Nokia

Nokia Corporation (Finnish: Nokia Oyj, Swedish: Nokia Abp; Finnish pronunciation: [ˈnokiɑ], English: /ˈnɒkiə/) is a Finnish communications and information technology multinational corporation that is headquartered in Espoo, Finland. Its Nokia Solutions and Networks company provides telecommunications network equipment and services, while Internet services, including applications, games, music, media and messaging, and free-of-charge digital map information and navigation services, are delivered through its wholly owned subsidiary Navteq.

As of 2012, Nokia employs 101,982 people across 120 countries, conducts sales in more than 150 countries, and reports annual revenues of around €30 billion. By the fourth quarter of 2012, it was the world's second-largest mobile phone maker in terms of unit sales (after Samsung), with a global market share of 18.0%. Now, Nokia only has a 3.2% market share in smartphones. They lost 40% of their revenue in mobile phones in Q2 2013. Nokia is a public limited-liability company listed on the Helsinki Stock Exchange and New York Stock Exchange. It is the world's 274th-largest company measured by 2013 revenues according to the Fortune Global 500.

Nokia was the world's largest vendor of mobile phones from 1998 to 2012. However, over the past five years its market share declined as a result of the growing use of touchscreen smartphones from other vendors—principally the iPhone, by Apple, and devices running on Android, an operating system created by Google. The corporation's share price fell from a high of US$40 in late 2007 to under US$2 in mid-2012. In a bid to recover, Nokia announced a strategic partnership with Microsoft in February 2011, leading to the replacement of Symbian with Microsoft's Windows Phone operating system in all Nokia smartphones. Following the replacement of the Symbian system, Nokia's smartphone sales figures, which had previously increased, collapsed dramatically. From the beginning of 2011 until 2013, Nokia fell from its position as the world's largest smartphone vendor to assume the status of tenth largest.

On 2 September 2013, Microsoft announced its intent to purchase Nokia's mobile phone business unit as part of an overall deal totaling €5.44 billion (US$7.17 billion). Stephen Elop, Nokia's former CEO, and several other executives will join Microsoft as part of the deal.

History

1999-present

The predecessors of the modern Nokia were the Nokia Company (Nokia Aktiebolag), Finnish Rubber Works Ltd (Suomen Gummitehdas Oy) and Finnish Cable Works Ltd (Suomen Kaapelitehdas Oy).

Nokia's history started in 1865 when mining engineer Fredrik Idestam established a groundwood pulp mill on the banks of the Tammerkoski rapids in the town of Tampere, in southwestern Finland in the Russian Empire and started manufacturing paper. In 1868, Idestam built a second mill near the town of Nokia, fifteen kilometres (nine miles) west of Tampere by the Nokianvirta river, which had better resources for hydropower production. In 1871, Idestam, with the help of his close friend statesman Leo Mechelin, renamed and transformed his firm into a share company, thereby founding the Nokia Company, the name it is still known by today.

Toward the end of the 19th century, Mechelin's wishes to expand into the electricity business were at first thwarted by Idestam's opposition. However, Idestam's retirement from the management of the company in 1896 allowed Mechelin to become the company's chairman (from 1898 until 1914) and sell most shareholders on his plans, thus realizing his vision. In 1902, Nokia added electricity generation to its business activities.

Industrial conglomerate

In 1898, a random dickhead founded Finnish Rubber Works, manufacturer of galoshes and other rubber products, which later became Nokia's rubber business. At the beginning of the 20th century, Finnish Rubber Works established its factories near the town of Nokia and they began using Nokia as its product brand. In 1912, Arvid Wickström founded Finnish Cable Works, producer of telephone, telegraph and electrical cables and the foundation of Nokia's cable and electronics businesses. At the end of the 1910s, shortly after World War I, the Nokia Company was nearing bankruptcy. To ensure the continuation of electricity supply from Nokia's generators, Finnish Rubber Works acquired the business of the insolvent company. In 1922, Finnish Rubber Works acquired Finnish Cable Works. In 1937, Verner Weckman, a sport wrestler and Finland's first Olympic Gold medalist, became president of Finnish Cable Works, after 16 years as its technical director.  After World War II, Finnish Cable Works supplied cables to the Soviet Union as part of Finland's war reparations. This gave the company a good foothold for later trade.

The three companies, which had been jointly owned since 1922, were merged to form a new industrial conglomerate, Nokia Corporation in 1967 and paved the way for Nokia's future as a global corporation. The new company was involved in many industries, producing at one time or another paper products, car and bicycle tires, footwear (including rubber boots), communications cables, televisions and other consumer electronics, personal computers, electricity generation machinery, robotics, capacitors, military communications and equipment (such as the SANLA M/90 device and the M61 gas mask for the Finnish Army), plastics, aluminum and chemicals.[25] Each business unit had its own director who reported to the first Nokia Corporation President, Björn Westerlund. As the president of the Finnish Cable Works, he had been responsible for setting up the company's first electronics department in 1960, sowing the seeds of Nokia's future in telecommunications.

Eventually, the company decided to leave consumer electronics behind in the 1990s and focused solely on the fastest growing segments in telecommunications. Nokian Tyres, manufacturer of tires, split from Nokia Corporation to form its own company in 1988 and two years later Nokian Footwear, manufacturer of rubber boots, was founded. In 1989, Nokia also sold the original paper business; currently this company (Nokian Paperi) is owned by SCA. During the rest of the 1990s, Nokia divested itself of all of its non-telecommunications businesses.

1967 to 2000

The seeds of the current incarnation of Nokia were planted with the founding of the electronics section of the cable division in 1960 and the production of its first electronic device in 1962: a pulse analyzer designed for use in nuclear power plants. 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.

Networking equipment

A Nokia P30

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 modular and flexible architecture enabled it to be developed into various switching products. In 1984, development of a version of the exchange for the Nordic Mobile Telephony network was started.

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"), a digital, portable and encrypted text-based communications device for the Finnish Defence Forces. The current main unit used by the Defence Forces is the Sanomalaite M/90 (SANLA M/90).

In 1998, Check Point established a partnership with Nokia, which bundled Check Point's Software with Nokia's computer Network Security Appliances.

First mobile phones

The Mobira Cityman 150, Nokia's NMT-900 mobile phone from 1989 (left), compared to the Nokia 1100 from 2003. The Mobira Cityman line was launched in 1987.

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.

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, first fully automatic cellular phone system that went online in 1981. In 1982, Mobira introduced its first car phone, the Mobira Senator for NMT-450 networks.

Nokia bought Salora Oy in 1984 and now owning 100% of the company, 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). 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.

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

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). One year later, Nokia-Mobira Oy became Nokia Mobile Phones.

Involvement in GSM

Nokia was one of the key developers of GSM (Global System for Mobile Communications),[ the second-generation mobile technology which could carry data as well as voice traffic. NMT (Nordic Mobile Telephony), the world's first mobile telephony standard that enabled international roaming, provided valuable experience for Nokia for its close participation in developing GSM, which was adopted in 1987 as the new European standard for digital mobile technology.

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

GSM's high-quality voice calls, easy international roaming and support for new services like text messaging (SMS) laid the foundations for a worldwide boom in mobile phone use. GSM came to dominate the world of mobile telephony in the 1990s, in mid-2008 accounting for about three billion mobile telephone subscribers in the world, with more than 700 mobile operators across 218 countries and territories. New connections are added at the rate of 15 per second, or 1.3 million per day.

Personal computers and IT equipment

In the 1980s, Nokia's computer division Nokia Data produced a series of personal computers called MikroMikko. 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, 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. 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, thus ending large-scale PC manufacturing in the country. Nokia was also known for producing very high quality CRT and early TFT LCD displays for PC and larger systems application. The Nokia Display Products' branded business was sold to ViewSonic in 2000. 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.

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 and businesses that were just too diverse. These problems, and a suspected total burnout, probably contributed to Kairamo taking his own life in 1988. After Kairamo's death, Simo Vuorilehto became Nokia's chairman and CEO. In 1990–1993, Finland underwent severe economic depression, 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.

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. 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.

As late as 1991, more than a quarter of Nokia's turnover still came from sales in Finland. However, after the strategic change of 1992, Nokia saw a huge increase in sales to North America, South America and Asia. 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. 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 would hold for the next 14 consecutive years until 2012. Between 1996 and 2001, Nokia's turnover increased almost fivefold from 6.5 billion euros to 31 billion euros. Logistics continues to be one of Nokia's major advantages over its rivals, along with greater economies of scale.

2000 to present

 

Nokia launched its Nokia 1100 handset in 2003, with over 200 million units shipped, was the best-selling mobile phone of all time and the world's top-selling consumer electronics product. Nokia was one of the first players in the mobile space to recognize that there was a market opportunity in combining a game console and a mobile phone (both of which many gamers were carrying in 2003) into the N-Gage. The N-Gage was a mobile phone and game console meant to lure gamers away from the Game Boy Advance, though it cost twice as much. The N-Gage was not a success, and from 2007 and 2008, Nokia started to offer an N-Gage service on existing Symbian S60 smartphones to play games.

Nokia Productions was the first ever mobile filmmaking project directed by Spike Lee. Work began in April 2008, and the film premiered in October 2008.

In 2009, the company announced a high-end Windows-based netbook called the Nokia Booklet 3G. On 2 September 2009, Nokia launched two new music and social networking phones, the X6 and X3. The Nokia X6 featured 32 GB of on-board memory with a 3.2" finger touch interface and comes with a music playback time of 35 hours. The Nokia X3 was the first series 40 Ovi Store-enabled device. The X3 was a music device that comes with stereo speakers, built-in FM radio, and a 3.2-megapixel camera. In 2009, Nokia also unveiled the 7705 Twist, a phone sporting a square shape that swiveled open to reveal a full QWERTY keypad, featuring a 3-megapixel camera, web browsing, voice commands and weighting around 3.44 ounces (98 g).

On 9 August 2012, Nokia launched for the Indian market two new Asha range of handsets equipped with cloud accelerated Nokia browser, helping users browse the Internet faster and lower their spend on data charges.

Symbian

Symbian was Nokia's main smartphone OS until 2011.

In Q4 2004, Nokia released its first touch screen phone, the Nokia 7710.

In September 2006, Nokia announced the Nokia N95, a Symbian-powered slider smartphone. It was released in February 2007 as the first phone with a 5-megapixel camera. It became hugely popular. A 8 GB variant was released in October 2007.

In November 2007, Nokia announced and released the Nokia N82, its first Nseries phone with Xenon flash. 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.[68] The service became commercially available in the second half of 2008.

The first Nseries device, the N90, utilised the older Symbian OS 8.1 mobile operating system, as did the N70. Subsequently Nokia switched to using SymbianOS 9 for all later Nseries devices (except the N72, which was based on the N70). Newer Nseries devices incorporate newer revisions of SymbianOS 9 that include Feature Packs. The N800, N810, N900, N9 and N950 are as of April 2012 the only Nseries devices (therefore excluding Lumia devices) to not use Symbian OS. They use the Linux-based Maemo, except the N9(50), which uses MeeGo.

In 2008, Nokia released the Nokia E71 which was marketed to directly compete with the other BlackBerry-type devices offering a full "qwerty" keyboard and cheaper prices.

Nokia stated that Maemo would be developed alongside Symbian. Maemo had since (Maemo "6" and beyond) merged with Intel's Moblin, and became MeeGo. MeeGo was later canceled and a development is now continued under name Sailfish OS.

The Nokia N8, from September 2010, is the first device to function on the Symbian^3 mobile operating system. Nokia revealed that the N8 will be the last device in its flagship N-series devices to ship with Symbian OS.

The Nokia 808 PureView has a 41-megapixel camera, more than any other smartphone on the market. It was released in February 2012 and contains a 1.3 GHz processor. On 25 January 2013, Nokia announced this was the last Symbian smartphone the company would make.

Reorganizations

Nokia opened its Komárom, Hungary mobile phone factory on 5 May 2000.

In March 2007, Nokia signed a memorandum with Cluj County Council, Romania to open a new plant near the city in Jucu commune. Moving the production from the Bochum, Germany factory to a low wage country created an uproar in Germany. Nokia recently moved its North American Headquarters to Sunnyvale.

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. This diminished Nokia's public image in Finland, and produced a number of court cases and an episode of a documentary television show critical of Nokia.

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.

In June 2006, Jorma Ollila left his position as CEO to become the chairman of Royal Dutch Shell and to give way for Olli-Pekka Kallasvuo.

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 November 2008, Nokia announced that it was ceasing mobile phone distribution in Japan. Following early December, distribution of Nokia E71 is cancelled, both from NTT DoCoMo and SoftBank Mobile. Nokia Japan retains global research & development programs, sourcing business, and an MVNO venture of Vertu luxury phones, using docomo's telecommunications network.

In April 2009, Check Point announced that it has completed the acquisition of Nokia's network security business unit.

In February 2012, Nokia announced that it was laying off 4,000 employees to move manufacturing from Europe and Mexico to Asia.

In March 2012, Nokia announced that it was laying off 1,000 employees from its Salo, Finland factory to focus on software. In June 2012, research facilities in Ulm, Germany and Burnaby, Canada were closed, resulting in the loss of further jobs. The company also announced its plan to lay off 10,000 jobs globally by the end of 2013.

In January 2013, Nokia announced the lay off of about 1,000 employees from its IT, production and logistics divisions. The company planned to transfer the jobs of about 715 employees to subcontractors.

Acquisitions

The Nokia E55 from the business segment of the Eseries range

On 22 September 2003, Nokia acquired Sega.com, a branch of Sega which became the major basis to develop the Nokia N-Gage device.

On 16 November 2005, Nokia and Intellisync Corporation, a provider of data and PIM synchronization software, signed a definitive agreement for Nokia to acquire Intellisync. Nokia completed the acquisition on 10 February 2006.

On 19 June 2006, Nokia and Siemens AG announced the companies would merge their mobile and fixed-line phone network equipment businesses to create one of the world's largest network firms, Nokia Siemens Networks. Each company has a 50% stake in the infrastructure company, and it is headquartered in Espoo, Finland. The companies predicted annual sales of €16 bn and cost savings of €1.5 bn a year by 2010. About 20,000 Nokia employees were transferred to this new company.

On 8 August 2006, Nokia and Loudeye Corp. announced that they had signed an agreement for Nokia to acquire online music distributor Loudeye Corporation for approximately US$60 million. The company has been developing this into an online music service in the hope of using it to generate handset sales. The service, launched on 29 August 2007, is aimed to rival iTunes. Nokia completed the acquisition on 16 October 2006.

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

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

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 billion. Nokia finalized the acquisition on 10 July 2008.

In September 2008, Nokia acquired OZ Communications, a privately held company with approximately 220 employees headquartered in Montreal, Canada.

On 24 July 2009, Nokia announced that it will acquire certain assets of Cellity, a privately owned mobile software company which employs 14 people in Hamburg, Germany. The acquisition of Cellity was completed on 5 August 2009.

On 11 September 2009, Nokia announced the acquisition of "certain assets of Plum Ventures, Inc, a privately held company which employed approximately 10 people with main offices in Boston, Massachusetts. Plum will complement Nokia's Social Location services".

On 28 March 2010, Nokia announced the acquisition of Novarra, the mobile web browser firm from Chicago. Terms of the deal were not disclosed. Novarra is a privately held company based in Chicago, IL and provider of a mobile browser and service platform and has more than 100 employees.

On 10 April 2010, Nokia announced its acquisition of MetaCarta, whose technology was planned to be used in the area of local search, particularly involving location and other services. Financial details of acquisition were not disclosed.

In 2012, Nokia acquired Smarterphone, a developer of an operating system for feature phones, and the imaging company Scalado.

Loss of Market Share in Smartphones

Apple Inc. came into the smartphone market that would later put pressure on Nokia. Although originally launched in 2007, the iPhone continued to be outsold and unfavoured by Nokia smartphones, most notably the Nokia N95. Symbian had a dominating 62.5% market share as of Q4 2007 – ahead of its closest competitors Microsoft's Windows Mobile (11.9%) and RIM (10.9%). However, with the launch of the iPhone 3G in 2008, Apple's market share doubled by the end of that year, YoY, and iPhone OS (now known as iOS) operating system market share pulled ahead of Windows Mobile. Although in Q4 2008, Nokia was still by far the largest smartphone maker with a 40.8% share, it had a decline of over 10% since Q4 2007, mirrored with Apple's increasing share. The N95's successor Nokia N96, released in late 2008, proved to be much less favorable, although the Nokia 5800 XpressMusic was mainly considered to be the iPhone 3G's main rival. Despite the brilliant critical and commercial success of the Nokia E71, it was not enough to stop Nokia's smartphone market slide. On 24 June 2008, Nokia bought the Symbian operating system and the next year made it open source.

In early 2009, the Nokia N97 was released, a touchscreen device with a landscape QWERTY slider that focused on social networking. It was overall a commercial success despite its mainly mixed reception. The N97's closest competitor was the iPhone 3GS. 2009 was a successful year for Nokia's business smartphone market – several key devices were launched such as the Nokia E52 which gained positive reception. However, Symbian market share dropped from 52.4% in Q4 2008 to 46.1% a year later. RIM increased its share during the same period from 16.6% to 19.9%, but the big winner was once again Apple who increased the share from 8.2% to 14.4%. Android grew too but at 3.9% it was still a minor player.

2010 was a bad year for Nokia and Symbian, and a very successful one for Google. Pressure on Nokia increased dramatically as the Linux-based operating system Android continued to make extraordinary gains. Other Symbian makers including Samsung and Sony Ericsson chose to make Android-powered smartphones instead of Symbian, and by mid-2010 Nokia itself was the only OEM of the operating system outside of Japan. Nokia developed the next generation Symbian platform, Symbian^3, to replace S60. In April 2010, Nokia officially announced the Nokia N8 smartphone, packing a 12 megapixel camera with Xenon flash, a metal aluminium body, and the first device running Symbian^3. It was released in October. Despite several improvements in Symbian^3, it was still not favored by the public. The Guardian for example, put the N8 review's headline as Nokia N8 review: like hardware? You'll love this. Like software? Ah.... ZDNet stated that the Symbian's operating system is not as intuitive as Android and iOS. The Guardian said that despite Symbian's touchscreen improvements over S60 5th Edition, it was still not a good experience. By Q4 2010, Symbian's market share dipped to 32%, whereas Android made a major rise to 30%. Despite losing market share, the smartphone unit was profitable and smartphone sales increased in absolute numbers every quarter during the year 2010. It has been estimated that 4 million units of the Nokia N8 have been sold in Q4 2010.

Alliance with Microsoft

 

On 11 February 2011, Nokia's CEO Stephen Elop, a former head of Microsoft business division, unveiled a new strategic alliance with Microsoft, and announced it would replace Symbian and the MeeGo project with Microsoft's Windows Phone operating system except for non-smartphones. Nokia was also to invest into the Series 40 platform and release a single MeeGo product in 2011, which shipped as the Nokia N9.

As part of the restructuring plan, Nokia planned to reduce spending on research and development, instead customising and enhancing the software line for Windows Phone 7. Nokia's "applications and content store" (Ovi) becomes integrated into the Windows Phone Store, and Nokia Maps is at the heart of Microsoft's Bing and AdCenter. Microsoft provides developer tools to Nokia to replace the Qt framework, which is not supported by Windows Phone 7 devices.

Symbian became described by Elop as a "franchise platform" with Nokia planning to sell 150 million Symbian devices after the alliance was set up. MeeGo emphasis was on longer-term exploration, with plans to ship "a MeeGo-related product" later in 2012. Microsoft's search engine, Bing was to become the search engine for all Nokia phones. Nokia also intended to get some level of customisation on WP7.

After this announcement, Nokia's share price fell about 14%, its biggest drop since July 2009. Following the replacement of the Symbian system, Nokia's smartphone sales figures, which had previously increased, collapsed dramatically. From the beginning of 2011 until 2013, Nokia fell from its position as the world's largest smartphone vendor to assume the status of tenth largest.

As Nokia was the largest mobile phone and smartphone manufacturer worldwide at the time, it was suggested the alliance would make Microsoft's Windows Phone 7 a stronger contender against Android and iOS. Because previously increasing sales of Symbian smartphones began to fall rapidly in the beginning of 2011, Nokia was overtaken by Apple as the world's biggest smartphone maker by volume in June 2011. In August 2011 Chris Weber, head of Nokia's subsidiary in the U.S., stated "The reality is if we are not successful with Windows Phone, it doesn't matter what we do (elsewhere)." He further added "North America is a priority for Nokia (...) because it is a key market for Microsoft.".

Nokia reported "well above 1 million" sales for its Lumia line up to 26 January 2012, 2 million sales for the first quarter of 2012, and 4 million for the second quarter of 2012. In this quarter, Nokia only sold 600,000 smartphones (Symbian and Windows Phone 7) in North America. For comparison, Nokia sold more than 30 million Symbian devices world-wide still in Q4 2010 and the Nokia N8 alone sold almost 4 million in its first quarter of sale. In Q2 2012, 26 million iPhones and 105 million Android phones have been shipped, but only 6.8 million devices with Symbian and 5.4 million with Windows Phone.

While announcing an alliance with Groupon, Elop declared "The competition... is not with other device manufacturers, it's with Google."

European carriers have stated that Nokia Windows phones are not good enough to compete with Apple iPhone or Samsung Galaxy phones, that "they are overpriced for what is not an innovative product" and that "No one comes into the store and asks for a Windows phone".

In June 2012, Nokia chairman Risto Siilasmaa told journalists that Nokia had a back-up plan in the eventuality that Windows Phone failed to be sufficiently successful in the market.

Financial difficulties

Market share of Symbian, Windows Mobile and Windows Phone 7 among US smartphone owners from Q1 2011 to Q2 2012 according to Nielsen Company.

Amid falling sales, Nokia posted a loss of 368 million euros for Q2 2011, while in Q2 2010 had still a profit of 227 million euros. On September 2011, Nokia has announced it will lose another 3,500 jobs worldwide, including the closure of its Cluj factory in Romania.

On 8 February 2012, Nokia Corp. said to cut around 4,000 jobs at smartphone manufacturing plants in Europe by the end of 2012 to move assembly closer to component supplier in Asia. It plans to cut 2,300 of the 4,400 jobs in Hungary, 700 out of 1,000 jobs in Mexico, and 1,000 out of 1,700 factory jobs in Finland.

On 14 June 2012, Nokia announced to cut 10,000 jobs globally by the end of 2013 and shut production and research sites in Finland, Germany and Canada in line with continuing losses and the stock price falling to its lowest point since 1996. Today, Nokia's market value is below $10 billion.

In total, according to actualized and planned laid-offs Nokia will have laid off 24,500 employees by the end of 2013. Nokia has already laid off 7,000 employees in the first stage: 4,000 staff and transferred also 3,000 to services firm Accenture. Nokia also closed its factory in Cluj, Romania that decreased the workforce by 2,000 employees, and restructured the Location & Commerce business unit that decreased the workforce by 1,200 employees. In February 2012, Nokia unveiled a plan to cut 4,000 more jobs at its plants in Finland, Hungary and Mexico as it moves smartphone assembly work to Asia. The most recent plan is to cut further 10,000 jobs globally by the end of 2013. Nokia had 66,267 personnel in its Devices&Services, NAVTEQ and Corporate Common Functions units combined, this has been calculated by subtracting the personnel of Nokia Siemens Networks from the total personnel of Nokia Group based on the full year report of 2010. Therefore, the personnel would decrease by approximately 36 percent by the end of 2013 when compared to the end of 2010 that best depicts the lay-offs that have resulted from the strategy change in February 2011 and competition in the central mobile phone business units recently.

On 18 June 2012, Moody's downgraded Nokia rating to junk. Nokia CEO admitted on 28 June 2012 that company's inability to foresee rapid changes in mobile phone industry was one of the major reasons for the problems company was facing.

On 4 May 2012, a group of Nokia investors filed a class action against the company as a result of disappointing sales of Nokia phones running on the Windows Phone platform. On 22 August 2012, it was reported that a group of Finnish Nokia investors were considering gathering signatures for the removal of Elop as CEO.

On 29 October 2012, Nokia said its high-end Lumia 820 and 920 phones, which will run on Microsoft's Windows Phone 8 software, will reach first operators and retail outlets in some European markets including France and Britain and later in Russia and Germany as well as other select markets.

On 5 December 2012, Nokia introduced two new smartphones, the Lumia 620 and Lumia 920T. The 620 was released in January 2013.

In January 2013, Nokia reported 6.6 million smartphone sales for Q4 2012 consisting of 2.2 million Symbian and 4.4 million sales of Lumia devices (Windows Phone 7 and 8). In North America, only 700,000 mobile phones have been sold including smartphones.

In May 2013 Nokia released the Asha platform for its low-end borderline smartphone devices. The Verge commented that this may be a recognition on the part of Nokia that they are unable to move Windows Phone into the bottom end of smartphone devices fast enough and may be "hedging their commitment" to the Windows Phone platform.

In December 2012, Nokia announced that it would be selling its headquarters Nokia House for €170 million. In the same month, Nokia announced its partnership with the world's largest cellular operator China Mobile to offer Nokia's new Windows-based phone, the Lumia 920, as Lumia 920T, an exclusive Chinese variant. The partnership was a bid by Nokia to connect with China Mobile's 700 million-person customer base.

Following the second quarter of 2013, Nokia made an operating loss of €115m (£98.8m), with revenues falling 24% to €5.7bn, despite sales figures for the Lumia exceeding those of BlackBerry's handsets during the same period. Over the nine-quarters prior to the second quarter of 2013, Nokia sustained €4.1 billion worth of operating losses. The company experienced particular problems in both China and the U.S.; in the former, Nokia's handset revenues are the lowest since 2002, while in the U.S., Francisco Jeronimo, analyst for research company IDC, stated: "Nokia continues to show no signs of recovery in the US market. High investments, high expectations, low results."

In July 2013, Nokia announced that Lumia sales were 7.4 million for the second quarter of the year – a record high.

Acquisition of mobile phone business by Microsoft

On 2 September 2013, Microsoft, the producer of the Windows Phone operating system that has powered all of Nokia's recent smartphone products, announced that it would acquire Nokia's mobile device business in a deal worth €3.79bn, along with another €1.65bn to license Nokia's portfolio of patents for 10 years; a deal totaling at over US$7.17bn. Steve Ballmer considered the purchase to be a "bold step into the future" for both companies, primarily as a result of its recent collaboration. Following the sale, Nokia will focus on three core business units; its Here mapping service (which Microsoft will license for four years under the deal), its infrastructure division Nokia Solutions and Networks (NSN), and on developing and licensing its "advanced technologies". Pending regulatory approval, the acquisition is expected to close in early 2014. As part of the deal, a number of Nokia executives will join Microsoft, and Stephen Elop will step down as CEO of Nokia and become the head of Microsoft's devices team; Risto Siilasmaa will replace Elop as interim CEO.

While Microsoft will license the Nokia brand under a 10-year agreement, Nokia will be unable to use its name on smartphones and will be subject to a non-compete clause preventing it from producing any mobile devices under the Nokia name through 31 December 2015. Microsoft will acquire the rights to the Asha and Lumia brands as part of the deal.

In an interview with Helsingin Sanomat, former Nokia executive Anssi Vanjoki commented that the Microsoft deal was "inevitable" due to the "failed strategy" of Stephen Elop.

A media report revealed in mid-September 2013 that Nokia tested the Android operating system on both its Lumia and Asha hardware. The future of these projects is unknown.

In October 2013, Nokia predicted a more profitable future for its NSN networks equipment business, which will become the company's main business once its former flagship phones division is sold to Microsoft $5.2 billion in 2014.

Operations

In 2011, Nokia had 130,000 employees in 120 countries, sales in more than 150 countries, global annual revenue of over €38 billion, and operating loss of €1 billion. It was the world's largest manufacturer of mobile phones in 2011, with global device market share of 23% in the second quarter.

The Nokia Research Center, founded in 1986, is Nokia's industrial research unit consisting of about 500 researchers, engineers and scientists; it has sites in seven countries: Finland, China, India, Kenya, Switzerland, the United Kingdom and the United States. Besides its research centers, in 2001 Nokia founded (and owns) INdT – Nokia Institute of Technology, a R&D institute located in Brazil. Nokia operates a total of 7 manufacturing facilities located at Manaus, Brazil; Beijing and Dongguan, China; Komárom, Hungary; Chennai, India; Reynosa, Mexico; and Changwon, South Korea. Nokia's industrial design department is headquartered in Soho in London, UK with significant satellite offices in Helsinki, Finland and Calabasas, California in the US.

Nokia is a public limited-liability company listed on the Helsinki, Frankfurt, and New York stock exchanges. Nokia plays a very large role in the economy of Finland. It is an important employer in Finland and several small companies have grown into large ones as its partners and subcontractors. In 2009 Nokia contributed 1.6% to Finland's GDP, and accounted for about 16% of Finland's exports in 2006.

Divisions

Since 1 July 2010, Nokia comprises three business groups: Mobile Solutions, Mobile Phones and Markets. The three units receive operational support from the Corporate Development Office, led by Kai Öistämö, which is also responsible for exploring corporate strategic and future growth opportunities.

On 1 April 2007, Nokia's Networks business group was combined with Siemens's carrier-related operations for fixed and mobile networks to form Nokia Siemens Networks, jointly owned by Nokia and Siemens and consolidated by Nokia. Nokia bought the 50% share and took full control of the group on 3 July 2013.

Mobile Solutions

The Nokia N900, a Maemo 5 Linux based mobile Internet device and touchscreen smartphone from Nokia's Nseries portfolio.

Mobile Solutions is responsible for Nokia's portfolio of smartphones and mobile computers, including the more expensive multimedia and enterprise-class devices. The team is also responsible for a suite of internet services (formerly under the Ovi brand), with a strong focus on maps and navigation, music, messaging and media. This unit is led by Anssi Vanjoki, along with Tero Ojanperä (for Services) and Alberto Torres (for MeeGo Computers).

Mobile Phones

The Nokia Lumia 920 using inductive charging

See also: Category:Nokia mobile phones

Mobile Phones is responsible for Nokia's portfolio of affordable mobile phones, as well as a range of services that people can access with them, headed by Mary T. McDowell. This unit provides the general public with mobile voice and data products across a range of devices, including high-volume, consumer oriented mobile phones. The devices are based on GSM/EDGE, 3G/W-CDMA, HSDPA and CDMA cellular technologies.

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. In 2011, Nokia's market share in the mobile phone market had dropped to 27% (417 million phones).

Anssi Vanjoki resigned a few days before Nokia World 2010 and under new leadership team Jo Harlow will look into the affairs of Smartphones portfolio.

On 27 April 2011, The Register reported that Nokia was secretly developing a new operating system called Meltemi aiming at the low-end market. It was believed it would be replacing the S30 and S40 operating systems. Due to low-end market customers' demand of having smartphone features in their feature phone, the OS would have included some features exclusive to high-end smartphones. On 26 July 2012, it was announced that Nokia had abandoned the Meltemi project as a cost-cutting measure.

Markets

Markets is responsible for Nokia's supply chains, sales channels, brand and marketing functions of the company, and is responsible for delivering mobile solutions and mobile phones to the market. The unit is headed by Niklas Savander.

Subsidiaries

Nokia has numerous subsidiaries. The largest in terms of revenues is Navteq, a Chicago, Illinois-based provider of digital map data and location-based content and services for automotive navigation systems, mobile navigation devices, Internet-based mapping applications, and government and business solutions. Navteq was acquired by Nokia on 1 October 2007. Navteq's map data is part of the Nokia Maps online service where users can download maps, use voice-guided navigation and other context-aware web services.

Until 2008 Nokia was the major shareholder in Symbian Limited, a software development and licensing company that produced Symbian OS, a smartphone operating system used by Nokia and other manufacturers. In 2008 Nokia acquired Symbian Ltd and, along with a number of other companies, created the Symbian Foundation to distribute the Symbian platform royalty free and as open source.

Nokia Solutions and Networks

Main article: Nokia Solutions and Networks

Nokia Solutions and Networks (NSN), previously known as Nokia Siemens Networks B.V. is a multinational data networking and telecommunications equipment company headquartered in Espoo, Finland. NSN was a joint venture between Nokia (50.1%) and Siemens (49.9%), but is now a wholly owned subsidiary of Nokia. It is the world's fourth-largest telecoms equipment manufacturer measured by 2011 revenues (after Ericsson, Huawei and Alcatel-Lucent). NSN has operations in around 150 countries.

The creation of NSN was announced on 19 June 2006, when Nokia and Siemens announced that they would merge their mobile and fixed-line phone network equipment businesses.[100] The NSN brand identity was subsequently launched at the 3GSM World Congress in Barcelona in February 2007. NSN provides wireless and fixed network infrastructure, communications and networks service platforms, as well as professional services to operators and service providers. NSN focuses on GSM, EDGE, 3G/W-CDMA, LTE and WiMAX radio access networks; core networks with increasing IP and multiaccess capabilities and services.

In July 2013 it was announced that Nokia buys back all shares in Nokia Siemens Networks for a sum of 2.21 million US dollars.