A PROJECT REPORT ON

“Telecommunication Company NOKIA”

Submitted to the Department of Electronics & Communication

EngineeringIn Partial fulfillment of the Requirement for the Degree of

Bachelor of Technology
(Electronics Engineer)
: Presented & Submitted By :
Deepak Sharma (u23ec179) Hari Gupta (u23ec166)
Surendra Gamit (u23ec195) Manish Kumar (u23ec178)

B.TECH. 2nd Year(3rd sem)

(Year:2024-25)

DEPARTMENT OF ELECTRONICS

Saradar Vallabhbhai National Institute of Technology

Surat-395007, Gujarat, INDIA
 Saradar Vallabhbhai National Institute of Technology
Surat-395007, Gujarat, INDIA
Department

CERTIFICATE

This is to certify that project titled “NOKIA” is presented and

submitted by group candidates:- Hari Kumar Gupta(U23EC166) ,
Manish Kumar (U23EC178),Deepak Sharma(U23EC179) , Surendra
Gamit(U23EC195) , B.tech 3rd Semester in the partial fulfillment of the
requirement for the award of B.tech degree in Electronics &
Communication Engineering for the academic year 2024-25.

They have successfully and satisfactorily completed their assignment in all

respect.We, certify that the work is comprehensive, complete and fit for
evolution.

07/10/24 MS Patel Roshniben Dineshchandra

Date ACADEMY FACULTY
 GROUP REPORT

1. HARI KUMAR GUPTA –

U23EC166 Work – Certificate,
Cover page

2. MANISH KUMAR –
U23EC178 Work - Case Study
Resources

3. DEEPAK SHARMA- U23EC179

Work - Proof-Reading and
Corrections

4. SURENDRA GAMIT – U23EC195

Work - Acknowledgement ,Reference and Conclusion
ACKNOWLEDGEMENT

I would like to express my deepest gratitude to all those who supported me throughout the
process of preparing this project on Telecommunications Company Nokia. We, the group
members, would like to extend our sincere gratitude to everyone who contributed to the
successful completion of this report.

First and foremost, we are deeply thankful to our college and the esteemed faculty for
providing us with this opportunity and for offering constant support and guidance. In
particular, we would like to thank our teacher, Roshni Mam, for their invaluable insights,
constructive feedback, and continuous encouragement throughout the duration of this
project. Their knowledge and expertise were essential in helping me complete this work
successfully.

I also extend my sincere thanks to my peers and friends for their collaboration,
suggestions, and encouragement, which helped refine the direction of this project. I am
forever grateful to my family for their constant support and motivation throughout this
journey.

I appreciate the opportunity to work on this project and the support extendedby our
department to ensure its successful completion.

Special thanks to Nokia as a company, for serving as a rich source of information,

allowing me to analyse and explore their impact on the industry. Nokia as a company for
being a rich subject of study, whose history, innovations, and strategies have inspired our
research and analysis.

Thank you!
  Table of content/Index with page numbers

Table of Contents

1. About the concept and its utilizations...........................................................................................1

2. Introduction of the Company/Brand under Study.........................................................................4

3. Case study.......................................................................................................................................6

4. Detailed explanation of understanding of Case Study....................................................................9

5. Findings from case study.................................................................................................................21

6. Recommendations.............................................................................................................................22

7. Conclusion.........................................................................................................................................24

8. References..........................................................................................................................................25
1.About the concept and its utilizations:-

This report explores key business concepts that are utilize by the Nokia’s from it’s journey of
market dominance to decline, and its subsequent efforts to recover. The rise and fall of Nokia
in the mobile phone industry provide valuable insights into several important business and
strategic concepts:

 1.1Technological Innovation and Disruption

Technological innovation is the heart of every successful company in the tech

industry. Nokia’s early rise was due to its innovations in mobile phone technology,
which made it a global organization However, the company’s decline can be
attributed to disruptive technologies like Apple's iPhone, Google and some Asian
company which radically transformed the market with smartphones that had
touchscreens and intuitive operating system This highlights the critical importance of
staying ahead in innovation and understanding how disruptive technologies can
redefine entire industries.

 Utilization: This concept applies broadly to industries where technology

evolves rapidly, such as telecommunications, software, and hardware.
Companies need to invest in Research and Development and be prepared to
embrace disruptive innovations that may reshape their markets.
 1.2Market Leadership and Adaptation

Nokia once commanded a significant share of the global mobile phone market, largely
due to its strong brand, diverse product offerings, and wide distribution network.
However, the company struggled to adapt to the fast-paced changes in consumer
preferences and technological advancements, particularly the shift from feature
phones to smartphones. Adaptation is essential for maintaining market leadership in
dynamic industries.

 Utilization: Businesses in all industries must be ready to pivot when market

conditions change. Market leaders can quickly lose their position if they fail to
respond to new trends or competitors. Strategic foresight and flexibility are
key to sustaining market dominance.
 1.3Corporate Strategy and Strategic Failures

1
 Nokia's strategic missteps were a major factor in its downfall. The company
continued to rely on its Symbian operating system while the market was moving
towards Android and iOS. Nokia’s leadership struggled with internal conflicts and
made delayed decisions that further complicated its ability to compete. Strategic
failures in recognizing the importance of the smartphone revolution led to its market
decline.
 Utilization: Companies must continuously change their strategic
direction and ensure alignment with market trends. Strategic decision-
making, especially during disruptive phases, should be quick and well-
informed to avoid long-term negative consequences, and also whenever
company is in bad phase then we have to ignore the risk.

 1.4Turnaround Strategies
Following its decline, Nokia attempted to stage a comeback through a strategic
partnership with Microsoft and the launch of its Lumia smartphones. Though it was a
challenging period, Nokia’s ability to pursue a turnaround strategy shows the importance
of resilience and adaptability in corporate recovery.

 Utilization: Businesses that face downturns can still recover through

effective turnaround strategies. By entering partnerships, restructuring, or
launching new products, companies can reposition themselves in the market
and regain their competitive edge.
 1.5 Leadership Decisions: Hiring Stephen Elop
One of Nokia’s most controversial moves was hiring Stephen Elop as CEO in 2010.
Elop, a former Microsoft executive, is widely criticized for the decisions he made
during his tenure. His "Burning Platform" memo, which highlighted Nokia's critical
situation, caused a significant loss of confidence within the company. Furthermore,
his push to partner with Microsoft and adopt the Windows Phone operating system,
while bypassing the more popular Android platform, is often seen as a key factor in
Nokia’s continued decline.

2
 Utilization: Leadership plays a crucial role in steering a company through
turbulent times. Nokia’s experience highlights the importance of selecting the
right leadership for critical strategic decisions. Leaders with the wrong vision or
strategy can significantly impact a company’s ability to survive in a competitive
market.

3
2.Introduction of the Company/Brand under Study:-

Nokia Corporation is one of the world's largest telecommunications equipment

manufacturers. With headquarters in Keilaranta of Espoo, Finland, this
Finnish
telecommunications company is best known today for its leading range of mobile phones.
Nokia also produces mobile phone infrastructure and other telecommunications
equipment for applications such as traditional voice telephony, ISDN, broadband access,
professional mobile radio, voice over IP, wireless LAN and a line of satellite receivers.

Nokia, a Finnish multinational company, was founded in 1865 by Fredrik Idestam,

initially starting as a pulp mill. Over the years, the company diversified into multiple
industries, including rubber, cables, and electronics. This diversification laid the
groundwork for Nokia's eventual entry into the telecommunications sector. By the 1980s,
Nokia had firmly established itself in the telecommunications market, pioneering early
mobile networks and handsets. In 1992, Nokia produced the first GSM (Global System
for Mobile Communications) phone, a milestone that revolutionized global mobile
communications and cemented Nokia's place in the industry.

4
During the late 1990s and early 2000s, Nokia reached its peak, becoming the world's
largest mobile phone manufacturer. Its phones, known for reliability, durability, and user-
friendliness, became household names. Models like the Nokia 3310 and Nokia 1100 are
iconic examples of this success. At its height, Nokia commanded over 40% of the
global mobile phone market, and its brand became synonymous with quality mobile
devices.

Nokia’s success was largely driven by its continuous innovation in mobile technology.
The company was instrumental in developing GSM standards, which transformed mobile
communication and made it widely accessible. Nokia also led the way in the early
development of mobile internet services, multimedia phones, and affordable devices, all
of which contributed to its global dominance.

However, by the mid-2000s, Nokia began to face significant challenges with the rise of
smartphones. The introduction of Apple's iPhone in 2007, followed by Android-based
devices, shifted the mobile phone industry towards touchscreen smartphones with
advanced operating systems and app ecosystems. Nokia's decision to continue relying on
its Symbian operating system—while the competition moved forward with more intuitive
platforms like iOS and Android—contributed to its decline in market share.

5
Despite these challenges, Nokia attempted to recover through a strategic partnership with
Microsoft in 2011. Under the leadership of Stephen Elop, the company adopted the
Windows Phone operating system for its Lumia series of smartphones. Though these
devices were known for their solid hardware, the Windows Phone OS failed to compete
with iOS and Android, which had already established dominant market positions.

In 2014, facing continuous struggles in the smartphone market, Nokia sold its devices and
services division to Microsoft for €5.44 billion ($7.2 billion). This move marked the end
of Nokia's mobile phone dominance, and Microsoft's subsequent exit from the
smartphone business only a few years later closed the chapter on Nokia's era in mobile
phones.

After selling its mobile phone business, Nokia shifted its focus to telecommunications
infrastructure, becoming a key player in network technologies and services. Today, the
company is heavily invested in 5G network development, competing with industry giants
like Ericsson and Huawei to provide critical infrastructure for telecom operators

6
 3.Case Study

 Introduction

Nokia's global success story is rooted in its strategic foresight and innovation during
the 1990s and early 2000s. The company transformed from a Finnish conglomerate
into the world's largest mobile phone manufacturer, becoming synonymous with
mobile phone technology. However, its inability to adapt to changing market
conditions ultimately led to its decline.

 Foundation Years

Nokia Corporation was established in 1865 as a paper mill by Fredrik Idestam at the
Tammerkoski Rapids in southwestern Finland. The company evolved over the
decades, with Finnish Rubber Works acquiring it in 1918 and Finnish Cable Works
joining the conglomerate in 1922. In 1967, Nokia Corporation was officially born,
focusing primarily on four markets: paper, electronics, rubber, and cable.

 Entry into Telecommunications

In 1979, Nokia entered a joint venture with leading Scandinavian color TV

manufacturer Salora to create Mobira Oy, a radio telephone company. This marked
Nokia's initial foray into the telecommunications industry. A few years later, the
company launched the world's first international cellular system, solidifying its
position in the emerging mobile market.

 Growth in the Mobile Phone Market

In 1984, Nokia acquired Salora, renaming its telecommunications unit to Nokia-

Mobira Oy. The company introduced its first compact phone, the Mobira Cityman
900, in 1987, which became the world's first handheld mobile telephone. By 1998,
Nokia had overtaken Motorola to become the number one phone manufacturer
globally, becoming a household name and pioneering innovation in mobile
technology.

7
 The Golden Era of Nokia

The last decade of the 20th century and the early years of the 21st century were a
boom period for Nokia. The company launched renowned products such as the Nokia
1000, Nokia 1100, and the N-series and E-series smartphones. Nokia's phones offered
higher resale value compared to competitors and were known for their user-
friendliness and variety of accessories, catering to all price ranges.

 Strategic Missteps and Internal Challenges

Despite its early successes, Nokia overestimated the power of its brand and failed to
adequately respond to new competitors like Samsung and Apple. The launch of the
iPhone in 2007 introduced a new standard for smartphones that Nokia did not initially
recognize as a threat. Nokia continued to produce phones based on its outdated
Symbian operating system, neglecting to embrace emerging platforms such as
Android.

In 2003, Nokia released its first smartphone, the Nokia 6600, based on the Symbian
OS v7.0 kernel software. However, as competitors began to gain ground, Nokia's
management remained complacent. The introduction of the matrix organization at
the end of 2004 led to unclear and slow decision-making processes, resulting in
growing bureaucracy that hampered innovation.

In 2006, Jorma Ollila was replaced by Olli-Pekka Kallasvuo as CEO. The new
management merged Nokia's smartphone and basic phone operations, prioritizing
traditional phones over experimenting with new technology. In 2010, Kallasvuo
was dismissed, and Stephen Elop, formerly of Microsoft, took his place.

 Partnership with Microsoft

In 2011, to address declining market share, Nokia partnered with Microsoft to adopt
Windows Phone as its primary platform, abandoning its legacy operating systems.
This partnership led to the release of Windows Phone 7-based devices like the Lumia
800 and Lumia 710. However, the Windows Phone platform struggled to compete

8
with the well-established iOS and Android ecosystems, primarily due to a limited
number of applications on the Windows Store.

By 2012, Nokia reported significant losses, leading to operating losses of €115

million in the second quarter of 2013. Facing impending bankruptcy, Nokia was
acquired by Microsoft in 2014 for approximately $7.2 billion.

 Attempted Comeback

In February 2014, Nokia launched the Nokia X, which ran on a modified version of
Android Jelly Bean, attempting to compete with other Android-based phones.
However, the Nokia X was heavily criticized and soon discontinued. Despite
Microsoft's acquisition and attempts to revitalize the brand, Nokia's decline continued,
leading to the demise of its mobile division.

 Conclusion

Nokia's story is a testament to the dynamic nature of the technology industry,

illustrating how strategic foresight, innovation, and adaptability can lead to success.
However, it also highlights the importance of continuous evolution and
responsiveness to emerging market trends. As Nokia transformed from a diversified
company into a telecom giant, its internal challenges and inability to adapt to
changing market conditions ultimately contributed to its decline. The case of Nokia
serves as a cautionary tale for future technology leaders, emphasizing the necessity

of embracing innovation and responding to competitive pressures in a rapidly

evolving industry.

9
4.Detailed explanation of understanding of Case Study

4.1Nokia: A Strategic Transformation and Decline

Nokia, a Finnish multinational communications and IT corporation, was founded in 1865 by

Fredrik Idestam under the name Nokia Katabolic. Over its long history, Nokia has evolved
through various industries—starting with rubber, paper, and cables before transitioning to
mobile handsets and telecommunications infrastructure. The most significant change came
during 1990-1996 when Nokia underwent a crucial transformation that saved it from near
bankruptcy and positioned it as one of the most successful corporations in the 1990s and
early 2000s.

The success of Nokia during this period, according to Palmberg, was attributed to a
combination of factors: economic, cognitive, organizational, and institutional. Steinbock, on
the other hand, believed Nokia’s dominance was not structural but behavioral, built on
cultural values, diversity, corporate accountability, and the strength of its senior management.
The company’s robust R&D efforts were critical to the development of new products and
businesses, which contributed to its rapid growth and leadership in the mobile phone
industry. However, this golden era did not last beyond 2007.

Nokia’s financial performance began to decline after 2007. Experts like Huy and Vuori from
Aalto University identified three main reasons for Nokia's downfall: its technological
capabilities lagged behind Apple, the company had become complacent, and its leadership
failed to foresee the disruptive potential of the iPhone. Additionally, Jia and Yin noted that
Nokia’s executives did not accurately grasp market trends, the company deviated from its
core business strategy, and there was a lack of teamwork within the organization. These
gaps
in Nokia’s strategy ultimately led to its downfall, a topic that will be further explored through
the examination of its leadership and strategic shifts.

4.2 Leadership and Strategic Changes

From 1977 to 1988, Kari Kairamo served as Nokia's CEO, overseeing a significant
transformation. Under Kairamo's leadership, Nokia evolved from a conglomerate into a
large multi-industry company focused on telecommunications. Notably, Nokia entered into a
joint venture with Salora to establish Mobira Oy, which led to the development of mobile
1
0
phones

1
1
and radio telephones. By acquiring ten large electronics and telecommunications companies,
Nokia solidified its position as the largest electronics company in Scandinavia. Kairamo's
era marked a period of aggressive growth and transformation, with the launch of Nokia’s
first
true mobile phone, the Mobira Senator, in 1982, followed by the introduction of the Mobira
Talkman in 1984 and the Nokia Mobira Cityman in 1987.

However, Kairamo’s sudden death in 1988 halted this momentum. His successor, Simo
Vuorilehto, who served as CEO from 1988 to 1992, shifted Nokia's strategy by divesting
its non-strategic businesses, transitioning the company from an aggressive buyer to a seller
of
industrial units. This change led to internal conflicts with major shareholders and resulted in
Nokia’s inability to navigate global market changes between 1988 and 1991.

In 1992, Jorma Ollila took over as CEO, marking the beginning of the modern Nokia era.
Ollila guided the company through the digital GSM expansion and refocused its strategy on
mobile technology and wireless communication. Under his leadership, Nokia underwent a
cultural transformation, embracing value-based leadership and management, fostering trust,
loyalty, and employee freedom. Ollila steered Nokia towards a product development strategy
that leveraged intangible assets, skilled personnel, and a strong patent portfolio. Nokia’s
operational model, built around coherent processes and a customer-focused approach,
enabled the company to dominate the global mobile phone market by 1998, becoming the
world’s largest mobile phone manufacturer.

However, by 2006, Olli-Pekka Kallasvuo, who had been Nokia’s CFO, succeeded Ollila as
CEO. Kallasvuo introduced a new strategic direction, shifting the company’s ownership from
traditional Finnish investors to international and American mutual funds, focusing on high-
profit margins and short-term gains. Despite his expertise in managing financial markets and
optimizing production, Kallasvuo struggled to adapt to the rapid changes in the smartphone
industry. As a result, Nokia’s market share fell from 38% in 2009 to 28% by the end of 2010,
and the company’s performance continued to decline.

In 2010, Stephen Elop became the first CEO of Nokia from outside the company. Elop’s
appointment was intended to guide Nokia through its declining market position, particularly
in the smartphone sector. One of Elop’s key strategic moves was to restructure the company
by splitting its devices and services business into two units: smart devices and mobile phones.
While Elop’s organizational reforms had some success, his infamous "Burning Platform"
10
memo, which criticized Nokia’s reliance on its Symbian and MeeGo platforms, caused

10
internal turmoil. Elop pushed for a strategic partnership with Microsoft, shifting Nokia’s
focus to Windows Mobile OS, a move that was met with skepticism by Finnish investors.

Despite Elop’s efforts, Nokia’s market position continued to erode. By the end of his tenure,
Nokia’s stock price had plummeted, its smartphone market share had dropped to a mere 3%,
and the company had suffered cumulative financial losses. These developments culminated
in Microsoft’s acquisition of Nokia’s devices and services business in 2013, marking the end
of Nokia’s once-dominant position in the mobile phone industry.

4.3 Research and Development:

Nokia's Research and Development (R&D) strategy predominantly emphasized product

development, with only a minor focus on fundamental research. Throughout the 1990s,
Nokia's R&D efforts were geared toward the basic development of mobile phones and mobile
data communications. However, the company's innovation approach was characterized more
by incremental improvements rather than radical innovations.

A significant portion of Nokia’s R&D was conducted in-house at the Nokia Research Centre,
along with operations in 44 international research centers across 12 countries. By the end of
2006, 31% of Nokia’s workforce was engaged in R&D activities, primarily focused on
product development. The integration of R&D with the company's operating divisions was a
strategic decision, allowing engineers to collaborate closely with teams in marketing,
manufacturing, and other relevant fields.

Nokia also fostered partnerships with educational institutions in Finland, exemplifying its
commitment to open innovation. Key collaborations included partnerships with Tampere
University of Technology, Aalto University, and Oulu University, alongside partnerships with
leading American institutions such as MIT and Stanford, as well as Chinese universities like
BUPT and Tsinghua. This interconnectedness aimed to enhance research capabilities and
ensure alignment with technological advancements.

The financial commitment to R&D was substantial, with Nokia investing approximately 10%
of its sales into R&D activities. According to estimates by Bernstein Research, in 2010,
Nokia spent around $3.9 billion on mobile phone development, nearly three times the
average expenditure of its competitors, with a significant portion of this budget allocated to
the

11
Symbian platform.

12
Despite the considerable investments in R&D, Nokia's output in terms of innovation was
impressive. The company developed a diverse range of products, from network components
and handset features to software solutions and digital cameras. The number of patents filed
by Nokia reflects this innovative spirit, peaking at 6,510 patents in 2008. However, there was
a noticeable decline, with only 4,045 patents filed by 2012. This decline coincided with a
shift in strategy; prior to 2008, Nokia engaged more extensively in joint R&D efforts,
outsourcing, and participation in standardization consortia, while still managing to cultivate a
robust brand identity and corporate reputation.

The interplay between Nokia’s R&D activities and its overall strategy underscores the
challenges the company faced as the mobile landscape evolved. While the extensive
investment in R&D yielded significant innovations, the lack of focus on radical innovations
ultimately contributed to Nokia's decline as it struggled to keep pace with emerging
competitors like Apple.

R&D spending Nokia in Euros

4.4 Innovation at Nokia

Nokia, as a technology-intensive company, invested heavily in research and development

(R&D), which facilitated the launch of numerous mobile devices annually. This strategy
aimed to respond to the rapidly changing consumer preferences and the demand for advanced
features and settings. While many attribute Nokia’s decline to a lack of innovation, the
company actually possessed a robust portfolio of innovations and patents. Notably, Nokia
developed a prototype smartphone with a large touchscreen in 2004, three years before the
launch of the Apple iPhone, and a prototype of a 3D user interface back in 2002, seven years
ahead of its competitors.

13
For a significant period, Nokia's leadership maintained a clear vision of advancing
technology and ensuring a competitive edge through high-tech products. During the 1990s,
the company's engineers demonstrated remarkable skill in technological innovations,
continually improving existing product categories. The concept of open innovation was
effectively adopted at Nokia, with both leadership and engineers actively engaging in local
and international innovation networks.

From 1997 to 2002, a pivotal period marked by the development of the third generation (3G)
of mobile telecommunications, Nokia successfully established 48 strategic alliance

14
including 25 joint development agreements, 16 co-production contracts, six joint ventures,
and one standardization consortium. This proactive approach to collaboration emphasized
Nokia's commitment to innovation.

Nokia employed an ambidextrous strategy that balanced the exploitation of existing

technologies for cost-effective production at high volumes with the exploration of new
opportunities through a Venturing Fund established in 2000. This approach allowed Nokia to
remain competitive while seeking new avenues for growth.

Furthermore, Nokia's aggressive acquisition strategy saw the company acquire over 50
businesses between 1997 and 2013, focusing on new technologies and competencies. These
acquisitions included advanced technologies from companies like Sega.com, Intellisync
Corporation, and Twango, as well as access to content through partnerships with Loudeye
Corporation for music and Navteq for mapping services.

However, despite these efforts, many of Nokia's acquisition and venturing strategies did not
yield the expected results. Numerous ideas, projects, and plans, with few exceptions, failed to
materialize into successful products or services. This gap between innovation and execution
became a critical factor in Nokia's eventual decline in the competitive smartphone market.

4.5 Product Segmentation at Nokia

 Understanding Customer Segmentation

One of the primary reasons for Nokia's dominance in the mobile phone market was its ability
to clearly identify and cater to different customer segments. This customer segmentation
strategy involved recognizing distinct user needs, preferences, and desires, allowing Nokia to
develop tailored value propositions. This approach began with early models like the
Talkman and Cityman and evolved as Nokia expanded its product lines in response to
market changes and consumer demand.

 Development of Value Propositions

Nokia's value propositions were designed to meet the unique requirements of each customer
segment, focusing on aspects such as portability, design, style, and service. By
understanding

15
the diverse needs of its user base, Nokia was able to create products that appealed to a wide
range of customers. This strategy emphasized not just the technology behind the phones, but
also how they fit into the lifestyles of users.

 Segmentation Strategy

Between 1996 and 2008, Nokia launched various mobile devices, including its first digital
multimedia device, the Nokia Mediamaster. In 2007 and 2008, Nokia introduced a more
refined segmentation structure that categorized users into 12 different groups based on two
key dimensions:

1. Higher Involvement vs. Lower Involvement: This dimension considered how

much effort and thought customers put into their purchasing decisions. Higher-
involvement users might be looking for advanced features, while lower-involvement
users may prioritize simplicity and affordability.

2. Rational vs. Aspirational: This dimension distinguished between customers

who make purchasing decisions based on logical assessments (such as price and
functionality) and those driven by aspirations and lifestyle choices (seeking status or
brand image).

 Extensive Product Range

Nokia was known for its extensive range of mobile phones. Between 1994 and 2013, the
company released 406 different models, with a peak of 47 new models launched in
2008.
This impressive variety showcased Nokia's commitment to innovation and responsiveness to
consumer preferences. The product range included feature phones, smartphones, and
multimedia devices, each designed to meet the needs of different user categories.

 Challenges of Over-Segmentation

Despite its innovative approach to product segmentation, Nokia faced challenges due to its
strategy of launching numerous products each year. This overabundance of product-
market combinations created several issues:

1. Lack of Focus: The extensive range of models led to a dilution of focus, making it
difficult for Nokia to identify and prioritize key products that could effectively
compete with rival brands like Apple and Samsung. Instead of developing standout
products, the company spread its resources thin across many models.
16
 2. Market Confusion: With so many options available, consumers could become
overwhelmed and confused about which product best suited their needs. This
confusion could potentially lead to indecision and decreased sales.

3. Difficulty in Innovation: The sheer volume of products may have hindered Nokia's
ability to innovate effectively. Instead of concentrating on a few flagship devices, the
company might have missed opportunities to create groundbreaking products that
could redefine the market.

4.6 Nokia’s Recognition of Smartphones

The question often arises: what defines a smartphone? A smartphone is essentially a mobile
phone that provides more advanced computing capabilities and connectivity than a basic
feature phone. It integrates mobile phone functionalities with common features found in
handheld computers or PDAs, allowing users to store information, email, install programs,
and use a mobile phone in one device.

This section reviews Nokia’s recognition of smartphones across different stages: the early
stage (dominance from 2003 to 2006) and the later stage (deterioration from 2007 to 2013). It
also discusses the operating systems adopted by Nokia during this time.

Global market shares held by smartphones Nokia 2007-2017, Apple 2009-2017, Samsung 2009-2017 Source:
Statista.com/statistics

17
4.7 Nokia’s Operating Systems (2003-2013)

Nokia originally powered its phones with its operating system until 1998 when it began the
Symbian initiative, which provided a platform alternative to its branded OS. During this
period, Nokia exploited two main options: continuing to develop the Symbian OS and
working on MeeGo before switching to Windows Phone OS in 2011.

1. The Symbian OS

Nokia entered the smartphone market in 2003 with the Nokia 6600, but the N95 in 2007 is
often recognized as its first true smartphone powered by Symbian OS and Java Micro
Edition. While Nokia dominated the market until 2007, the Symbian operating system was
pivotal to this success. Although it offered advanced features like a better camera, Bluetooth,
3G connectivity, and GPS, it lacked the appealing user interface found in competitors like
Apple's iOS and Google's Android.

18
Despite its strengths, Symbian struggled to create a robust ecosystem and failed to provide
enough applications for users. This inability, combined with technical problems and a
fragmented architecture, ultimately contributed to its decline. Nokia announced its
partnership with Microsoft in early 2011, marking the end of the Symbian era.

2. The MeeGo OS

The MeeGo development team was formed in 2005 to explore alternatives to the Symbian
OS. This Linux-based, open-source software platform was announced in 2010, resulting from
a merger between Nokia’s Maemo team and Intel’s Moblin. Although the Nokia N9 was
successfully launched as the first smartphone powered by MeeGo, the ecosystem around
MeeGo failed to gain traction beyond Nokia and Intel, leading to its abandonment following
the strategic partnership with Microsoft.

3. Windows Phone OS

In February 2011, Nokia announced a partnership with Microsoft, adopting Windows Phone
as its primary smartphone platform. Despite questions surrounding this decision, Nokia
justified the choice as a way to avoid competition within the Android space. However, the
market performance of Nokia’s Lumia line was disappointing, leading to substantial losses
for the company. The Windows Phone OS struggled to gain significant market share and
never exceeded 3.6% by Q3 2013, ultimately contributing to Nokia's decline.

In conclusion, Nokia's challenges stemmed from its inability to adapt to the rapidly changing
smartphone market and the misalignment of its strategic partnerships and product offerings.
The lessons learned from Nokia's history serve as a reminder of the importance of innovation,
adaptability, and a keen understanding of market dynamics in the technology sector.

4.8 The New Nokia (2014-Present)

On April 25, 2014, Nokia officially completed the closure of its Devices and Services
business, following the sale of the majority of this segment to Microsoft. This pivotal deal,
which also included an agreement for Microsoft to license Nokia's patents, was initially
announced on September 3, 2013. This sale marked a significant turning point in Nokia's
corporate journey and was seen as a necessity to refocus its efforts on core competencies.

19
The year 2014 was deemed crucial by Nokia, representing a new chapter in its history.
Emerging from the transaction, the company restructured its operations and established three
core business segments: Nokia Networks, HERE, and Nokia Technologies. Each of these
divisions was strategically positioned to excel in its respective field, reflecting Nokia's
commitment to innovation and leadership in technology.

4.9 HMD Global Buys Nokia’s Mobile phone Division

HMD Global is a Finnish mobile phone company made by previous executives of Nokia. It
bought back the mobile phone division from Microsoft in 2016. It learned from past mistakes
and partnered with Google’s Android One program.

In 2017, HMD global released the iconic Nokia 3310, which was well-received by the
general public. On March 19th, 2020, it announced the release of Nokia 8.3 5G, the world’s
first 5G smartphone.

From virtually zero sales in 2015-16 to 1.5 million mobilephones sold in 2017, HMD global
revived Nokia. In Q3 of 2018, it shipped more than 4.8 million units, making it the 9th largest
smartphone vendor worldwide.

everything went down.

4.10 A Timeline of Nokia’s Failure

After dominating the mobile industry for more than a decade, Nokia’s sales went down. It
was a result of both internal decisions and the external environment.

 Change in The Top Management: In 2006, Jorma Ollila was replaced by Olli-
Pekka Kallasvuo as CEO. The new management merged Nokia smartphones and
basic phone operations, they focused more on traditional phones rather than
experimenting with new technology.

 The Arrival of New Companies: In 2007, Apple stepped into the smartphone game
and launched the iconic iPhone. Nokia refused to take Apple as a threat to their high
sales numbers. It also considered Apple phones inferior as they run on 2G
technology while Nokia’s mobiles ran on 3G technology.
In 2008, Google launched the Android Operating System (OS). By this time, Apple’s
iOS was becoming popular and its sales were steadily increasing. To tackle the threat,

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 Nokia should have switched to Android, but it didn’t and continued to make phones
with outdated Symbian OS.

 Delay in The Release of New Phones: In 2010, Nokia announced N97, which
would be the first to run Symbian^3. But the release was delayed and as a
consequence, it failed to compete with Apple and rising Google.
In 2010, Olli-Pekka Kallasvuo was fired from the position of CEO, and Stephen Elop,
from Microsoft, took his place.

 Partnership with Microsoft: In 2011, to cope up with declining market share Nokia
partnered with Microsoft to make Windows phone, abandoning old OSs like
Symbian and MeeGo.
In 2012, the Windows phone failed to make an impact on an already established
smartphone market. The main reason behind this was a few numbers of applications
on the windows store as compared to Google’s Playstore and Apple’s store.

 Acquisition By Microsoft: In 2014, Nokia was close to being bankrupt. But

Microsoft stepped in and brought Nokia for $ 7.2 billion. This was considered
by many, the last nail in the coffin.

4.11 Reasons for Nokia’s Failure

There are numerous reasons that led to Nokia’s failure. Here are some of the major
reasons among them.

Failed to Adapt

Despite knowing that there was more demand for software than hardware, Nokia stuck to
their old ways and didn’t adapt to the changing environment. When Nokia eventually did
realize their mistake, it was a little too late, because people moved on to Android and
Apple’s phone.

Failed to Innovate

Nokia was the first company to introduce 3G phones, camera phones, and many more
innovative technologies. In the early 2000s, it knew that innovation is the key to stay
relevant and push the boundaries of technology. But as demand for their phones
grew, their focus shifted to manufacturing, to fulfill those demands. It focused less on

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innovation and more on mass production and as a result, companies like Samsung, Apple,
HTC, etc., started to gain some market with their innovative & simple OSs.

Failed to Reposition Itself

Nokia should have analyzed the market trends and repositioned itself accordingly. It failed
to do so. It did not focus on the smartphone market and missed the opportunity. Nokia
could have improved their existing software: Symbian.

Overconfident

The top management of Nokia thought that nothing could ever go wrong until it did. New
companies arrived with new ideas and technologies and Nokia turned a blind eye to them.
They didn’t consider anyone their competition. In this overconfidence and ignorance,
Nokia failed.

Changed the Organizational Structure

Nokia shifted to the matrix structure. It was a sudden shift and was done to improve
agility. A lot of stakeholders were upset and people in top management left the company.
The people who helped Nokia to become the best company were no longer there. This is
one of the reasons for how internal working affected their company.

Had Internal Issues

“We were spending more time-fighting politics than doing design,” said Alastair
Curtis, Nokia’s chief designer from 2006 to 2009.

Many divisions of the company were not coordinating with each other properly. This
lack of coordination created more issues such as internal rivalries in the top management.
The impact of these problems was not direct but it played a role in the downfall of Nokia.

Failed to Compete in the Smartphone Market

While companies like Samsung, Apple, HTC were making software-driven phones, Nokia
was still fixated on the traditional phones. It did try to compete by releasing N97 with
new Symbian OS, but it was too late as Android phones and Apple phones were already
established.

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The Symbian OS vs MeeGo OS Confusion

The company’s R&D division was divided into two. One was working on improving
Symbian and the other on MeeGo. Both teams claimed that their software was better. This
competition resulted in delays in releasing new phones.

Frequently Changed the Management

Having stable top management helps the company to stay on one track. But this was not
the case of Nokia, in the span of 5 years, the CEO was replaced 2 times. This frequent
change didn’t give the employees to adjust to the new CEO’s goals and visions. This
caused dissatisfaction among the employees and other stakeholders.

Failed to Switch to Android

Nokia had the opportunity to join hands with Google and make android phones but
refused to do so. This was one of the biggest mistakes Nokia made. Android OS was
simple, faster, and had a great collection of applications on its store, which made it so
popular. If Nokia had switched to Android in time, their story would have been different.

Decision-Making Was Slow

The top management took too long to make decisions. Frank Nuovo, former vice-
president, and chief designer left the company in 2006. He said that the management was
slow to make decisions that required urgency. Many opportunities were lost due to this.
Way before the release of the iPhone, Nokia’s research department had already come up
with the idea. But because of the corporate culture that was prevailing, it never saw the
light of the day.

Partnered with Microsoft

In 2011, Nokia announced a partnership with Microsoft. They were going to make
windows smartphones, which didn’t work in the market due to a lack of applications in
the windows store. Nokia was on the brink of bankruptcy, but Microsoft bought the
mobile devices division of Nokia in 2014 for $7.2 billion.

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5. Findings from case study

1. Understand customers interest: Nokia failed to recognize the shift in customer

preference towards smartphones with touchscreen, app ecosystem. Consumers wanted
device That offers more than just calling and texting, they wanted mobile computers.
Appel’s iphone delivered all these demands and Nokia was unable to meet this new
expectations led to a loss in customers loyalty and market share.
2. Adaption is necessary: Nokia failed to move quickly towards rising smartphone
technology. When Apple introduced Iphone in 2007 and revolutionized the market,
Nokia was still focused on traditional mobile phones with symbiont Operating system.
By the time Nokia realized the importance of adopting a modern smartphone
technology, it was too late. And competitors had gained significant place in
smartphone market.
3. Smart decisions are very important in growth of company: Decision taken by top
level management are very crucial for company’s growth. Nokia’s decision to stick
with its symbian operating system despite its limitations, was biggest error. When
Google’s Android and Apple’s ios operating system gained popularity, Nokia
continued using Symbian OS. Later, when Nokia partner with Microsoft to use
Windows operating system, But it was too late, They had already lost most of
customer interest. Strategic decisions can significantly impact a company’s success.
4. Keep on innovating: Nokia was known for innovative mobile phones, like Nokia
3310. Which has reputation of great durability. However, Nokia's innovation slowed
down in the smartphone era. Apple and Samsung introduced new features and better
user experiences, leaving Nokia behind. This shows that continuous innovation is
crucial to stay ahead in the tech industry.
5. Strong Leadership is Key: Leadership changes and vision shifts at Nokia played a
significant role in its failure. Effective leadership with a clear, forward-thinking
vision is essential to navigate through both successes and challenges. Leaders need
to be adaptable in their decision-making to ensure the company’s long-term success.

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6. Recommendations

1. Keep Up with Technology: Companies need to stay ahead of new technology and
keep innovating. Nokia should have quickly moved to smartphone technology instead of
sticking with old systems.

2. focus on market demands: Being flexible is important. Nokia’s reluctance to change

with the fast-paced mobile phone market led to their decline. Businesses should be ready
to change their strategies to meet new market demands.

3. Focus on Customers: Understanding and meeting customer needs is crucial. Nokia lost

a lot of market share because they didn’t keep up with what customers wanted in
smartphones. Companies should invest in market research to stay in tune with consumer
trends.

4.Smart Decisions: Making good, timely decisions is critical. Nokia’s decision to keep
using Symbian OS, even though it had problems, hurt them. Companies should regularly
review their strategies and be open to making big changes when necessary.

5. Strong Leadership: Good leaders with a clear vision are essential. Changes in
leadership at Nokia affected their direction. Companies need leaders who can see industry
trends and guide the company accordingly.

6. Balance Focus and Diversification: While diversification helped Nokia survive,

focusing on their main strengths, like their shift to network infrastructure, was
beneficial. Businesses should balance branching out with maintaining a strong focus on
their key
areas.

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7.Keep Learning and Regularly looking back at past performances and
Improving:
learning from mistakes is important. Nokia’s ability to reinvent itself in the
telecommunications field shows the importance of ongoing improvement and resilience.

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7. Conclusion

Nokia's story offers a lot of lessons for businesses. At first, Nokia became a global leader by
making reliable and innovative mobile phones. However, when smartphones started taking
over, Nokia didn’t adapt quickly enough, which led to a major loss in their market share.
Their choice to stick with outdated software instead of moving to something new was a big
mistake.

Despite these challenges, Nokia managed itself by focusing on network infrastructure,

showing their resilience and ability to pivot in a new direction. This change helped them stay
relevant in the competitive tech industry.

The key takeaways from Nokia’s journey include the need to be adaptable to market changes,
continuously innovate, understand consumer needs, and make smart strategic decisions.
Effective leadership is crucial in guiding a company through both good times and
tough challenges.

Overall, Nokia’s experience teaches companies to stay flexible, forward-thinking, and closely
connected to their consumers to achieve long-term success.

Questions :

1) What made nokia grow rapidly in early stage?

2) Which mistakes lead nokia towards failures?
3) How shall you contribute to Nokia’s comeback in smartphone market?

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8. References

I. Parth verma(2023)The History of Nokia

https://www.feedough.com/the-history-of-nokia/
II. Team pepper(2022) How and Why Did Nokia Fail?
https://www.peppercontent.io/blog/how-and-why-did-nokia-fail/
III. Yves L. Doz, (2017) The Strategic Decision That Caused Nokia’s Failure
https://knowledge.insead.edu/strategy/strategic-decisions-caused-nokias-failure
IV. Agarwal R., & Helfat, (2009). Strategic renewal of organizations.
Organization Science, 20(2), 281–293.
https://doi.org/10.1287/orsc.1090.0423
V. Borden, M. (2009). Nokia rocks the world: The phone King’s plan to
redefine its business. Fast Company.
https://www.fastcompany.com/

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