delivering smartphone essentials for just R999. The legendary Nokia 8110 is a 4G feature phone that comes with the iconic curved slider design. It will be available for purchase from May 2018.

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