Nokia: Life after the fall of a mobile phone giant #Beekhaybee

On the face of it the small Finnish town of
Nokia looks wholly unremarkable. A few
squat blocks of flats are nestled in the winter
snow, and along the heavily gritted main road
is a small strip of shops, restaurants and a
discount supermarket.
There’s little sign that this quiet backwater once
gave its name to the company that
revolutionised the mobile phone industry in the
late 1990s and helped turn Finland’s economy
into one of the most prosperous in the world.
At its peak in the early 2000s Nokia supplied
40% of the world’s mobile phones, creating
Finland’s first globally recognised consumer
brand.
At home its impact was even greater. According
to the Research Institute of the Finnish Economy
it contributed a quarter of Finland’s growth
between 1998 and 2007 – a period Finnish
finance minister Alexander Stubb calls an
“economic miracle”.
But as quickly as it emerged, Nokia’s dominance
of the mobile phone market came crashing
down, hitting Finland’s economy hard and
coinciding with the longest recession in the
country’s history.
“Nokia was huge in Finland by all indicators, and
when that was scaled down we were horrified
about the possible consequences,” says Kari
Kankaala, director of economic and urban
development for the city of Tampere.
‘Backbone of everything’
Tampere is about 15 minutes down the road
from the town of Nokia, and the site of the
company’s biggest research and development
site, at its peak employing 4,000 high-tech,
skilled workers.
The city’s old redbrick smokestacks tell the story
of its 19th Century industrial past, but the rise
and fall of Nokia’s mobile phone business has
dominated its more recent history.
“It was the backbone of everything here,” says
Mr Kankaala. “The universities relied on
collaboration with Nokia, the subcontractors
depended on Nokia, the kids relied on being
employed by Nokia.”
Listen to Edwin Lane’s report on Finland After
Nokia, on Business Daily, BBC World Service
“Now we have an horrendous unemployment
situation of the order of 14-15%.”
Other high-tech firms have since moved in to fill
the void. And Nokia’s separate networks
business, focusing on telecoms infrastructure,
remains a successful Finnish enterprise. But a
wider economic malaise in Finland means fewer
people are hiring now.
In Tampere former Nokia employees still ponder
how the company went from world leader in
mobile phones as recently as 2007 to the
struggling takeover target for Microsoft in 2014.
“I think one of the high points was when we’d
shrunk the mobile phones smaller than
Motorola,” says Mika Grundstrom, a former
senior manager at Nokia’s R&D site in Tampere.
“That was around 1997-1998. It was kind of an
engineering dream.”
The iPhone effect
For Mika the brief in the early days was simple –
make the phone with the best battery life in the
smallest case possible.
But then all that changed with the rise of the
smartphone, and in particular the launch of
Apple’s iPhone in 2007.
“Things became much more complex. We were
not so sure anymore what we should actually
target. Is it ease of use, is it battery life, is it
size?” he says.
“If you think about the battery life – we had
devices that could last for a week. Then you
have this new device, it’s excellent but you
need to charge it every day. Ok so how do you
actually sell that to the customer?”
Nokia played catch-up in the smartphone
market until 2014, when its mobile phone
business was sold to Microsoft and the Nokia
name was removed from its devices all
together.
But despite its effective demise, many Finns say
there is a positive legacy to appreciate.
“Giving Nokia shares to workers made it
accepted that your next door neighbour could
be a millionaire,” says Kari Kankaala. He says
Nokia’s biggest impact was to revolutionise
Finland’s business culture.
“That acceptance that someone can actually
make money, combined with the new approach
to entrepreneurship – that was a major change.”
Start-up legacy
Two hours to the south in Helsinki there are
already signs of that new business culture
taking hold in the post-Nokia world.
Tuomas Kytomaa is a software engineer who
spent most of his career working for Nokia,
including stints in the US and Germany.
Last year he returned to Finland to work for the
online retailer Zalando and set up a tech hub on
the site of an old cable factory in the Finnish
capital, now converted into trendy office space.
For him Nokia’s legacy is a wealth of talent and
expertise waiting to be tapped.
“The talent hasn’t really gone anywhere,” he
says. “The sheer magnitude of Nokia in Finland
means that there’s a pool of tech talent that
has deep specialised knowledge.”
“Finland’s buzzing with high-tech skills and
start-ups.”
Whatever the future of Finland’s tech industry,
few believe that a company of Nokia’s size and
influence will appear again.
“When Nokia was a dominant player in this
business, there were a lot of good things that
happened in Finland,” says Seppo Haataja,
another former manager at Nokia’s research
and development site.
“Now the situation is changing. the innovations
are not coming through the big companies – it’s
small companies, the start ups.”

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