Across the Globe, Finland is known for various things, heavy metal bands, saunas, unique bus stop etiquette, and Nokia.
Currently employing over 100,000 people worldwide and boasting annual revenues of over $29 billion, Nokia has risen to become a global force. But its beginnings in history are as unique as the country where it all started. In this article, we'll examine the rise of Nokia and how it became one of the world leaders in mobile phone technology. Founded over 150 years ago, Frederick Artistan wanted to capitalise on Finland's huge forestry industry and created a paper mill near temporary. Not long afterward, he built a second paper mill near a town called Nokia on the Nokia and Verta River. A few years later, Frederick partnered with a man by the name of Leo McAllen, who had grander visions than running a couple of mere paper mills in the Backcountry of Finland. He convinced Frederick the former public company Nokia AB and after Frederick retired Macallin used the same river to start generating electricity in a new venture for the company.
At the same time, a man by the name of Edward Pollon founded finish Rubber Works, which made rubber products like boots and tyres. after World War One, macallans Nokia AB was failing and was bought out by Finnish rubber works, enabling the company to continue generating electricity and paper products. 1/3 company was also destined to join the Nokia family of companies. In 1912 Finnish cable works was founded and then acquired by Finnish Rubber works 20 years later? The timing of their deal could not have been better. After the devastation of World War 2, the Soviet Union was desperate to rebuild its infrastructure for Finnish cable works, a company which sold telephone and electrical cables. They were positioned to make a fortune. The massive influx of cash helped the company strengthen its financial position, expanding their opportunities into new markets. The conglomerate would grow into an unrecognizable company from the modern Nokia that we've come to know today. They operated within nearly every industry you can imagine. TV production, paper manufacturing, gas masks, plastics and chemicals to list A few. The start of the new focus happened in the early 70s when Nokia invented a new digital switch for telephone exchanges. This began a long history of developing telephone technology that helped transform the cellular systems used around the world. In the late 60s, Nokia was already producing radio telephones that were used in cars and by the military. By 1978, they claimed 100% coverage across all of Finland with their radio car phone systems. It was just a year later that the diverse Nokia took steps to align with a TV maker called Salora to develop a brand new Nordic mobile telephone network. It was the world's first cellular network, an upgrade from the previous radio system used at the time. It was known as the 1G system, the very first cellular generation, which used analog signal.
By the early 1980s, Nokia launched its first car phone, the Mobira senator. It was effective but incredibly bulky, with each unit weighing in at 10 kilograms. Soon after, they released the Mobira Talkman half the weight of the first version, but still too clunky and only accessible in a car. The first truly portable cellular phone was the mobira cityman, weighing in at just 800 grams, but it came with a huge price tag at 24,000 Finnish marks. The equivalent of 8200 U.S. dollars today.
Due to its exorbitant price, the city man didn't really catch on. That was until a photo of President Mikhail Gorbachev, president of the USSR, was photographed using it in Helsinki in 1987. Almost overnight, it became a cult status symbol. Owning it proved your wealth and power. It also earned the nickname the Gorba. After the Soviet president himself, Nokia continued developing its cellular network, establishing the two GSM network that went from analog signals to a digital signal. By 1987, the 2G system became standard across all of Europe. It enabled data to be sent digitally, eventually paving the way for SMS text messaging. In July of 91, the Finnish Prime Minister made the first phone call on the 2G network, and about a year later the world's first text message was sent. It read. Merry Christmas. The 2G system would later go on to take the world by Storm, eventually gaining over 3 billion users.
In the early 90s Nokia was facing some financial problems. In an effort to streamline the business, they started to sell off divisions and create separate entities. First went their paper industry, the origin of the whole company, followed soon by tyres and rubber production. After selling off most of the other industries, Nokia had one singular focus, telecommunications. In 1994 Nokia released its 2100, a new entry level phone series designed for anybody to use. It included now iconic Nokia ringtone and again, snake demand went through the roof. Originally, Nokia predicted a run of 400,000 units for this series. They ended up selling over 20 million worldwide. Nokia couldn't make the 2100 fast enough. They saw that managers were trying their hardest to buy just enough materials to keep their factories producing. They created a whole new division to overhaul their entire supply chain in Western Europe alone. Mobile phone users went from 5,000,000 to 23 million in just 4 short years. Faced with the same challenges as other brands like Ericsson and Motorola, Nokia had to make drastic changes if they were going to keep up with the increased demand for mobile phones. Instead of relying on one supplier in Japan, Nokia learned how to build their technology in their home country and taught it to a finished electronics supplier. They also outsourced their plastics to a Finnish company as well for their five factories around the world, once they solved their supply chain issue, Nokia rapidly outpaced its competitors. From 1996 to 2001, they multiplied their revenue five times over. What's also truly amazing is their domination of the industry. They had become the world's largest mobile phone provider, a position they held for 14 years. It appeared nothing could stop the rise of Nokia. And then this happened.
In the same year, Apple introduced the iPhone, which would mark the beginning of the end. For Nokia, the iPhone was more than a mere sleek device made from premium materials, a major upgrade from the cheap feeling plastic used by other smartphones. At the time, it was also the world 's first smartphone to feature a multi touch display. Overnight, the smartphone touch screen Revolution was born. The world would begin its shift away from physical plastic. The digital on screen keyboards over the next few years, Nokia's global market share would crater to less than 5% today. Its stock price has plummeted over 90% since the iPhones debut. Nokia's greatest lesson is to be wary of complacency. Innovation went both ways. On one hand, the advent of 1G enabled their success. On the other hand, it was their unwillingness to take risks which allowed Apple the opportunity to steal their throne.
Apple also introduced the App Store, which brings us to today's sponsor, Blinkist, our favorite app, which allows you to summarize books in 15 minutes or less. Blinkist has thousands of nonfiction titles, but you're definitely going to want to check out. One blinkist book that we're currently reading is built to last by Jim Collins. The book explores the principles that allow companies to last for generations. And before we go, let us know in the comments below if you have ever used a Nokia phone.
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