Nokia History{1967 to 2000}

1967 to 2000

The electronics section of the cable division was founded in 1960 and the production of its first electronic devices began in 1962: a pulse analyzer designed for use in nuclear power plants.[22] In the 1967 fusion, that section was separated into its own division, and began manufacturing telecommunications equipment. A key CEO and subsequent chairman of the board was vuorineuvos Björn "Nalle" Westerlund (1912–2009), who founded the electronics department and let it run at a loss for 15 years. In the late 1960s and early 1970s Westerlund encouraged researchers to work on their own projects, which one top executive directly linked to the company's later expertise in mobile communications technologies.[25]

Networking equipment

In the 1970s, Nokia became more involved in the telecommunications industry by developing the Nokia DX 200, a digital switch for telephone exchanges. The DX 200 became the workhorse of the network equipment division. Its architecture enabled it to be developed into various switching products.[26] In 1984, development of a version of the exchange for the Nordic Mobile Telephony network was started.[27]

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.[28]

In the 1970s and 1980s, Nokia developed the Sanomalaitejärjestelmä ("Message device system"), a digital, portable and encrypted text-based communications device for the Finnish Defence Forces.[29] The current main unit used by the Defence Forces is the Sanomalaite M/90 (SANLA M/90).[30]

In 1998, Check Point established a partnership with Nokia, bundling Check Point's Software with Nokia's computer Network Security Appliances.[31]

First mobile phones

The Mobira Cityman 150, Nokia's NMT-900 mobile phone from 1989 (left), compared to the Nokia 1100 from 2003.[32] The Mobira Cityman line was launched in 1987.[33]
The technologies that preceded modern cellular mobile telephony systems were the various "0G" pre-cellular mobile radio telephony standards. Nokia had been producing commercial and some military mobile radio communications technology since the 1960s, although this part of the company was sold some time before the later company rationalization. Since 1964, Nokia had developed VHF radio simultaneously with Salora Oy. In 1966, Nokia and Salora started developing the ARP standard (which stands for Autoradiopuhelin, or car radio phone in English), a car-based mobile radio telephony system and the first commercially operated public mobile phone network in Finland. It went online in 1971 and offered 100% coverage in 1978.[34]

In 1979, the merger of Nokia and Salora resulted in the establishment of Mobira Oy. Mobira began developing mobile phones for the NMT (Nordic Mobile Telephony) network standard, the first-generation, Finaland's first fully automatic cellular phone system that went online in 1981.[35] In 1982, Mobira introduced its first car phone, the Mobira Senator for NMT-450 networks.[35]

Nokia bought Salora Oy in 1984 and changed the company's telecommunications 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 for NMT-900 networks (which, compared to NMT-450, offered a better signal, yet a shorter roam). 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).[33] 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.[21]

Nokia's mobile phones got a publicity boost in 1987, when Soviet leader Mikhail Gorbachev was pictured using a Mobira Cityman to call from Helsinki to his communications minister in Moscow. This led to the phone's nickname of the "Gorba".[33]

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 (since renamed to GeoSentric).[36] One year later, Nokia-Mobira Oy became Nokia Mobile Phones.

Involvement in GSM

Nokia was a key developer of GSM (Global System for Mobile Communications),[37] the second-generation mobile technology that could carry data as well as voice traffic. NMT (Nordic Mobile Telephony), the world's first mobile telephony standard to allow international roaming, provided expertise for Nokia in developing GSM, which was adopted in 1987 as the new European standard for digital mobile technology.[38][39]

Nokia delivered its first GSM network to Finnish operator Radiolinja in 1989.[40] The world's first commercial GSM call was made on 1 July 1991 in Helsinki, over a Nokia-supplied network, by then-Prime Minister of Finland Harri Holkeri, using a prototype Nokia GSM phone.[40] In 1992, the first GSM phone, the Nokia 1011, was launched.[40][41] The model number refers to its launch date, 10 November.[41] The Nokia 1011 did not yet employ Nokia's characteristic ringtone, the Nokia tune, which was introduced as a ringtone in 1994 with the Nokia 2100 series.[42]

GSM's high-quality voice calls, easy international roaming and support for new services like text messaging (Short Message Service) laid the foundations for a worldwide boom in mobile phone use.[40] GSM came to dominate mobile telephony in the 1990s, by mid-2008 accounting for about three billion subscribers, with more than 700 mobile operators across 218 countries and territories. Connections were growing at the rate of 15 per second, or 1.3 million per day.[43]

Personal computers and IT equipment

The Nokia Booklet 3G mini laptop.
In the 1980s, Nokia's computer division Nokia Data produced a series of personal computers called MikroMikko.[44] MikroMikko was Nokia Data's attempt to enter the business computer market. The first model in the line, MikroMikko 1, was released on 29 September 1981,[45] around the same time as the first IBM PC. However, the personal computer division was sold to the British ICL (International Computers Limited) in 1991, which later became part of Fujitsu.[46] MikroMikko remained a trademark of ICL and later Fujitsu. Internationally the MikroMikko line was marketed by Fujitsu as the ErgoPro.

Fujitsu later transferred its personal computer operations to Fujitsu Siemens Computers, which shut down its only factory in Espoo, Finland (in the Kilo district, where computers had been produced since the 1960s) at the end of March 2000,[47] thus ending large-scale PC manufacturing in the country.

Nokia produced high quality CRT and early TFT LCD displays for PC and larger systems applications. The Nokia Display Products' branded business was sold to ViewSonic in 2000.[48] In addition to personal computers and displays, Nokia used to manufacture DSL modems and digital set-top boxes.

Nokia re-entered the PC market in August 2009 with the introduction of the Nokia Booklet 3G mini laptop.[49]

Challenges of growth

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.[21]
In the 1980s under 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, partly due to heavy losses in its television manufacturing division.[50] Kairamo committed suicide in 1988. After Kairamo's death, Simo Vuorilehto became Nokia's chairman and CEO. In 1990–1993, Finland underwent a severe recession,[51] which also struck Nokia. Under Vuorilehto's management, Nokia was severely overhauled. The company responded by streamlining its telecommunications divisions and by divesting itself of the television and PC divisions.[52]

Probably the most important strategic change in Nokia's history was made in 1992, however, when the new CEO Jorma Ollila made a crucial strategic decision to concentrate solely on telecommunications.[23] Thus, during the rest of the 1990s, the rubber, cable and consumer electronics divisions were gradually sold as Nokia continued to divest itself of all of its non-telecommunications businesses.[23]

As late as 1991, more than a quarter of Nokia's turnover came from sales in Finland. However, after the strategic change of 1992, Nokia sales to North America, South America and Asia became significant.[53] The worldwide popularity of mobile telephones, beyond even Nokia's most optimistic predictions, created a logistical crisis in the mid-1990s,[54] prompting Nokia to overhaul its entire supply chain.[55] By 1998, Nokia's focus on telecommunications and its early investment in GSM technologies had made the company the world's largest mobile phone manufacturer, a position it held until 2012. Between 1996 and 2001, Nokia's turnover increased almost fivefold from 6.5 billion euros to 31 billion euros.[53] Logistics continued to be a major advantages over rivals, along with greater economies of scale.[56]