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From a paper mill in the 7,2th century to a global leader in mobile phones, Nokia shone under Jorma Ollila, but lost ground with the rise of smartphones and was sold to Microsoft for XNUMX billion dollars.
Nokia’s history begins long before the era of mobile phones took the world by storm. Founded in 1865 by Fredrik Idestam as a paper mill in southwestern Finland, the company has evolved into a technology giant. Over the course of more than 150 years, it has undergone radical transformations, expanding its areas of operation and facing intense challenges in highly competitive markets.
The name Nokia originated from the second unit of the factory, near the Nokianvirta River. With the arrival of Leo Mechelin and later Eduard Polón, the company diversified its operations, entering the sectors of electric power, rubber and cables. This multifaceted base paved the way for the technological evolution that would come decades later. Let's understand below What happened to Nokia.
First steps in technology: from heavy industry to communications
In the 1960s, Nokia began investing in technology. Its first electronic device was a pulse analyzer for nuclear power plants, launched in 1962. This project opened the doors to new segments, such as military communication equipment, telephone exchanges and capacitors.
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The vision of expanding beyond traditional industry sectors marked Nokia's trajectory, positioning it as a brand ready to embrace the digital revolution that would unfold in the following decades.
The Jorma Ollila era and Nokia’s global rise – What happened to Nokia?
The milestone that consolidated Nokia as a world power came under the leadership of Jorma Ollila, who took over in the 1990s. Under his management, Nokia focused on the mobile phone market, gradually abandoning less promising sectors.
Ollila recognized the potential of mobile phones long before the technology became indispensable in people's lives. His strategy placed Nokia as a pioneer in the development of portable mobile phones, such as the Mobira Talkman and Mobira Cityman 900, manufactured in partnership with Salora Oy, and later consolidated its position with the creation of the GSM line — technology that revolutionized mobile communications.
During Jorma Ollila's heyday, Nokia led the global mobile phone market, accounting for over 40% of global sales in the early 2000s. The devices won over the public with their durability, ease of use and innovative features.
Smartphone revolution: the beginning of the transformation and new challenges to understand what happened to Nokia
Even though it dominated the mobile phone market, Nokia faced difficulties in adapting to the changes that smartphone revolution brought. The arrival of the iPhone in 2007 and the rise of Android radically changed consumer behavior, who began to demand more sophisticated devices, with touch interfaces and app stores.
Nokia maintained its focus on its own system, Symbian, which, although it was a reference in the late 1990s and early 2000s, quickly became obsolete in the face of new, more intuitive and dynamic operating systems.
While Apple and Google invested heavily in integrated ecosystems, Nokia was slow to react. This resistance to migrating to more modern platforms was one of the factors that accelerated its loss of market share.
Symbian and the delay in the smartphone race
The Symbian operating system was Nokia's greatest asset for years. Used in millions of devices from brands such as Sony Ericsson and Motorola, the Symbian reigned supreme until mid-2008. However, the fragmentation of the system, the constant bugs and the difficulty in adapting to new market demands undermined its competitiveness.
The inability to offer a fluid and modern user experience was decisive in the platform's decline, causing Nokia to lose consumers to competitors who were betting on Android and iOS.
Internal crisis and the entry of Microsoft
Amid its difficulties, Nokia faced a serious crisis of identity and governance. The appointment of Stephen Elop, a former Microsoft executive, as CEO in 2010 marked a drastic attempt to turn things around.
Elop, in his famous “burning platform memo,” described Nokia as a company on the brink of collapse. In an attempt to save the brand, he entered into a strategic alliance with Microsoft, abandoning Symbian in favor of the Windows Phone operating system.
The partnership aimed to create a third way in the smartphone market, competing directly against Android and iOS. Despite innovative products, such as the Lumia line, the strategy failed to recover the lost market share.
The sale to Microsoft and the definitive decline in the mobile sector
In 2013, faced with unsatisfactory results, Nokia sold its devices and services division to Microsoft for approximately US$7,2 billion. The transaction included patents and rights to the Nokia brand on mobile devices.
Despite the investment, the Microsoft failed to revitalize the Lumia line. Sales remained low, and the Windows Phone system did not attract enough developers to form a competitive ecosystem.
As a result, in 2016, Microsoft ended production of cell phones under the Nokia brand, marking the end of an era in the mobile phone sector.
What happened to Nokia after Microsoft left
Even outside the mobile phone market, Nokia maintained its activities in other segments. The Nokia Networks division, focused on network infrastructure, remained solid and was strengthened with the acquisition of Alcatel-Lucent.
The company also continued to invest in innovation through Nokia Technologies, responsible for patents, virtual reality technologies and industry solutions.
In 2016, Nokia licensed its brand to HMD Global, a company created by former Nokia executives. HMD has started manufacturing Android smartphones under the Nokia brand, bringing new devices such as the Nokia 6, Nokia 7 Plus and the relaunched Nokia 3310.
Returning to origins and new positioning in the market
Nokia currently focuses its operations on the telecommunications sector, offering solutions for 5G networks, the Internet of Things (IoT) and digital transformation for businesses. The company also maintains a strong presence in the development of emerging technologies for sectors such as healthcare, energy and smart cities.
In the smartphone segment, the partnership with HMD Global allowed Nokia to regain some of the public's trust, with products recognized for their build quality and continuous operating system updates.
The new strategy positions the brand as a reference for reliability and innovation, even in a more competitive and fragmented market.
Lessons from Nokia's history for the technology market
Nokia's history teaches valuable lessons about the importance of continuous innovation, adapting to change and managing crises. The company that dominated the global mobile phone market for more than a decade saw its empire crumble in just a few years due to its failure to adapt to technological changes.
What happened to Nokia reinforces the need to be aware of consumer trends and to invest permanently in research and development. Even in the face of great success, complacency can be fatal in highly innovative sectors.
Jorma Ollila's visionary leadership and global market dominance
When Jorma Ollila took over as head of Nokia, the company was still little known outside Europe. The strategy outlined was bold: invest heavily in mobile phone innovation and abandon sectors that were not directly linked to mobile communications.
A landmark decision was the focus on GSM (Global System for Mobile Communications), the communications standard that would revolutionize telecommunications in the 1990s. While competitors were still betting on local or short-range technologies, Nokia understood that the future would be global.
The result was impressive. In 1998, the Nokia has overtaken Motorola to become the world's largest mobile phone manufacturer. Between 1998 and 2007, its devices dominated the global market, being sold in more than 150 countries and popularizing access to mobile phones.
Under Ollila’s management, Nokia also implemented innovative organizational practices. The company focused on agile, decentralized teams with the freedom to create. This organizational culture enabled rapid launches and products tailored to different markets.
By the end of Ollila's tenure in 2006, Nokia had reached the peak of its influence: it accounted for about 40 percent of all global mobile phone sales. The brand was associated with innovation, durability and reliability.
What happened to Nokia? How the company lost its leadership: strategic mistakes in the smartphone revolution
Despite its strong leadership, Nokia failed to recognize the depth of change that smartphones would bring. The arrival of the iPhone in 2007 and the growth of Android in the years that followed radically changed consumer expectations.
Nokia's mistake was twofold: on the one hand, it underestimated the importance of a fluid touch-based user experience; on the other, it insisted on sticking with Symbian, an operating system that, despite its previous success, was difficult to program, unfriendly and unable to compete with Android and iOS.
Understand what happened to Nokia – factors that contributed to the decline were:
- Excessive conservatism: The company was hesitant to take risks with new designs and systems, prioritizing its traditional line of cell phones.
- Lack of ecosystem: While Apple and Google were creating robust app stores, Nokia was slow to build a competitive platform.
- Fragmented internal communication: Several divisions of the company competed with each other, generating inconsistent products and a loss of focus.
Internal resistance to adopting more modern systems delayed Nokia's ability to respond in a market that began to evolve rapidly year after year.
Nokia today: Focus on networks, 5G and digital transformation
After selling its mobile phone division to Microsoft and ending its direct participation in the mobile device market, Nokia focused its efforts on the telecommunications infrastructure sector.
Today, the company is one of the global leaders in building 5G networks, competing directly with Ericsson and Huawei. Nokia provides solutions to telecom operators in dozens of countries, including high-speed networks, data infrastructure and automation technologies.
In 2023, Nokia reported revenues of approximately €24 billion, with continued growth in the digital networks and services sector. The company invests heavily in research and development, allocating around 17% of its annual revenue to technological innovation.
In addition, Nokia is actively involved in projects in smart cities, digital health, sustainable energy and industrial connectivity — strategic areas for global digital transformation.
Nokia brand in the smartphone market through HMD Global
Although the original Nokia has stopped producing smartphones, the brand still survives in the hands of HMD Global. Since 2016, HMD has been releasing Android phones under the Nokia name, seeking to restore the brand's prestige.
Models such as the Nokia 7 Plus, Nokia 8.3 and reissues of the classic Nokia 3310 have won over nostalgic audiences and new consumers looking for reliability and simplicity.
Despite intense competition from giants like Samsung, Apple and Chinese manufacturers, HMD has managed to keep the Nokia brand alive in the mid-range and entry-level smartphone segment by focusing on constant updates and build quality.
Source: Tecmundo, CanalTech and Olhar Digital
