The Rise and Fall of Nokia

or Nokia. There are a lot of different pronunciations for it. I'm going with Nakia, and if it's wrong, it's wrong. But I'm gonna try and be consistent. Today we'll pick up with Nakia in the nineteen sixties and quickly make our way up to how it helped define the cellular phone age in the nineteen nineties, and then what happened after that, because it was a pretty precipitous fall, but it wasn't like it was just a steady climb either.

Up on the formation of the Nakia Corporation, businessmen named Bjorn George Wilhelm Westerland became the first president and CEO of Nakia. Now he began to look for ways to expand into new fields like electronics in telecommunications. He also encouraged the research and development departments in Nakia to work on their own projects, something that Google would copy decades later, sort of like that of your weekly time can be

dedicated to personal projects. It was similar in that way, except not necessarily laid out specifically as twenty percent of your time. But the whole idea was get smart people together, let them work on things that they think are interesting, and you might be able to benefit from that. Nakia would diversify and begin investing in new businesses, nearly all of which would cater to the Soviet Union's need for

electronics and robotics, including computers. Nakia also created manufacturing facilities for scientific equipment, again for the Soviet Union. While the U s s R. Was doing business with Finland, the US was becoming increasingly agitated by the whole thing, because this was during the Cold War between the United States and the U. S s R. And America began to

let Nakia know that it was being watched carefully. Nakia was importing components from the United States and then incorporating them in products that there was ultimately selling in the U S s R, which wasn't really helping things with the U. S relations because the United States sort of had this policy of let's not help the Soviets out if we can possibly avoid it, and this created a very high tense situation throughout the entire world, and Finland

in general and Nachia in particular, we're kind of straddling the line a little bit. According to the newspaper Madras Courier, Nakia was building computers for the Soviet Union by nineteen seventy one. Now, I say according to the newspaper, because it's actually pretty hard to find a lot of definitive information in regarding Nakias products during this era. The website itself is pretty generic when it comes to covering this.

It kind of talks about the founding of the company as a paper mill and then jumps ahead into the nineteen eighties, skipping a whole lot of stuff in the middle. Jorn Westerland would retire as CEO in nineteen seventy seven, and he was replaced by Kari and Tero Oswald Kairamo. Kiamo had started at Nakia as an engineer in wood processing back when the company was still heavily involved in forestry industries. Like his predecessor, Karaimo wanted to grow Nakia

and acquire new businesses. He aggressively pursued new opportunities, sometimes to the consternation of analysts. Some industry experts were worried that Nakia was over extending itself, particularly with regards to consumer electronics, which was already a crowded space with fierce competition from the United States and Japanese companies. But that did not stop Kairamo from pursuing them, and in nineteen seventy nine, Knakia entered into a partnership with a Finish

television and electronics company called Solaura. Their joint venture was called Mobira Oi, a radio telecommunications network and electronics brand. Early radio phones were pretty limited, operating in the v h F frequency range, the very high frequency range, and requiring large antennas and hefty batteries, but this marked Knakia's first steps into what would become cellular phone technology. In fact, now is a good time to talk about cellular phone

technology in general. Prior to cellular phones, radio telephones were pretty limited. This has to do with the physics of radio signal transmissions as well as limitations on technology. Now, maybe you've played with radios and wondered what elements determined how far the radios can communicate with each other, like if you've had walkie talkies, for example, And as it turns out, there are several factors that determine how far a radio can transmit signals. So let's start with some

basic facts about radio waves. The radio frequency spectrum is a significant chunk of the overall electromagnetic spectrum. It ranges on the low end with very low frequency signals, which have a wavelength that can be as long as a hundred kilometers or sixty two miles for one wave at that wavelength. The radio signals frequency, as in the number of cycles of waves that go past an arbitrary point in space within a second, is three thousand cycles a second,

or three kilo hurts. That means three thousand of those waves would pass through a point in space every second as the signals passed through the area. On the high end, you have extremely high frequency radio waves which measure point zero zero one meters or point zero four inches in wavelength and have a frequency of three hundred thousand mega hurts. That means three hundred billion waves will pass through a given point in one set n as the signal passes through.

Radio wavelength is one factor that determines how far a radio signal will travel on Earth. A m radio signals, which in the United States range from five killer hurts to one point six oh five Mega hurts, have a long enough wavelength to follow the curvature of the Earth and bounce off the atmosphere, meaning they can travel a

really long distance. They can travel beyond the horizon. Shorter wavelengths, such as the ones that the US reserves for radio communication for things like wireless radios and walkie talkies, cellular phones, that kind of thing. They travel in the line of sight between a transmitter and a receiver. Now that does not necessarily mean that you have to be able to

physically see the receiver from the transmitter. For one thing, radio waves can penetrate some substances just fine, although other substances can reflect radio waves and cause them to bounce back, which I guess is being redundant, but you get what I'm saying. And because the Earth is curvature, that limits how far a transmitter can send a signal to a receiver because the Earth physically curves away from the line of transmission. If you send out a radio signal straight

out from your position. Let's say you're standing up and you send out a radio signal, that radio signal is going to continue in a straight line even as the Earth curves away from it. So eventually the Earth curves away enough where no one's going to be able to receive that signal, even if it were strong enough to keep on going and be strong enough to be picked up by an antenna. So the radio signals will just keep on going out into space rather than curving along

the Earth. This, by the way, is one of the many pieces of evidence that proves the Earth is in fact round, as if we didn't have enough already. But you know there are flat earthers out there. If in fact the Earth was flat, you would not have this problem with radio transmissions. So that's a pretty strong evidence that the Earth is round. Another limiting factor is transmission power. The power behind the signal helps determine how far it

can travel. Technically, it's not how far it can travel, but how strong the signal is once it gets beyond a certain point from its transmission Now imagine a radio transmission signal going out in all directions from a transmission antenna. Let's just say it's a regular antenna. It's not a directional antenna. You're sending a broadcast signal to this antenna. It's sending it out in essentially a sphere that extends out from that antenna. Now, as the transmission moves further

from the antenna, the signal is spread over a wider area. Right, it's getting it's it's thinning out, it's getting spread across more and more space. The law of conservation of energy tells us that the further out you are from a transmitter, the weaker the signal will be because it's spread over a greater area, and eventually you'll be too far from the source of transmission to pick up any useful signal. It'll be too weak for you to do anything with it,

to be able to hear anything. Early mobile phones were big and bulky, largely because they needed a powerful transmitter to get a signal to a nearby radio tower, which would then patch the call into a more traditional telecommunications infrastructure, in other words, into the regular phone system. This is part of the reason why early consumer mobile phones were mostly car phones because they could pull energy from the car's battery, or they could be big, bulky things that

you didn't carry around. They'd be too heavy to carry around, but you could drive them around in your car, and they would rely on a battery that was strong enough to power a transmitter that could send a signal to

a radio tower nearby. And typically cities would have a single radio tower, maybe a couple of radio towers, and each radio tower was only able to handle maybe a couple of dozen channels of communications simultaneously, which really limited the number of people who could communicate via radio phones at a single time, because once that channel is activated,

no one will can use it. So if you've got a radio tower and it can only handle maybe twenty four twenty six channels, one of those channels is going to be used for the signal you're sending out. The communication signal you're sending out, one of them would be used for the signal you're getting back. So each person is essentially taking up two channels, and that's because you would want to be able to speak and here at

the same time. If you're using a single channel for a communication back and forth, only one person can speak at a given time. You may have experienced this if you've used CB radio or walkie talkies or anything like that. Cellular technology helped change this by creating a new means of sending signals across the network. Rather than putting a few large radio antennas and strategic locations in major cities,

the cellular tower approach took a totally different approach. More on that in just a second, but first let's take a quick break to thank our sponsor. Now, before I went into the break, I mentioned that a primitive walkie talkie can only handle one channel of communication. It's called a half duplex radio. That means that all parties are communicating over that same frequency, and thus only one person

can talk on that frequency at any given time. And that's why we ended up developing a way of explaining to people when we were done talking. You know, you say over at the end of a sentence, meaning you are done with that thought, and that allows other parties to have a chance to chat and add in things, and they would say over when they were done, and that's how you would be able to manage communication traffic

across this single channel. A cell phone is a full duplex device which uses one frequency for sending communications and one for receiving communicating signals, which means multiple people can talk over each other. And cell phones have the ability to communicate over more than a fifteen hundred channels and they don't need to send signals for a far because of cell towers. Now, the cell and cell phone refers to regions of coverage, and these regions of coverage are

actually pretty small. Each cell region has an allocation of channels that represents a fraction of all available signals for cell phones. So let's say you're looking at a map of a region. Let's say it's a city, and imagine that the the map has an overlay on top of it to show the cell tower allocation, and it would look kind of like a hexagonal overlay. So if you've ever seen hexagonal maps that are often used in gaming, just imagine one of those overlaid on top of a

city map. Each hexagon represents a cell, the center of which you would argue is the cell tower, and uh, each cell would have one seventh of all the channels available for communication in that city. No two adjacent cells would have the same range of signals, So this is just for simplicity's sake. Well, I'm just going to use this as an example. This is not the way it actually shakes out. But let's imagine hypothetically that you have

seven hundred channels to work with the center hexagon. When you start off, Let's say that you're at your location and you're looking at a map. The hexagon you are in is using channels one through one hundred. The cell directly to your north can use signals on one through two hundred, and then you move clockwise around your center hexagon. You look at each hexagon that's adjacent to yours. Each one would have the next range of signals, so two hundred one to three hundred, the next one three one

to four hundred, and so on. Now, because cell phones transmit at a low power signal, just at a few watts, the transmissions do not go very far. The signal attenuates enough it it loses enough energy that it's not going to be picked up the on the next cell tower hexagon. You don't have to worry about interfering with the immediate neighbors.

That means you can actually reuse the channels again once you have a different cell in between them, so an entire city could use just seven channels this way, repeating channels once there's enough space between two cell towers that use that same range, so your center hexagon and a hexagon on the other side of one of your neighbors could use the exact same set of frequencies because you're

not going to interfere with your transmissions. The big advantage of cell phones is obviously that their mobile, and as you move towards the edge of a cell, your cells tower, the one that's in the hexagon you are currently in, it starts to detect that your signal is diminishing in strength. Meanwhile, the neighboring cell tower is picking up that your signal

is starting to get stronger. Now, every cell tower is monitoring the entire a range of channels, not just the channels that are specific to that cell, so they can they can monitor all of the channels of communication. They're only really concerned with the block of channels that are

assigned to that particular cell. However, now when you get close enough to the new cell, your old cell tower, the one that was where you used to be, will hand off the signal to its neighbor, to whatever neighboring tower you're heading toward, and that will send instructions to your phone that will switch channel frequencies. This all happens seamlessly. It can happen in the middle of a conversation, and it happens so quickly that we humans don't even notice

that it happens. Assuming that everything is working properly, and you can have a call on a speaker phone and pass through half a dozen cells through a single call as you're driving across town, and you wouldn't have a problem, assuming everything's working the way it's supposed to. Now, this concept of cell towers dates back to about nineteen seventy one, when A T and T referred to splitting phone service

in cities into areas called cells. The first mobile phone call happened in nineteen seventy three when Dr Martin Cooper of Motorola made the first cell phone call to Dr Joel s Ingle, who was the head of Bell Labs. So, in other words, Dr Cooper called up his biggest competitor for the first cell phone call, which I think is pretty awesome. And it took about a decade in the

United States for companies to build out this technology. And the protocols and the infrastructure to make cell phones a viable commercial product that was already taking place in Europe, but we were a little bit behind here in the US. Now, that's a basic overview of how cellular towers work, and there's a lot more detail than what I just mentioned, including the differences between analog and digital cellular service, but it's good enough for our discussions about Nokia. So let's

get back to that company. While the VHF phone service the Nokia launched in the late seventies wasn't cellular necessarily, not not in the same way that we would call it today, the company soon focused on developing cell phones due to the construction of the Nordic Mobile Telephone Network or in MT. This network provided coverage across Finland, Sweden, Denmark, and Norway and then later Iceland, making it the first

international cellular network. The networks launched in Sweden and Norway in one and then in Finland and Denmark the following year, and that gave companies like Nokia the opportunity to develop handsets for consumers. During this you are using the service as its backbone. Ino Nokia released the Mobira Senator this was a car phone and had a hefty battery to provide for the transmission strength needed to send signals from the phone to a radio tower, and the Senator weighed

twenty two pounds or ten krams. Pretty heavy phone. You can see why. It was a car phone, not a

cell phone that you would carry around with you. While the Senator saw a limited success, it became the first step towards Nokia asserting itself in a growing industry, and the company would release a slightly lighter transportable phone that was what they called it, called the Mobira Talkman, which weighed in at eleven pounds or five kilograms, so half the weight of the Senator, but still pretty darn heavy.

In seven, the company, still producing phones under the Mobira name, introduced the first handheld mobile phone and they called it the Mobira Cityman nine hundred. It weighed about one point six eight pounds or seven sixty grams. That's according to one source. I saw everything from seven hundred and sixty grams up to eight hundred grams, so one point six eight to like one point seven six pounds somewhere in

that range. It also cost a pretty penny. The price tag for the handset which was in a brick style with a big antenna, and this was a big mobile phone. It cost twenty four thousand finish marks back in nineteen eight seven. That would be about five thousand, four hundred fifty dollars in US money at the time, So we adjust that for inflation, that would be worth about eleven thousand, eight hundred forty three dollars today. So imagine spending nearly

twelve thousand dollars for a mobile phone. It got the nickname Gorba in Finland. Why because during a press conference in nineteen eighty seven, Soviet President Mikhail Gorbachev was photographed using one he called uh Moscow. I believe during the press conference using such a phone in night a highly competitive electronics market meant that Nakia saw a big drop

in profits. Times were getting tight for Nakia. CEO Kairamo, who had also served as chairman between nineteen eighty six and nineteen eighty eight, tragically ended his own life in December Night, a fact that Nokia at first tried to keep Wyatt. While there has been speculation over what moved Karramo to commit suicide, I found no definitive reason. Though there's no doubt he was under tremendous stress at the time, though whether or not that directly contributed, I can't say.

Simo Virlato assumed control of the company, at which at the time was still several businesses in very different industries, all kind of gloamed on together. This new CEO called for a complete restructuring of the company, and the company began to divest itself of various businesses, including the Finished Rubber Works, which was the first major company to create Nokia. I mean, you remember, there was the paper mill that

came before it that was technically called Nokia. But it was the founder of the Finnish rubber Works who really put all these companies together in the first place. He also divested the company of Nokia's computer division. Finland at the time was entering a severe economic recession. It was essentially a depression that was greater in magnitude than the one in the nineteen thirties for Finland, and then the Soviet Union collapsed, and the Soviets had been Nokia's chief customers.

So things were looking pretty grim for the company. But the story doesn't end here. I'll tell you how the story does end. In just a second, but first, let's take another quick break to thank our sponsor. During this dire economic situation, Nakia released the Nakia ten eleven phone. It was one of the earliest phones to have the Knackia name, not a Mobira brand, although it was also

called the Mobira Cityman two thousand in some publications. It had a battery that allowed for ninety whole minutes of talk time before needing a recharge, and it could hold up to contact numbers. It worked on the Global System for Mobile Communications standard, better known as g s M. This eventually became the dominant standard for mobile phones worldwide, with Code division Multiple Access or c d m A

being a distant second place. GSM would end up being pretty used pretty much everywhere, whereas c d M A became a standard found mainly in the United States and Russia, and in fact even in the US. It was a bit confusing because you had some telephone networks working on GSM and others working on c d M A. In

nineteen nine two, Yerma Allila became the new CEO of Nakia. Alilah, who had been the head of Nakia's mobile device division, decided the future of the company was in telecommunications, and so he continued the trend of divesting Nakia of all other businesses in order to focus exclusively on telecommunications. Shedding those businesses turned out to be the right move, as Nakia was able to refocus and grow and return to profitability. In n Nakia introduced the twenty one line of phones.

This was the first phone to have the famous Knakia ringtone, which goes like this, do do do do Do Do do do do do do do do I'm sure you've heard it a billion times. That's when it dated from. Two years later, in ninety six, the company released a sort of proto smartphone called the Nakia nine thousand Communicator. This thick handset flipped open to reveal a monochromatic screen and a full quarty keyboard, along with a direction pad and

function keys. You could make calls, you could browse the web such as it was back in and even send a facts using this phone. The device wasn't a commercial success, but found its fair share of devoted fans. Nonetheless, Nakia also released a phone called the Knackia eight one ten. It featured a cover that would slide down to reveal the number pad on the phone, inspiring some people to call this the Banana phone. It is featured in a little film that came out in nineteen You might have

heard of it. It's called The Matrix. If you remember the scene where Neo's in his office and he gets a delivery and he opens up the package and there's a phone inside it. Immediately he gets a phone call. That's the phone. It's a Nakia one. So watch that scene and you'll see this famous phone highlighted on screen by n Nakia had become the world's largest mobile phone manufacturer.

Not bad considering that they had just made the decision to focus exclusively on telecommunications just a few years earlier. This was a company that was doing a lot of everything, and then when they really focused on this one industry, they dominated it. They wrestled the title away from Motorola, and Nakia remained the top mobile phone company in the world for more than a decade. In fact, I think it was fourteen years that they held the top spot.

One of the big selling features for their phones was that you could play this little nifty game called Snake on them. Look, times were tough, and we took entertainment where we could find it. Guys in and two thousand Nakia launched the thirty two ten and the thirty three

tin hand sets, which both would sell like hotcakes. They'd be dwarfed in sales a few years later, however, when the eleven hundred series launched, Nakia would sell more than two hundred fifty million eleven hundred hand sets, making it not just the best selling mobile handset of all time, but also the best selling consumer electronics product at that point. In two thousand two, Nakia entered into a joint venture with Psion and a couple of hand set manufacturing competitors,

that being Ericsson and Motorola. The three of them joined together with the purpose of creating an operating system for mobile devices. The handset manufacturers wanted to build out the features on phones and increase their capabilities and create various little things that we would call apps today, and they wanted it to go well beyond sending and receiving calls and text messages and doing some rudimentary web browsing. The joint venture became Symbian Limited, and the operating system is

of course known as Symbian. Symbian serves as the foundation for software platforms and different handset manufacturers have different overlays on top of the basic operating system. You can think of them as different flavors of Symbion, So for Nakia as well as for Samsung and LG that platform was called S sixty, also known as Series sixty User Interface. The first Nakia phone to launch with this operating system was the Nakia seventy six fifty in two thousand two.

This was the first of Nakias phones to have a built in camera and a color display. It's largely referred to as one of the first smartphones, though it was still on two G networks at the time. The first three G phone from Nakia was the sixty six fifty, which came out a little bit late eater. By the way, this numbering standard, I don't understand where it comes from. Seven's eight six is tens twos. They don't seem to

be sequential, so I don't really get it. But the Knackia thirty six fifty would be the first Symbian Series sixty phone available in the United States, and it had a video recorders, so we were starting to see these more advanced features get incorporated Knockia phones. Now I could list all the phones Knockia launched in the two thousand's, but that would get super old super fast. Suffice it to say that the company was churning out new models

covering a spectrum of features and budgets. In those years. Year after year, Nakia was topping the list of mobile handset manufacturers. It's brand was known throughout the world, and the company was the in the best financial shape in its entire history. Now, that didn't mean that they didn't stumble a couple of times along the way. In two thousand three, for example, Knackia launched a device that became the punchline for a mini tech article. It was a

mobile gaming device called the Engage. It was part phone, part handheld gaming console. Not a bad idea necessarily, but the form factor left a lot of people laughing or

scratching their heads. The shape of the device inspired people to call it a taco because it was kind of taco shaped, and the placement of the speakers and microphone meant you had to hold the top edge, the flat side of the edge, not the surface, but the edge of the taco against your ear, so it would stick out from the side of your face quite a bit. It seemed weird to have it like that instead of using the flat side of the device, so it looked

pretty ridiculous and start. Contrast with the two million plus handsets that Nakia had sold, they managed to only sell around three million Engage units and they did not get good reviews. That just didn't take off. Yerma Alila retired in two thousand six as ce OH and would become the chairman of the company. The new CEO was a La Peca kalaz Va. In two thousand seven, Apple introduced the iPhone, which, as you may recall, caused quite the

stir in the mobile device world. Nakia, for its part, launched a service called O v O v I that encompassed internet services for Nakia's own line of feature phones. Also in two thousand seven, Knakia had a big problem when the company had to recall forty six million cell phone batteries across nearly all of its devices. Nakia promised that it was going to come out with a flagship phone called the N eight that would be a big competitor in the smartphone space, but it took longer to

develop than the company had anticipated. There were a lot of delays that frustrated customers, and things were not looking good for the company. Smartphones like the iPhone and various Android handsets were starting to take a serious chunk out of Nakia's dominant position. It was clear Nakia had not reacted fast enough to this changing landscape and allowed Apple, Android, and even BlackBerry to dominate, although BlackBerry wouldn't be a

problem for very much longer. By twenty ten, the company directors felt there was a need for change, and they fired Kalizva and hired the first non finish CEO for Nakia, Stephen elop Eli had previously worked for Microsoft in two thousand eleven. He likened Nakia's market position to that of a man standing on a burning platform. Things were looking pretty tough. By this time. Nakia was the only handset

manufacturer still using Symbion. Nakia had a new operating system in development called Mego Lennox in a partnership with Intel, and launched a phone that used it, but ultimately the company decided to scrap that plan in favor of concentrating on Microsoft's Windows Phone operating system. Interesting, since elap had become the new president and CEO of the company in November two thousand eleven, the company introduced the Loom eight

hundred Windows Phone. The Windows Phone platform underperformed in the market, which is an understatement. Nakia began to incur huge losses and Elap announced that Nakia would eliminate ten thousand jobs, shutting down a manufacturing processing plan as well. In Nakia announced it was selling its mobile division, which accounted for most of the company's success in the two thousand era, and then they were selling it to by the BA BA Microsoft. The sale was complete in two thousand fourteen

and the division was renamed Microsoft Mobile. Elap headed back over to Microsoft. I'm sure this raised several eyebrows. Nakia changed its focus once again, now concentrating on network equipment and services. Nakia is now in the business of running infrastructure for devices like mobile phones, rather than making mobile phones. It's also become a player in the Internet of Things space, and it still makes consumer electronic products under the Nakia

technolog G's division. And it's still in the phone business because it actually owns a phone company, although it leases it to a Chinese company called tc L. It's licensed the technology to tc L, so they don't make them themselves. They licensed the name to another company. So Nakia still exists, though its dominance in the mobile device market is no more. Really interesting to see how a company went from being the top brand in an industry and just in a

couple of years falling so hard. But then when you look at the full history of Nakia, you really realize that the cell phone part of its history is one of the shortest span of years in the entire company's history. I mean, it went for more than a century before it started looking into consumer electronics seriously. So in the grand scheme of things, it was a blip on the radar. But for many of us who are not familiar with the name of the company, and by us I specifically,

I'm talking about myself, it seems pretty shocking. I want to be totally clear here. I think that a lot of the decisions that were made by the company executives throughout the history of Nakia we're probably pretty solid decisions at the time they were being made. It's just that the circumstances that surrounded them, much of which were beyond

their control, ended up hurting the company. Uh. The only thing I think was a real detriment for them was their lack of initiative once the smartphone revolution really took off. And that wraps up our story on Nakia. Maybe in the future I'll do a follow up if there are any other interesting things to talk about. There were some stories that I didn't cover. Uh. There were some troubling stories about Nakia and the way its technology was handled

in Iran. There were accusations that Nakia allowed the Iranian government enough power to be able to limit the technology when Iranian citizen's we're trying to use it to communicate with one another and protest the government. But I felt like that was beyond the scope of this episode. It might be that it better serve to have a full episode about technology and its use on different sides of

political disagreements, political turmoil. I think that could be a really interesting episode that I might do in the future. If you have a suggestion for a future episode, please let me know what you would like me to talk about. Maybe it's a company, maybe it's a technology, maybe it's a person. Maybe there's someone you want me to interview or have on as a guest host. You can send me an email that address is tech Stuff at how stuffworks dot com, or drop me a line on Facebook

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