While it´s true that the financial community may value a company incorrectly at any given time, according to Benjamin Graham, over the long term it seems to have a more appropriate valuation (1). In addition, it is interesting to see the history of events next to Nokia’s stock price chart. As the popular saying goes, “A picture says more than a thousand words”.

The following graph shows the significant periods of Nokia, separated by vertical lines, numbered from 1 to 5. And in addition, it shows the time when the threats appeared, with vertical red lines and ordered by letters A to E.

Period: Focus on Telecom (1-2).

It is marked by Nokia’s focus on telecommunications. It stands out the acquisition of Mobira in 1988 (in addition to Schaub-Lorenz in the same sector). It also acquires companies in the electronics (Salora, Oceanic) and computing (Datasaab, Luxor, Ericsson) areas, but later disposes of them again, as well as business units in other sectors.

Its participation in the development of the GSM standard since 1985 would give it a competitive advantage in the following decade.

Period: Market leadership (2-3).

From the Nokia 1011 model launched in 1992, sales took off until 1998, when Nokia took over the leadership from Motorola.

The great crest and sudden fall in the value of the shares in 2001 can be explained by the coincidence of two great bubbles, of a very different nature, in the stock market: the dot-com crash and the telecoms crash. Despite this, independent of the stock market, Nokia’s sales were maintained (1).

Threat (A): In the midst of the dot-com crisis of 2001, Apple launches the iPod and its iTunes platform, transforming the music industry forever.


Period: Reactivity (3-4).

This period is characterized by Nokia’s reactive actions in the face of the growing threat of Apple and Android, which would become part of Google:

Threat (B): In 2003 the developer of the new operating system, Android Inc. is founded in Palo Alto, California.

Threat (C): In 2007 Apple launches the iPhone, forever changing the telecommunications and entertainment industry.

Efforts such as attacking adjacent game console markets with N-Gage, the Navteq mapping platform, evolving its Symbian operating system and the alliance strategy with Microsoft, resulted in desperate moves to defend its leadership.

Period: Irreversible fall (4-E).

With the emergence of new leaders such as Apple, Google and Samsung, Nokia finally succumbs in the cell phone market. There are two withering strokes:

Threat (D): One year after the iPhone phenomenon, the Taiwanese company, launches in 2008, the first cell phone using the Android operating system. A year later Samsung would launch the Galaxy model also using Android and thus turning the cell phone market into a highly competitive market.

Threat (E): In 2013, Microsoft buys Nokia’s telephony unit for more than 7 billion dollars.

Period: Reinventing itself (E-5 and onwards).

Today Nokia continues to reinvent itself as a strong competitor in telecommunications. Just the Japanese company Rakuten has just chosen Nokia as a provider to develop its own cellular network and cloud services.

* Hossein Moiin, Chief Technology and Strategy Officer at Nokia, describes the next steps to unlock the great potential of the 5G network, (https://youtu.be/gHl-m6eMppA).

Summary of Nokia’s history:

1865 Pulp and paper mill by Frederik Idestarm.

1868 Second pulp mill near the town of Nokia.

1871 Frederik Idestarm and his political friend Leo Mechelin formed the company Nokia Ab.

1896 Frederik retires.

1902 Leo expands into electricity generation.

1904 A rubber products factory is established at Nokia by Eduard Polon.

1922 The three companies (the rubber and cellulose and power generation companies, Finnish Rubber Works) plus a third cable producer (Kaapelitehdas) are merged under Polon’s management.

1930 They manufacture items for military use, such as respirators, among others.

1967 The three companies merge to form Nokia Corporation and divide their businesses into forestry, cables, rubber and electronics.

1967-1990 They manufacture a radio for military use. The electronics industry begins to gain strength. They manufacture capacitors.

1970 Nokia’s largest market is Russia. Nokia participates in the Cold War by importing components from the United States to develop technology for Russia.

1977 Kari Kairamo takes the lead as CEO transforming the company by acquiring many companies, mainly in the electronics industry.

1985 Nokia acquires TV manufacturer Salora. Luxor (Swiss) electronics and computer manufacturers. TV manufacturer Oceanic (French). Became the 3rd largest manufacturer of televisions.

1985 Also in these years, Nokia played an important role in the development of the GSM (Global System for Mobile communications) communications standard, which gave it a competitive advantage that would lead it to leadership in the cellular telephony market.

1987 Nokia acquires German telecommunications equipment manufacturer Schaub-Lorenz.

1988 Nokia acquires Ericsson’s computer division…which came from a Swiss division Datasaab. Resulting in the Nokia Data division.

1988 Nokia acquires Mobira, another telephone company that formed the basis of the cell phone business (Mobira, by 1981 had launched the first international cellular network Nordic Mobile Telephone, “NMT” and in 1987 its first fully portable phone Mobira Cityman 900).

1988 Under the leadership of Simo Vuorilehto, the tire division Nokian Tyres (Nokian Renkaat) is separated from the industrial conglomerate for not being a strategic division.

1987 The cable business is terminated after 44 years of production.

1991 Nokia sells its computer division Nokia Data to International Computers Limited (ICL) in the UK. In these years, Finland experienced its worst economic depression in history, due in large part to the collapse of the Soviet Union. However, in July of that year the first call using the GSM standard was made by the Prime Minister of Finland Harri Holkeri.

1992 – 2006 CEO Jorma Ollila had the vision to turn Nokia into a telecommunications and cellular phone company.

1992 Nokia 1011 is released, the first commercial cellular phone using the GSM telecommunications standard.

1996 Nokia sells its television division to Semi-Tech Corporation. In the meantime the rubber business was in conflict.

1997 Nokia launches communications satellite in the United Kingdom.

1998 Nokia won the leadership to Motorola in the cellular market. In December of that year it had manufactured 100 million cell phones.

1998 Nokia co-founded Symbian with its competitors. The company’s ownership was divided between Nokia (56.3%), Ericsson (15.6%), Sony Ericsson (13.1%), Panasonic (10.5%) and Samsung (4.5%). (2)

1999 Nokia introduced its first wireless LAN product line.

2000 ViewSonic acquired the Nokia Displays division for personal computers. At the same time Nokia employed around 55,000 people and had 30% of the cellular market (almost 2 times more than its closest competitor, Motorola).

2001 Nokia in partnership with Telefonica provides DSL modems in Spain. In the same year the stock market collapse called “Telecoms Crash” occurs, at the same time of the “Dot-com” crash.

2001 Apple launches iTunes and the iPod, forever changing the music industry.

2002 Nokia tries to break into the portable video game industry with its N-Gage device, which included a cell phone, MP3 player, FM radio and video player.

2003 Nokia 3600 models with integrated camera (using Symbian Series 60 OS) achieve spectacular success in the United States.

2003 Android Inc. is founded in Palo Alto, California.

2004 Shares fell 28.9% after 34.6% a year earlier.

2005 Nokia launches Mobile TV in Finland, which could be viewed on the Nokia 7710 cell phone with a special accessory that received the signal in the DVB-H standard. In the same year Nokia develops an Operating System based on Linux called Maemo that was incorporated in the Nokia 770 Internet Tablet, which had a touch screen and a stylus.

2005 Google acquires Android Inc. for 50 million dollars.

2006 Nokia N95 is launched and wins the “best-image cell phone” award in Europe.

2007 Nokia shares reach an all-time high and dominates 51% of the Smart Phones market, being by far the leader.

2007 Apple launches the iPhone, forever changing the telecommunications and entertainment industry.

2008 Nokia N82 is launched with a camera with xenon flash that gives it the award again.

2008 HTC, a Taiwanese company, launches the first cell phone using the Android operating system.

2008 Google announces Android Market, 4 years later, it would form Google Play.

2009 Samsung Galaxy is launched in July, using the Android operating system.

2010 Nokia N8 is launched with a high-resolution camera (12 megapixels).

2011 Google announces Google Music, a section of the Play Store.

2013 Microsoft buys Nokia (cell phone unit) for more than 7 billion dollars (4).

2019 Nokia remains a strong competitor in the telecommunications market. Japan’s Rakuten chose Nokia as a provider to develop its own cellular network and cloud services (5).

(1) “In the short term, the market is a voting machine, but in the long term it is a weighing machine”.. Benjamín Graham.
(2) Nokia time line: https://www.cnbc.com/quotes/?symbol=NOKIA-FI
(3) The income statements show sales in Millions of Euros of €30,376; €31,191; €30,016; in the years 2000, 2001, 2002 respectively. (https://boards.fool.com/nokia-financial-analysis-98-2002-19822661.aspx), (https://www.statista.com/statistics/267819/nokias-net-sales-since-1999/).

(4) Computerworld: https://www.computerworld.com/article/2945371/smartphones/microsoft-writes-off-76b-admits-failure-of-nokia-acquisition.html
(5) Reuters: https://www.reuters.com/article/us-nokia-rakuten/rakuten-picks-nokia-as-partner-for-japanese-mobile-network-idUSKCN1Q20V0