Less than 20 years ago, Nokia was the biggest mobile company in the world. One in two people used to own a Nokia phone but now they are not seen anywhere.
What is the reason behind Nokia’s massive failure? That is exactly what we will discuss in this post. We will take a look at the journey of Nokia- the story of its rise and fall.
The Start of Nokia
Nokia was established in 1865. It used to be a completely different company than the one we think of when we hear Nokia. Nokia was founded by Fredrik Idestam who was a Finnish mining engineer and businessman.
He named his company Nokia after the “Nokianvirta River” in the region of Pirkanmaa. He established the company as a groundwood paper mill. Nokia soon expanded into other industries such as tries, cable, rubber, TV, etc. The Nokia established Fredrik Idestam was a completely different company than the one we all recognize today.
Nokia Enters the Mobile Industry
Nokia got into producing mobile phones when they bought a telephone company named “Mobira”. Nokia introduced its first car phone in 1982 and it was named “Nokia Mobira Senator”. It weighed almost 10 kilograms. Nokia kept improving and made the “Nokia Mobira Talkman”.
It was said to be the first transportable phone as it could be used in and out of the car. Nokia was facing competition from Motorola as Motorola launched the first hand-held phone that could connect over Bell’s AMPS in 1984. It weighed more than one kilogram but it soon became a must-have accessory for businessmen.
In 1987, Nokia made large strides by launching its first handheld mobile phone. It was called the “Nokia Mobira Cityman”. This model was an instant hit as it could be used anywhere. It weighed only 800 grams and Nokia became famous all around the world with this product.
The concept of a handheld mobile phone was incredible during this time as people were habituated to use telephones. People no longer needed to be home or next to a payphone to make a call. With the Nokia phone, you could make calls anytime and anywhere.
In 1988-1989, Nokia started to face its first major struggle. The Soviet Union began to collapse and the demand for Nokia phones started to go down. Nokia was still involved in their other businesses during this time. But the management in Nokia was changed and Jorma Ollila took over Nokia.
He made a decision that would change Nokia’s fate forever. He decided to move Nokia away from all the other businesses and focus solely on mobile phones.
After this decision, the golden era of Nokia began in the 1990s. Things started to go uphill for Nokia from there onwards. In 1992, Nokia released their new model – “Nokia 1011”. Nokia’s phones started selling like hotcakes in the U.S and European markets.
Their best-selling phones of the 2100 series were launched in 1994. Nokia 1011 was the first feature phone made by Nokia. They expected to sell 1 million units of the phone. But they underestimated how much people loved their products and they sold 20 million phones instead.
Nokia started launching mobiles after mobile and every single phone they made was selling very well. Nokia made their efforts in launching phones with good software and they realized that the software will be a key component in this industry.
While others made bulky phones, Nokia made sleek phones with good software that were very easy to use. In 1988, Nokia took over Motorola to become the biggest mobile phone manufacturer in the world.
Nokia continued to smash its rival companies in the early 2000s. Nokia 5110 and 1100 sold like crazy and they are among the best-selling phones of all time. In 2003, Nokia released Nokia 6650 which was the world’s first 3G phone. Nokia also released their first-ever camera phone in the same year – Nokia 7650.
Where Nokia Went Wrong
The gaming industry was big at the time. Products like PS2 and Xbox reached their prime time and they were selling really well. Nokia wanted to make its way into this market.
They released their infamous “Nokia Ngage”. It was the first terrible mistake that Nokia did. It was poorly designed and while it was marketed to be a functional mobile and gaming device, it didn’t do a good job in either category.
Motorola released a flip phone next year that was a major hit in the market. Nokia started getting criticism from their investors as they were investing too much in high-end smartphones.
Even though Nokia was still doing well, the investors weren’t happy and Olli-Peka Kallasvuo took over the company. This change in management marked the beginning of the end for Nokia.
The Fall of Nokia
The market was beginning to change and Nokia failed to adapt to these changes. When Apple released the iPhone, things started to fall apart for Nokia. The iPhone had a full-touch interface and it had a great OS. The Nokia flagship phones of the N Series didn’t seem to be all that impressive anymore.
To make matters worse for Nokia, Google released their first Android phone the very next year. The battle of the Operating Systems began. Nokia released that their biggest threat would be to fail in the software aspect. They focused on developing their software with two teams.
One team would revamp their existing operating system (Symbian) and the other team would work on building a new operating system- Meego. Instead of working as a unified system, the teams competed against each other for the attention of the top executives. The management spent more time dealing with internal politics rather than working on the phones.
Nokia lost its sense of urgency and innovation. They weren’t doing a good job at developing their own software and they refused to switch to Android OS. This was the main reason behind the demise of Nokia. Google and Apple have taken over the industry and wiped Nokia out with their new and better OS.
There was no coming back from there for Nokia. Nokia partnered with Microsoft to make Windows phones but those weren’t good enough to compete with the other products. In 2012, Samsung took over Nokia to become the largest mobile manufacturer in the world.
In 2014, Microsoft acquired Nokia and that was the end of the road of Nokia. It is fascinating to see such a massive company that seemed to do no wrong once fail miserably in a space of a few years.
Nokia remains to be one of the most universally loved brands in the world and they have a high brand recall of value. In the end, Nokia’s rise in internal politics and its lack of urgency caused its downfall.
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