Nokia and the Global Mobile Phone Industry
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Case Code : BSTR167
Case Length : 12 Pages
Period : 1999-05
Organization : MG Rover
Pub Date : 2005
Teaching Note : Available
Countries : Global
Industry : Mobile Phone
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Positive Signs Contd...
Net profit rose 18 percent to $1.1 billion. Global handset sales rose 11 percent, prompting Nokia to increase its estimate of the size of the global handset market in 2005 by 100 million to 740 million.Commenting on Nokia's improved performance, Jussi Hyoty (Hyoty), an analyst at
securities firm FIM Securities, said, "Nokia's result was definitely better than
expected, and it shows that it's a growth company again."3
However, despite these positive signs, several analysts wondered whether Nokia
would ever be able to dominate the industry as it did in the late 1990s and the
first two years of the new century, especially in light of the aggressive
competition posed by several new Asian companies as well as more established
players like Motorola and Sony Ericsson.
Despite the relatively recent emergence of the mobile phone industry globally,
Nokia's company history goes back to the 1800s.
The company was first set up
on the banks of the river Nokia (after which it was named) in southwestern
Finland in 1865 by Fredrik Idestam, who was a mining engineer. The original
Nokia was a forest industry enterprise that primarily manufactured paper.
In 1898, Carl Henrik Lampen, a shopkeeper, and J.E.
Segerberg, an engineer, set up the Finnish Rubber Works Ltd. (FRW) to
manufacture rubber and associated chemicals. In 1912, Konstantin
Wikstrom, an engineer, set up the Finnish Cable Works (FCW) to
manufacture electrical cables for lighting purposes. These three
companies had business dealings with each other through the early 1900s
and eventually merged in 1967 to form the Nokia Corporation. The new
company had four major businesses - forestry, rubber, cable and
By 1980, Nokia was a large business conglomerate with several businesses
ranging from tires to televisions and computers to telecommunications.