In 2005, Nokia bought its billionth mobile phone, a budget-friendly system that went to a buyer in Nigeria. By then, the corporate, primarily based in Espoo, Finland, was making certainly one of each three cellphones globally.
However simply 9 years later, the mobile-device maker offloaded its total handset division to Microsoft for pennies on the greenback, in comparison with what it had been price at its peak.
Nokia had risen from obscurity within the Nineties to turn out to be a worldwide cultural phenomenon by the flip of the millennium, its signature units featured in TV exhibits and movies, saying their presence with immediately recognizable Nokia ringtones.
As Nokia was changing into snug within the highlight, the smartphone period arrived. And what got here subsequent was swift and brutal. However, as revealed in Nokia inside paperwork lately made public and interviews with key Nokia engineers from that period, the corporate noticed it coming. Inside 24 hours of Apple CEO Steve Jobs’s iPhone unveiling in 2007, Nokia was already weighing its choices. They’d instantly acknowledged the risk. Nevertheless, outrunning it was one other matter.
What follows is Nokia’s story over 14 years, from 1998 to 2012, because the world’s prime cellphone maker—how its units outlined their time, how the tech reshaped what telephones might be and do, and the way the corporate’s good fortunes within the handset enterprise got here to an finish.
Nokia Was As soon as Unbeatable
The centerpiece Nokia units, those that folks in all probability consider once they see the phrases “Nokia cellphone,” have been the 3210 and its cousin, the 3310. TechRadar has called the 3310 “the greatest phone of all time.”
Nokia’s 3210 cellphone, launched in 1999, was a cheap system geared toward youthful customers. Colin McPherson/Alamy
Launched in 1999 and 2000, respectively, the 2 units bought more than 280 million units worldwide. Their most modern {hardware} function was the internal antenna—the primary mass-market cellphone with out even a stub or retractable aerial. “Customers had the notion that it couldn’t work effectively with out an exterior antenna,” stated Peter Røpke, a former Nokia senior vp, in a 2016 interview with Slate.
The telephones shipped with video games, together with the legendary Snake, one of the vital common pre-smartphone cellular video games—by which a pixelated serpent eats and grows with each morsel consumed.
Nokia launched no small portion of the world to texting. On the time of the 3210 and 3310, the prevailing texting customary was SMS (brief message service), which allowed as much as 160 characters per message. Nokia appended its personal Nokia smart-messaging service to SMS, which allowed the sending of small bitmapped images across an in any other case text-only system. A rich-text messaging system that allowed visible photos, audio, and video adopted in 2002, resulting in a multimedia messaging service (MMS) customary that continues to be in place at the moment.
Nokia additionally enabled customers to simply create and share ringtones on their units. By 2000, Nokia’s custom-ringtone Composer app had popularized a brand new, short-form musical medium that the ringtone business, at its peak, would rework into a billion-dollar marketplace in the United States.
Nokia launched its 1100 cellphone in 2003 and in the end bought half a billion models, making it the preferred cellphone in historical past. Paul Chesne/Donaldson Assortment/Getty Photographs
A number of years later, Nokia reimagined its cellular handsets, releasing the 1100 in 2003. The 1100 bought a half a billion models, greater than any cellphone in history. It remains one of the best-selling consumer products ever. A lot of the 1100’s success was resulting from its price ticket—in the neighborhood of US $100, making it on the time Nokia’s most affordable device.
Additionally contributing to the 1100’s recognition have been options designed for longevity and difficult environments, together with mud resistance, nonslip sides for higher dealing with in wet circumstances, and a 400-hour standby battery life. The 1100 launched a flashlight as effectively, which the person turned on and off by holding down the “C” key.
The place most system makers on the time have been fearful about digital camera megapixels and shade screens, Nokia had leapfrogged its competitors with a back-to-basics cellphone that would survive the rain, endure unreliable power grids, and light-weight the way in which dwelling.
Apple Launched the iPhone, Nokia Scrambled
On 9 January 2007, on the Macworld convention in San Francisco, Steve Jobs made a characteristically bold claim. “Right this moment, Apple is reinventing the cellphone,” he stated, quickly pulling one of many first iPhones out of his pocket.
Apple CEO Steve Jobs famously launched the iPhone on the Macworld Convention in San Francisco on 9 January 2007. Nokia held a rapid-response assembly to the occasion the next day. Tony Avelar/AFP/Getty Photographs
Rumors of Apple getting into the cellphone market had swirled for the reason that iPod’s debut in 2001, however no one had actually reckoned with what that may imply.
“Govt abstract: Apple iPhone is a severe high-end contender,” learn a slide from a Nokia internal meeting held the day after Jobs’s keynote. (That slide is now in the company’s online archives, opened to the general public last year.)
“Consumer interface has been a giant power for Nokia,” it continued. “Nokia must develop contact [user interface] to battle again.”
Peter Bryer, on the time Nokia’s supervisor of strategic foresight, was a part of that 10 January assembly, and he remembers that Jobs’s announcement wasn’t surprising. However the iPhone’s in depth reliance on multitouch—save for a single dwelling button on the entrance—did shock the staff.
Nokia was already conscious of multitouch know-how, Bryer notes. In 2006, the U.S. laptop scientist Jeff Han had given a celebrated TED talk about it, demonstrating a multitouch display screen, which might sense a number of fingers on the display screen at a time, not only one. Bryer remembers his colleague Timo Partanen, then Nokia’s director of market and competitor evaluation, getting enthusiastic about Han’s demo.
In 2006, the NYU analysis scientist Jeff Han confirmed off a brand new multitouch interface know-how as a part of a well-liked TED talk. By the tip of the last decade, multitouch—by which a number of fingers can work together with a touchscreen directly—would play a key function in smartphones from Apple, HTC, and Palm. Steve Jurvetson/Flickr
“Timo burst into the room, saying, ‘You’ve obtained to see this TED video of this guy using multitouch,’” Bryer remembers. “We each thought that was cool and that’s the longer term. Then I regarded on the sponsors of the presenter’s analysis, and amongst them have been Nokia and Microsoft.”
And but it took Nokia years to develop a cellphone that used multitouch. “Bear in mind, Nokia is predicated in Finland,” he says. “It’s very chilly in Finland. They put on gloves for six months of the 12 months, together with the executives. They didn’t assume a tool like that will work.”
Winter gloves have been no impediment to working the chunky buttons on Nokia telephones, a design precedence maybe stemming from the corporate’s Finnish tradition and headquarters. Erol Gurian/laif/Redux
Partanen was additionally at Nokia’s post-iPhone launch assembly, and remembers that there was little concern within the room. “We felt okay,” he says. “That is yet one more competitor launching a fantastic product. However we had little question that, if it’s profitable, we’d do the identical. We’ll launch comparable merchandise.”
In November 2008, Nokia launched its first touchscreen cellphone, the 5800 Xpress Music, a 12 months and a half after Apple had launched its iPhone. Shaun Curry/AFP/Getty Photographs
That comparable product ended up being the Nokia 5800 XpressMusic, generally known as the Tube, launched in 2008. “The concept was to give attention to streaming movies and tv,” Partanen says. “So we made a cellphone with an analogous kind issue to the iPhone [that was] optimized for streaming content material.” However the 5800 was “delayed, delayed, delayed, delayed,” he says. “It didn’t materialize in the way in which it was deliberate. It was launched as a watered-down model.”
Critics skewered the 5800’s “outdated” function set and “historical” S60 operating system, which ran on prime of Symbian OS, an open-source cellular platform Nokia had recently acquired. The 5800 sold reasonably well for its time, reaching round 8 million models in its first 12 months alone. Nevertheless it didn’t function multitouch.
“I feel that began to be the purpose when all people realized that, hey, that is by far tougher than earlier aggressive points we’ve had,” Partanen says.
Nokia lastly launched its first device with multitouch in 2010, three years after Jobs’s splashy iPhone announcement and 4 years after Han’s TED speak demo.
How Android Ate Up the Low-Finish Market
Nokia had lengthy owned the low finish of the cellphone market, with its sturdy, no-frills units suited to that phase. So the years instantly following the iPhone’s launch noticed the Finnish agency proceed to thrive because it saved turning out easy, rugged units.
As one review of the Nokia 1200—successor to the 1100—put it in October 2007, “This handset chucks away all the flowery options you’ve come to count on on a contemporary cellular, leaving you with a pared-down function set that’s simple for tech novices to get their heads round.”
Two cellphone customers in Nairobi, Kenya in 2013 change a cost on a Nokia 1200 cellphone through the M-Pesa Mobile Money Market, a well-liked online banking service. Trevor Snapp/Bloomberg/Getty Photographs
The 1200 saved the 1100’s dust-proofing, flashlight, and long-lasting battery, and added options aimed squarely on the developing world. The 1200 was the first to incorporate call-time monitoring and a multiuser cellphone e-book, permitting homeowners who deliberate to lend their system to arrange name limits primarily based on time or price. This function helped allow what Nokia researchers referred to as kiosks—casual pay-per-call providers, by which an enterprising cellphone subscriber charged neighbors and relations by the minute to be used of the system.
In 2006, Nokia studied how Ugandans used their Nokia telephones in rural and distant areas. An internal company slide deck from the time reveals simply how keyed-in Nokia was to its lowest-income customers. “Village cellphone operators are sometimes ladies,” the slide deck notes. “And there are usually numerous youngsters round. (Telephones have to endure appreciable abuse from chewing, mud, sweat, and so forth.)”
“A unit of cellphone time is 60 seconds,” one other slide states. “However to keep away from unintentionally going over that point and incurring additional prices, kiosk operators shorten the unit to 57 seconds, permitting a three-second margin of error. Shared cellular used as cellphone kiosk should present name time.”
Nokia’s familiarity with its market couldn’t shield the corporate eternally, although.
Nokia sought out person enter around the globe for the corporate’s system designs, together with internet hosting “Open Studio” contests soliciting customers’ sketches of their dream cellphone. Shaul Schwarz/Getty Photographs
That’s as a result of the iPhone wasn’t Nokia’s solely looming smartphone competitor. In September 2008, the primary Android cellphone went on sale—the HTC Dream, which was also sold as the T-Mobile G1.
Whereas the iPhone was aimed principally at early adopters and prosperous customers who might afford to drop a whole bunch of {dollars} on a brand new cellphone, Android telephones have been, within a couple of years, aiming on the similar low-cost, world person base Nokia was promoting to.
“I feel it’s honest to say Android is the one which disrupted the market extra for Nokia,” Bryer says. “Most of Nokia’s profitable units weren’t on the high-end market. However then, when Android got here alongside, it began to fill that decrease finish and ultimately took that market away from us.”
An government from Nokia India in 2010 holds the corporate’s 5530 Xpress Music and 5230 telephones, each of which had touchscreens, though solely the 5530 had Wi-Fi. Sam Panthaky/AFP/Getty Photographs
With two rising opponents within the low finish and excessive finish, the Finnish system maker responded with a tool that break up the distinction—and glad neither camp.
Launched in 2009, the Nokia 5230 tried to be a low-priced, touchscreen (although not multitouch) competitor to each the iPhone and Android. It bought a powerful 150 million models, doing particularly effectively in developing countries.
However the 5230 didn’t have Wi-Fi—one of the biggest complaints at the time. Within the creating world, Wi-Fi connections have been nonetheless uncommon, so the dearth of Wi-Fi made some sense. However the rest of the world was not pleased.
“We had such a giant hole and dominant place,” Bryer says. “Which does perhaps create a stage of consolation which it’s best to by no means get.”
How Nokia Misplaced the Smartphone Race
By the start of the 2010s, Nokia might have nonetheless drawn from the corporate’s labs, which have been often spinning out new applied sciences and improvements. Nevertheless, the Finnish handset maker in the end failed to show its R&D into viable new product strains in response to the rising smartphone risk.
Nokia’s predicament had precedent—Kodak, dominant in movie pictures, had really invented the digital camera in 1975 however failed to commercialize it earlier than digital imaging made its core enterprise out of date.
“The know-how coming from our R&D groups was leading edge,” says Gordon Murray-Smith, director of services and ecosystems intelligence from 2008 to 2011. He remembers attending annual R&D innovation days that showcased work on self-healing materials and versatile screens, lengthy earlier than these applied sciences have been seen elsewhere. “However why was Nokia not capable of commercialize a few of that basically fascinating and modern exercise greater than it did?”
Nokia desperately wanted an injection of life to alter its fortunes. The corporate’s first non-Finnish CEO, Stephen Elop (a Canadian recent off a two-year stint on Microsoft’s management staff), didn’t mince phrases.
In an inside memo from February 2011 that was quickly leaked to the media, Elop wrote, “The primary iPhone shipped in 2007, and we nonetheless don’t have a product that’s near their expertise. Android got here on the scene simply over two years in the past, and this week they took our management place in smartphone volumes. Unbelievable.”
In 2011, Nokia launched the N9, a smartphone with a Linux-derived operating system. Inside a 12 months, Nokia had pivoted towards its Home windows Telephone-powered line of Lumia units. Munshi Ahmed/Bloomberg/Getty Photographs
Elop oversaw the 2011 launch of a Linux-based smartphone, the Nokia N9. The N9 ran on a distribution of Linux referred to as MeeGo. Reviewers on the time praised the brand new smartphone course the Finnish cellphone maker had taken. “Probably essentially the most lovely cellphone ever made,” wrote one reviewer concerning the N9 for Engadget.
However the N9’s accolades didn’t in the end carry the day. Nokia introduced its Lumia line of telephones the identical 12 months—a direct pivot away from MeeGo towards the Windows Phone. It could be the final main strategic flip Nokia would take as a cellphone producer. From this level ahead, a succession of C-suite choices all however sealed the destiny of Nokia’s iconic line of telephones.
In 2013, Microsoft introduced its bid to acquire Nokia’s handset operations. After the sale went via the next 12 months, it rebranded the division Microsoft Cellular. However the 12 months after that, Microsoft determined it had made a expensive mistake, writing down $7.6 billion—nearly what it paid for Nokia’s handset division—and laying off practically half of the former Nokia staff it had inherited.
In 2016, Microsoft sold its feature phone assets to HMD Global. The latter nonetheless sells Nokia-branded phones—budget-friendly devices in addition to nostalgia reproductions of fashions from Nokia’s glory days. What remained was a model title, some intellectual property, and 20 years of hard-won classes about what it takes to remain on prime—and what it prices when you may’t.
“While you have a look at the gamers on the earth of smartphones at the moment, any of these gamers would wrestle ever to realize 14 consecutive years of being No. 1,” says Murray-Smith.
Partanen says there was a draw back to Nokia’s mobile-phone dominance. “Typically, being the primary mover isn’t essentially one of the best place,” he says. “Being a fast follower is one of the best place.”
The corporate itself in the end survived, even when the transition wasn’t painless. Nokia’s revenues, which peaked in 2007, fell sharply via the mid-2010s earlier than its new business line—telecom infrastructure—took off. Nokia now ranks among the many world’s prime three suppliers of 5G community tools, serving carriers across more than 125 countries, alongside Ericsson and Huawei. Though the corporate might by no means fairly crack the smartphone, it now performs a key function in offering the community spine these smartphones run on.
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