Introduction

The world’s No. 1 mobile maker and the first brand of phone everyone owned. Nokia were by no means the first company to release a commercially available mobile phone, but it was the first to do it really well, and with true mass appeal. During the late 1990s and early 2000s the 147-year-old Finnish company became a global technology star: In some emerging markets, so the story goes, the word ‘Nokia’ became a generic term for ‘mobile phone.’ But becoming synonymous with phones is where it all went wrong. Nokia sold phones in the hundreds of millions, controlled supply chains and had the tightest relationships with carriers. Customers meanwhile had to do mobile computing on a screen the size of their thumb. While Apple was designing the iPhone and Nokia was selling half a billion phones each year, Google bought a company called Android and announced an Open Handset Alliance, a grouping of industry players who would come together to build an open source OS for smart phones. Nokia was invited to join but refused to demean itself. As a result, Nokia’s brand image is declining since 2008. In 2007, Nokia had a market capitalization of €110 billion; by May 2012 this had fallen to €14.8 billion. Nokia failed to build a marketplace that would have lured in users and application developers. But alike touch screens, it was not as if Nokia did not try. They tried multiple times and failed every time.

Situation analysis

The Nokia of today is a very different, much diminished company compared to the giant of the mid-2000s. If not a spent force, then certainly a much reduced one: smaller, less profitable, with fewer assets, and resources at its command — and dwindling cash reserves (net cash fell to €3.6 billion by the end of Nokia’s Q3 2012, down from €4.2 billion in its Q2). It doesn’t even own its own headquarters any more: earlier this month it agreed to