Of Nokia and Finland

In 2011 I took an opportunity to visit Nokia House in Espoo. I still remember looking out from the dining hall onto a semi-frozen lake with a few weather worn trees on an island.

In my mind that lake represents Finland and the attitude of its people. A nation which in its young(ish) history has successfully challenged larger foreign forces. Occupied by a Swedish monarchy till 1803 and then becoming a Russian domain, Finland gained its independence from Russia at the end of World War 2 after fighting for it since 1917 (an interesting history). The Finns are a strong and resilient people (Look up Simo Häyhä). Moving forward from this strife they have developed a culture with a standard of living which is amongst the highest in the world.

And this spirit is reflected in what still remains one of Finland’s most iconic brand – Nokia.

With 25th April 2014 being the day when Microsoft completes its  $7.2 billion acquisition of Nokia’s Devices & Services division, Microsoft will acquire the mobile device portfolio and some of the hardware manufacturing facilities from Nokia. This includes the flagship Windows Phone platform Lumia and the lower end smartphone family title Asha.

Nokia would retain its significant patent portfolio, its navigation and mapping family of product under the ‘Here’ brand, and the significant network infrastructure division which was until a few months ago know as Nokia Seimens Networks.

Nokia as a company has always been adaptive to the times. It began as a riverside paper mill in 1865, but did not get the Nokia name until 1871 when it’s founder Fredrik Idestam setup a second mill on the banks of the Nokiavirta river in the town of Nokia, which led him to name his business – Nokia.

In 1904 Finnish Rubber Works limited moved its manufacturing to the town of Nokia. This was to later become Nokia’s rubber manufacturing plant. In 1902 Nokia corporation also became the power generator and provider to the town of Nokia. Almost prophetically in 1912 a new company, the Finnish Cable Works moved into the town too. When the original Nokia was facing bankruptcy, to make sure that electricity production continues, Finnish Rubber Works, acquired Nokia and later also Finnish Cable works. The 3 companies which had been jointly owned since 1922 were merged in 1967 to form Nokia Corporation.

Since that time Nokia has produced paper, car and bicycle tyres, electrical cables, personal electronics, computers, electrical generators and extremely popular rubber boots. Nokia proved that at its core it is a forward thinking company when in the 1990’s it divested itself of all its non-telecom businesses.

Analysts have stated that this acquisition is not for the best. One of my favourite and one of the Industries most respected writer Om Malik thinks that it is a bad idea While the real consequences of this action may not be visible for a few months, I do believe it is for the best.

Despite being an ardent Apple user, I have a lot of respect for Microsoft as a software and services company. Microsoft in my opinion has done more for the democratisation of personal computing than any other company. However given the current state of the mobile computing ecosystem, it is vital for a company to be engaged in end to end product development. With that aim in mind, Microsoft has absorbed some of the best product, design and engineering talent in the world today. The eventuality of Lumia nee Windows Phone becoming another Xbox seems very plausible in my mind.

But what of Nokia? Through all this, The Nokia brand continues and the spirit of its founders endures and Finland probably is the better for it. A lot of core development for the Nokia mobile devices happened in Finland. Does this new position which Nokia now takes of being a Network engineer, a Navigation leader, not open up more avenues for a start-up or many start-ups ?Arguably, talent which may drain out of Nokia’s devices and services division as a result of the merger will look at more opportunities to develop advances in mobile technologies.

Also ultimately a company does have a responsibility to its shareholders. It can be stated that by retaining the profitable NSN, Here maps, and patent portfolio, and divesting the rest, Nokia stands by its shareholders. Ultimately, the new Nokia is ready, and is better equipped to move forward. Like the Finns.


The views and opinions expressed above are my personal views and do not reflect the views or statements of my employers, clients or their related parties.