Nokia and the Global Mobile Phone Industry

            
 
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Case Details:

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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Excerpts

The Rise to the Top

Nokia drew on its experience of setting up Nordic cellular networks (which were more advanced than those used by Japan, the rest of Europe, and the US at that time) to successfully adopt the GSM standard. The company was listed on the New York Stock Exchange in 1994. Over the 1990s, Nokia became one of the most successful mobile phone manufacturers in the world and began to enter non-Scandinavian markets as well.

Nokia was also one of the first mobile manufacturers to realize the importance of the design element in mobile phones and its phones were more aesthetically designed than those of competitors. In 1998, Nokia overtook Motorola to become the largest mobile manufacturer in the world...

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Designed for Innovation

Nokia was the first mobile phone manufacturer to realize in the late 1990s that phones no longer played only a functional role; they were also becoming fashion symbols.

Until Nokia began emphasizing the design aspect, mobile phones were bulky, bricklike devices with an external antenna and a standard keypad. Manufacturers emphasized functionality over aesthetic appeal.

Nokia broke new ground in 1999, when it launched its 8200 handset on the catwalk at a Paris fashion week...

The Decline

In mid-2004, The Economist wrote, "When a firm dominates its market, especially one that is driven by constant technological advances, it risks becoming so fixated with trying to ward off what it reckons to be its most powerful challenger that it leaves itself vulnerable to attack from other directions."Analysts said this statement accurately characterized what happened with Nokia.

In the early 2000s, Microsoft Corp (Microsoft) announced its decision to enter the mobile phones market. The announcement set alarm bells ringing in Nokia as Microsoft had the reputation of being an aggressive competitor...

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