© Evertiq Business | June 14, 2011

Is it back to wellies for Nokia?

Nokia is about to lose its smartphone crown to Samsung Electronics and Apple, after leading the pack since 1996. Quo vadis, Nokia?
Investment bank Nomura states - in a Reuters article - that Nokia will lose its status as the world's largest smartphone manufacturer to Samsung Electronics (2Q/2011). Nomura even predicts that the Finnish giant will fall behind Apple to third place (in 3Q/ 2011) and sees HTC levelling with Nokia during 2012.

On May 31, the mobile phone giant abandoned it 2Q key targets and speculations are running high on a possible split up of the company. Despite all those gloomy forecasts, Nokia remains the world’s largest mobile phone manufacturer due to its strong position in basic devices and its wider distribution network in emerging countries.

Back to the roots ain't so bad

Once upon a time the motto of the world was "where the Finns lead, the rest of us will follow". Now it seems more like "Back to the roots ain't so bad".

But did you know that Nokia started out as an - rather obscure - paper maker in 1865? Well, actually it was 1868. That year, mining engineer Fredrik Idestam established his second mill near the Finnish town of Nokia. Soon other companies decided to also establish factories in Nokia - Finnish Rubber Works for example.

And the latter started - in the 1920's - to use Nokia as their brand name. And here, the aforementioned rubber boots come in. In addition to footwear (galoshes) and tyres, Finnish Rubber Works later went on to manufacture rubber bands, industrial parts and raincoats.

After World War II the Finnish Rubber Works bought the majority of Finnish Cable Works - which manufactured cables for telegraph and telephone networks. The latter had established an electronics department, which - by the time the two companies officially merged in 1967 to form Nokia Group - was generating 3% of the group's net sales and employed under 500 people. (Nokia Group now has some 131'000 employees worldwide; minus those laid off recently following the deal with Microsoft)

During the deep recession in Finland at the beginning of the 1990s, Nokia started streamlining its businesses. Non-core business operations (and here we have our rubber boots again) were divested and the company decided to focus on telecommunications. By 1998, Nokia had become the world's largest mobile phone manufacturer.

No good story without a rumour

A group of businessmen is said to have tried to sell Nokia during the early 1990's to Swedish rival Ericsson, but were rejected. Go figure.
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