x Abu Dhabi, UAETuesday 25 July 2017

Nokia, the water rat that built a top secret strategy

How an obscure Finnish rubber-boot company metamorphosed into the world's leading mobile phone maker.

The name Nokia comes from an old Finnish word for a small, dark-furred animal that lived on the banks of the Nokianvirta river. For most of the company's history since it was formed in 1871, it was best-known for making rubber shoes for the Finnish winter. How an obscure Finnish rubber-boot company named after a type of water rat metamorphosed into the world's leading mobile phone maker is not fully understood, even by market analysts.

Finland did, however, get in the game early and in 1987 launched the Mobira Cityman 900, later nicknamed the "Gorba" when the then Soviet leader Mikhail Gorbachev was pictured using one. But it was not until the era of GSM (Global System for Mobile Communications), the second generation mobile technology, that Nokia began to establish a true foothold in the international mobile telecommunications market.

The world's first commercial GSM call was made on July 1, 1991 in Helsinki, using a prototype Nokia GSM phone. By 1998, Nokia's early investment in GSM technologies had made it the world's largest mobile phone manufacturer. Throughout the 1990s, Nokia grew market share with ever smaller and more powerful mobile phones. It also introduced innovative design features such as locating the aerial inside the handset. Finnish executives at this point tended to attribute Nokia's rise to a kind of national destiny. But what really underpinned Nokia's success was its once top secret strategy of designing handsets for 12 to 16 specific user profiles such as "the housewife". Nokia's position of dominance remained unchallenged until the rise of rival high-end smartphones in the form of Research In Motion's BlackBerry range and the introduction of the first Apple iPhone in January 2007.

But despite these challenges, Nokia still leads the pack, with revenues of more than €10 billion (Dh51.71bn) in the second quarter of this year. business@thenational.ae