ABOUT THE CASE STUDY
This case study deals with how the mobile company giant
NOKIA captured the market and maintained its monopoly
in its initial years . But later on, it failed to match up with
rising competitors and ultimately resulted in the demise
of the firm.
HISTORY OF NOKIA
• Nokia in its foundation years was not into mobile and
• It was established in 1865 as a paper
mill by Fredrik Idestam at the
Tammerkoski Rapids in south-
• In 1918, Finnish Rubber Works acquired Nokia and in
1922, Finnish Cable Works was also acquired by the
newly formed conglomerate.
• In 1967,Nokia corporation was officially born that
mainly focused on four markets: paper, electronics,
rubber, and cable.
• In 1979, Nokia entered into a joint venture
with leading Scandinavian color TV
manufacturer Salora to create Mobira Oy,
a radio telephone. A few years later, Nokia
launched the world's first international cellular
• In 1984, Nokia acquired Salora and changed the
name of its telecommunications unit to Nokia-Mobira
• In 1987, the company introduced its first
compact phone called Mobira Cityman
900, which was also world's first hand-
held mobile telephone.
• In 1989, Nokia-Mobira Oy became Nokia Mobile
• The last decade of 20th century and initial years of
21st century was a boom for the company within
which it launched some of the most then renowned
phones like Nokia 1100, Nokia N-series, E-series and
many more making it the world leader.
• The phones provided by Nokia had a much higher re-
sale value compared to other mobile phone brands.
• Many of Nokia’s products were easy to use and were
usually coupled with a variety of handy accessories.
• Products offered by the company were available in all
• The biggest strength of the company was their brand
• While Nokia enjoyed its leadership, the early years of
21st century saw the rise of several companies which
came into the market with their mobile phones like
Samsung, apple, HTC, etc. that later on proved to be
the biggest competitors for Nokia.
• In 2007,Apple launched its first
with its own operating system IOS.
• In 2009, Samsung launched its
first smartphone-Galaxy I-7500
running on Android platform.
• Nokia expected to suppress these rising firms with its
brand image and leadership in the market and
continued with its existing technology and launched
some new phones with slight modifications.
• Its market capture went down drastically and people
switched to these new phones with higher utility and
• Eventually, Nokia was losing its position in the
market. Shown below are two graphs showing the
change in market capture of Nokia in 2011 & 2013
BEGINNING OF THE BIGGEST FALL
• In February 2011, Nokia’s CEO, Stephen Elop
and Microsoft's CEO Steve Ballmer jointly
announced a major business partnership between the
two companies, which would see Nokia
adopt Windows Phone as its primary platform.
• On 26 October 2011, Nokia unveiled its
first Windows Phone 7-based devices, the
high-end Lumia 800 and the mid-range Lumia
• In continuation to Lumia 800 & 710, Nokia along
with Microsoft launched a number of windows-based
phone but the fall continued. Following the second
quarter of 2013, Nokia made an operating loss of
• On 2 September 2013, Microsoft announced that it
would acquire Nokia's mobile device business in a
deal worth €3.79bn, along with another €1.65bn to
license Nokia's portfolio of patents for 10 years; a
deal totalling at over €5.4bn.
• In February 2014, Nokia X was launched running on
the Nokia X platform(Modified Android Jelly Bean
4.1.2) to compete with other android based phones in
the market. But the phone was highly criticized and
was soon discontinued.
• Since then, Microsoft acquired Nokia came up with a
number of phones but the fall continued and
ultimately resulted in demise of Nokia.
• Rumors are that Nokia will make a comeback in Q4
of 2016 with its android phone C1.
WHERE NOKIA WENT WRONG
• Nokia resisted change in its working operation. They
stuck with their conventional mobile designs even
when market needs were changing.
• Nokia overestimated the power of its brand name.
They expected to suppress new comers like Samsung
and Apple with their goodwill but failed to do so.
• Switching to windows didn’t pay well for Nokia.
They should have worked on bringing android phones
to match with their competitors.