Professional Documents
Culture Documents
History
1938-1970
In 1938,[15] Lee Byung-chull (19101987) of a large landowning family in the Uiryeong county came to the
nearby Daegu city and founded Samsung Sanghoe (, ), a small trading company with
forty employees located in Su-dong (now Ingyo-dong). It dealt in groceries produced in and around the
city and produced its own noodles. The company prospered and Lee moved its head office to Seoul in
1947. When the Korean War broke out, however, he was forced to leave Seoul and started a sugar
refinery in Busan named Cheil Jedang. After the war, in 1954, Lee founded Cheil Mojik and built the plant
in Chimsan-dong, Daegu. It was the largest woolen mill ever in the country and the company took on the
aspect of a major company.
Samsung diversified into many areas and Lee sought to help establish Samsung as an industry leader in
a wide range of enterprises, moving into businesses such as insurance, securities, and retail. President
Park Chung Hee placed great importance on industrialization, and focused his economic development
strategy on a handful of large domestic conglomerates, protecting them from competition and assisting
them financially.[16]
In 1947, Cho Hong-jai (the Hyosung groups founder) jointly invested in a new company called Samsung
Mulsan Gongsa (), or the Samsung Trading Corporation, with the Samsung Group founder
Lee Byung-chull. The trading firm grew to become the present-day Samsung C&T Corporation. But after
some years Cho and Lee separated due to differences in management between them. He wanted to get
up to a 30% group share. After settlement, Samsung Group was separated into Samsung Group
and Hyosung Group, Hankook Tire, and others.[17][18]
In the late 1960s, Samsung Group entered into the electronics industry. It formed several electronicsrelated divisions, such as Samsung Electronics Devices Co., Samsung Electro-Mechanics Co., Samsung
Corning Co., and Samsung Semiconductor & Telecommunications Co., and made the facility in Suwon.
Its first product was a black-and-white television set.
1970-1990
In 1980, Samsung acquired the Gumi-based Hanguk Jeonja Tongsin and entered the telecommunications
hardware industry. Its early products were switchboards. The facility were developed into the telephone
and fax manufacturing systems and became the center of Samsung's mobile phone manufacturing. They
have produced over 800 million mobile phones to date. [20] The company grouped them together under
Samsung Electronics Co., Ltd. in the 1980s.
After Lee, the founder's death in 1987, Samsung Group was separated into four business groups
Samsung Group, Shinsegae Group, CJ Group and Hansol Group.[21] Shinsegae (discount store,
department store) was originally part of Samsung Group, separated in the 1990s from the Samsung
Group along with CJ Group (Food/Chemicals/Entertainment/logistics) and the Hansol Group
(Paper/Telecom). Today these separated groups are independent and they are not part of or connected to
the Samsung Group.[22] One Hansol Group representative said, "Only people ignorant of the laws
governing the business world could believe something so absurd," adding, "When Hansol separated from
the Samsung Group in 1991, it severed all payment guarantees and share-holding ties with Samsung
affiliates." One Hansol Group source asserted, "Hansol, Shinsegae, and CJ have been under
independent management since their respective separations from the Samsung Group." One Shinsegae
department store executive director said, "Shinsegae has no payment guarantees associated with the
Samsung Group."[22]
In the 1980s, Samsung Electronics began to invest heavily in research and development, investments
that were pivotal in pushing the company to the forefront of the global electronics industry. In 1982, it built
a television assembly plant in Portugal; in 1984, a plant in New York; in 1985, a plant in Tokyo; in 1987, a
facility inEngland; and another facility in Austin, Texas in 1996. As of 2012, Samsung has invested more
than US$13 billion in the Austin facility, which operates under the name Samsung Austin Semiconductor
LLC. This makes the Austin location the largest foreign investment in Texas and one of the largest
single foreign investmentsin the United States.[23][24]
1990-2000
Samsung started to rise as an international corporation in the 1990s. Samsung's construction branch was
awarded a contract to build one of the two Petronas Towers in Malaysia, Taipei 101 in Taiwan and the Burj
Khalifa in United Arab Emirates.[25] In 1993, Lee Kun-hee sold off ten of Samsung Group's subsidiaries,
downsized the company, and merged other operations to concentrate on three industries: electronics,
engineering, and chemicals. In 1996, the Samsung Group reacquired the Sungkyunkwan
University foundation.
Samsung became the largest producer of memory chips in the world in 1992, and is the world's secondlargest chipmaker after Intel (see Worldwide Top 20 Semiconductor Market Share Ranking Year by Year).
[26]
In 1995, it created its first liquid-crystal display screen. Ten years later, Samsung grew to be the world's
largest manufacturer of liquid-crystal display panels. Sony, which had not invested in large-size TFTLCDs, contacted Samsung to cooperate, and, in 2006, S-LCDwas established as a joint venture between
Samsung and Sony in order to provide a stable supply of LCD panels for both manufacturers. S-LCD was
owned by Samsung (50% plus 1 share) and Sony (50% minus 1 share) and operates its factories and
facilities in Tangjung, South Korea. As on 26 December 2011 it was announced that Samsung had
acquired the stake of Sony in this joint venture. [27]
Compared to other major Korean companies, Samsung survived the 1997 Asian financial crisis relatively
unharmed. However, Samsung Motor was sold to Renaultat a significant loss. As of 2010, Renault
Samsung is 80.1 percent owned by Renault and 19.9 percent owned by Samsung. Additionally, Samsung
manufactured a range of aircraft from the 1980s to 1990s. The company was founded in 1999 as Korea
Aerospace Industries (KAI), the result of merger between then three domestic major aerospace divisions
of Samsung Aerospace, Daewoo Heavy Industries, and Hyundai Space and Aircraft Company. However,
Samsung still manufactures aircraft engines and gas turbines. [28]
2000-2013
In the first quarter of 2012, Samsung Electronics became the world's largest mobile phone maker by unit
sales, overtaking Nokia, which had been the market leader since 1998.[35][36] In the August 21 edition of
the Austin American-Statesman, Samsung confirmed plans to spend 3 to 4 billion dollars converting half
of its Austin chip manufacturing plant to a more profitable chip. [37] The conversion should start in early
2013 with production on line by the end of 2013. On March 14, 2013, Samsung unveiled the Galaxy S4.
On 24 August 2012, 9 U.S jurors ruled that Samsung had to pay Apple Inc. US$1.05 billion in damages
for violating six of its patents on smartphone technology. The award was still less than the US$2.5 billion
requested by Apple. The decision also ruled that Apple didn't violate five Samsung patents cited in the
case.[38] Samsung decried the decision saying that the move could harm innovation in the sector.[39] It also
followed a South Korean ruling stating that both companies were guilty of infringing on each other's
intellectual property.[40] In the first trading after the ruling, Samsung shares on the Kospi index fell 7.7%,
the largest fall since October 24, 2008, to 1,177,000 Korean won.[41] Apple then sought to ban the sales of
eight Samsung phones (Galaxy S 4G, Galaxy S2 AT&T, Galaxy S2 Skyrocket, Galaxy S2 T-Mobile,
Galaxy S2 Epic 4G, Galaxy S Showcase, Droid Charge and Galaxy Prevail) in the United States [42] which
has been denied by the court.[43]
On 4 September 2012, Samsung announced that it plans to examine all of its Chinese suppliers for
possible violations of labor policies. The company said it will carry out audits of 250 Chinese companies
that are its exclusive suppliers to see if children under the age of 16 are being used in their factories. [44]
In 2013 a New Zealand news outlet reported a number of Samsung washing machines spontaneously
catching on fire.[45] The corporation is expected to spend US$14 billion on advertising and marketing in
2013, with publicity appearing in TV and cinema ads, on billboards, and at sports and arts events. In
November 2013, the corporation was valued at US$227 billion. [46]
Ironically, after few months Samsung Securities Co., Ltd. and City of London-based N M
Rothschild & Sons(more commonly known simply as Rothschild) have agreed to form a strategic
alliance in investment banking business. Two parties will jointly work on cross border mergers
and acquisition deals.[54]
MEDISON Co.,Ltd. Ultrasound Monitors
In December 2010, Samsung Electronics Co. bought MEDISON Co.,Ltd., a South Korean
medical-equipment company, the first step in a long-discussed plan to diversify from consumer
electronics.[55]
Grandis Inc. memory developer
In July 2011, Samsung announced that it had acquired spin-transfer torque random access
memory (MRAM) vendor Grandis Inc.[56] Grandis will become a part of Samsung's R&D
operations and will focus on development of next generation random-access memory.[57]
Samsung and Sony joint venture LCD display
On December 26, 2011 the board of Samsung Electronics approved a plan to buy Sony's entire
stake in their 2004 joint liquid crystal display (LCD) venture for 1.08 trillion won ($938.97 million).
[58]
In January 2013, Samsung announced that it has acquired medical imaging company
NeuroLogica, part of the multinational conglomerates plans to build a leading medical technology
business. Terms of the deal were not disclosed.[61]
Ace Digitech[edit]
Ace Digitech is listed on the Korea Exchange stock-exchange (number 036550).
Cheil Industries[edit]
Cheil Industries is listed on the Korea Exchange stock-exchange (number 001300).
Cheil Worldwide[edit]
Cheil Worldwide is listed on the Korea Exchange stock-exchange (number 030000).
Credu[edit]
Credu is listed on the Korea Exchange stock-exchange (number 067280).
Imarket Korea[edit]
Imarket Korea is listed on the Korea Exchange stock-exchange (number 122900).
Samsung Card[edit]
Samsung Card is listed on the Korea Exchange stock-exchange (number 029780).
Samsung Electro-Mechanics[edit]
Samsung Electro-Mechanics, established in 1973 as a manufacturer of key electronic components, is
headquartered in Suwon, Gyeonggi-do, South Korea. It is listed on the Korea Exchange stock-exchange
(number 009150).[67]
Samsung Electronics[edit]
Main article: Samsung Electronics
Samsung Electronics Co., Ltd. is a multinational electronics and information technology company
headquartered in Suwon and the flagship company of the Samsung Group.[68] Its products include air
conditioners, computers, digital televisions, liquid crystal displays (including thin film transistors (TFTs)
and active-matrix organic light-emitting diodes (AMOLEDs)), mobile phones, monitors, printers,
refrigerators, semiconductors and telecoms networking equipment. [69] It is theworld's largest mobile phone
maker by unit sales in the first quarter of 2012, with a global market share of 25.4%. [70] It is also
the world's second-largest semiconductor maker by 2011 revenues (after Intel).[71]
Samsung Electronics is listed on the Korea Exchange stock-exchange (number 005930).
Samsung Engineering[edit]
Main article: Samsung Engineering
Samsung Engineering Co., Ltd. is a multinational construction company headquartered in Seoul. It was
founded in January 1969. Its principal activity is the construction of oil refining plants; upstream oil and
gas facilities; petrochemical plants and gas plants; steel making plants; power generation plants; water
treatment facilities; and other infrastructure.[72] It achieved total revenues of 9,298.2 billion won (US$8.06
billion) in 2011.[73]
Samsung Engineering is listed on the Korea Exchange stock-exchange (number 02803450).
Samsung Everland[edit]
Samsung Everland engages in an array of services closely associated with the day-to-day lives and
business operations of its customers. Its business scope covers the three main sectors of Environment &
Asset, Food Culture, and Resort. Since its inception in 1963 and the launch of theme park 'Everland' in
1976, Samsung Everland has steadily built its presence across the markets of golf, building management,
food and beverage, energy, and environment, turning challenges into opportunities. Through this process,
Samsung Everland has managed to achieve its current market standing. As a corporation trusted by the
local community and renowned globally as a pioneer in the infrastructure of life, Samsung Everland
strives to help its customers lead fulfilling lives and achieve success in their business operations by
building the infrastructure for every aspect of life including entertainment, culinary, and business.
Samsung SDI[edit]
Samsung SDI is listed on the Korea Exchange stock-exchange (number 006400). On December 5, 2012
the antitrust regulators of European Union fined Samsung SDI and several other major companies for
fixing prices of TV cathode-ray tubes in two cartels lasting nearly a decade.[83]
Samsung Securities[edit]
Samsung Securities is listed on the Korea Exchange stock-exchange (number 016360).
Samsung Techwin[edit]
Samsung Techwin is listed on the Korea Exchange stock-exchange (number 012450).
taking on challenges. Shilla Hotels and Resorts is listed on the Korea Exchange stock-exchange (number
008770).
S-1 Corporation[edit]
S-1 was founded as Koreas first specialized security business in 1997 and has maintained its position at
the top of industry with the consistent willingness to take on challenges. S1 Corporation is listed on the
Korea Exchange stock-exchange (number 012750).
Joint ventures[edit]
Current[edit]
One of the top 3 companies in the world
aT Grain[edit]
State-run Korea Agro-Fisheries Trade Corp. set up the venture, aT Grain Co., in Chicago, with three other
South Korean companies, Korea Agro-Fisheries owns 55 percent of aT Grain, while Samsung C&T
Corp, Hanjin Transportation Co. and STX Corporation each hold 15 percent.[84]
Samsung Bioepis[edit]
Samsung Bioepis is a joint venture between Samsung Biologics (85%) and the United Statesbased Biogen Idec (15%).[88]
Samsung Biologics[edit]
Samsung Electronics Co. and Samsung Everland Inc. will each own a 40 percent stake in the venture,
with Samsung C&T Corp. and Durham, North Carolina-based Quintiles each holding 10 percent. It will
contract-make medicines made from living cells, and Samsung Group plans to expand into producing
copies of biologics including Rituxan, the leukemia and lymphoma treatment sold by Roche Holding
AGand Biogen Idec Inc.[89]
Samsung BP Chemicals[edit]
Samsung BP Chemicals Co., Ltd is a 49:51 joint venture between Samsung and the United Kingdombased BP, which was established in 1989 to produce and supply high-value-added chemical products.
[citation needed]
Samsung Thales[edit]
Samsung Thales Co., Ltd. (until 2001 known as Samsung Thomson-CSF Co., Ltd.) is a joint venture
between Samsung Techwin and the France-based aerospace and defence company Thales. It was
established in 1978 and is based in Seoul.[91]
Samsung Total[edit]
Samsung Total is a 50:50 joint venture between Samsung and the France-based oil group Total
S.A. (more specifically Samsung General Chemicals and Total Petrochemicals).
SB LiMotive[edit]
SB LiMotive is a 50:50 joint company of Robert Bosch GmbH (commonly known as Bosch) and Samsung
SDI founded in June 2008. The joint venture develops and manufactures lithium-ion batteries for use in
hybrid-, plug-in hybrid vehicles and electric vehicles.
SD Flex[edit]
SD Flex Co., Ltd. was founded on October 2004 as a joint venture corporation by Samsung and DuPont,
one of the world's largest chemical companies.[92]
Sermatech Korea[edit]
Sermatech owns 51% of its stock, while Samsung owns the remaining 49%. The U.S. firm Sermatech
International, for a business focusing on highly specialized aircraft construction processes such as special
welding and brazing.[93]
SMP[edit]
SMP Ltd. is a joint venture between Samsung Fine Chemicals and MEMC. MEMC Electronic Materials
Inc. and an affiliate of Korean conglomerate Samsung are forming a joint venture to build
a polysiliconplant.
Steco[edit]
Steco Co., Ltd. is established as the joint venture company with Samsung Electronics Co., Ltd and
Japan TORAY in 1995.[96]
Stemco[edit]
Stemco is a joint venture between Samsung Electro-Mechanics and the Japan-based Toray
Industries which was established in 1995.[97]
Defunct[edit]
Alpha Processor[edit]
In 1998, Samsung created a U.S. joint venture with Compaqcalled Alpha Processor Inc. (API)--to help it
enter the high-end processor market. The venture was also aimed at expanding Samsung's non-memory
chip business by fabricating Alpha processors. At the time, Samsung and Compaq invested $500 million
in Alpha Processor.[98]
GE-Samsung Lighting[edit]
GE Samsung Lighting was a joint venture between Samsung and the GE Lighting subsidiary of General
Electric. The venture was established in 1998 and was broken up in 2009. [99]
S-LCD[edit]
S-LCD Corporation was a joint venture between Samsung Electronics (50% plus one share) and the
Japan-based Sony Corporation (50% minus one share) which was established in April 2004. On
December 26, 2011, Samsung Electronics announced that it would acquire all of Sony's shares in the
venture.
Corning Inc.[edit]
Samsung acquires 7.4 percent of Gorilla Glass maker Corning, signs long-term supply deal.[103]
Doosan Engine[edit]
Samsung Heavy Industries currently holds a 14.1 percent stake in Doosan Engine, making it the secondbiggest shareholder.[104]
MEMC KOREA[edit]
MEMC's joint venture with Samsung Electronics Company, Ltd. In 1990, MEMC entered into a joint
venture agreement to construct a silicon plant in Korea.[106]
Pantech[edit]
Samsung buys 10 percent stake in rival phone maker Pantech.[107]
Rambus Incorporated[edit]
Samsung currently owns 4.19 percent of Rambus Incorporated.[108]
Seagate Technology[edit]
Samsung currently owns 9.6 percent of Seagate Technology, making it the second-largest shareholder.
Under a shareholder agreement, Samsung has the right to nominate an executive to Seagates Board of
Directors.[109]
Sharp Corporation[edit]
Samsung owns 3% of the rival company.[110]
SungJin Geotec[edit]
Samsung Engineering holds a 10 percent stake in Sungjin Geotec, an offshore oil drilling company that is
a subsidiary of POSCO.[111]
Taylor Energy[edit]
Taylor Energy is an independent American oil company that drills in the Gulf of Mexico based in New
Orleans, Louisiana.[112] Samsung Oil & Gas USA Corp., subsidiaries of Samsung, currently owns 20% of
Taylor Energy.
Wacom[edit]
Samsung owns 5% of the company.[113]
Major customer
Major customers of Samsung include:
Royal Dutch Shell
Samsung Heavy Industries will be the sole provider of liquefied natural gas (LNG) storage
facilities worth up to US$50 billion to Royal Dutch Shell for the next 15 years.[115][116]
Shell has unveiled plans to build the world's first floating liquefied natural gas (FLNG) platform. At
Samsung Heavy Industries' shipyard on Geoje Island in South Korea, work is about to
start[when?] on a "ship" that, when finished and fully loaded, will weigh 600,000 tonnes the world's
biggest "ship". That is six times as much as the biggest US aircraft carrier.[117]
United Arab Emirates government
A consortium of South Korean firms including Samsung, Korea Electric Power Corp and
Hyundai has won a deal worth 40 billion dollars to build nuclear power plants in the United Arab
Emirates.[118]
Ontario government
The government of the Canadian province of Ontario signed off one of the world's
largest renewable energy projects, signing a $6.6bn deal that will result in2,500 MW of new wind
and solar energy capacity being built. Under the agreement a consortium led by Samsung and
the Korea Electric Power Corporation will manage the development of 2,000 MW-worth of
new wind farms and 500 MW of solar capacity, while also building a manufacturing supply chain
in the province.[119]
Type
Chaebol
Industry
Conglomerate
Founded
1938
Founder(s)
Lee Byung-chul
Headquarter
Area served
Worldwide
Key people
Lee Kun-hee
(Chairman of Samsung Electronics)
Products
Services
Revenue
Net income
Total assets
Total equity
Employees
Subsidiaries
Samsung Electronics
Samsung Life Insurance
Samsung Fire & Marine Insurance
Samsung Heavy Industries
Samsung C&T
Samsung SDS
Samsung Techwin etc.
Website
Samsung.com
Nokia
Nokia Corporation[3] (Finnish: Nokia Oyj, Swedish: Nokia Abp; Finnish pronunciation: [noki], English /nki/) is
a Finnish communications and information technology multinational corporation that is headquartered
in Espoo, Finland.[1] Its Nokia Solutions and Networks company provides telecommunications
networkequipment and services,[4] while Internet services, including applications, games,
music, media and messaging, and free-of-charge digital map information andnavigation services, are
delivered through its wholly owned subsidiary Navteq.[5]
As of 2012, Nokia employs 101,982 people across 120 countries, conducts sales in more than 150
countries, and reports annual revenues of around 30 billion. [2]By the fourth quarter of 2012, it was
the world's second-largest mobile phone maker in terms of unit sales (after Samsung), with a
global market share of 18.0%.[6]Now, Nokia only has a 3.2% market share in smartphones. [7] They lost
40% of their revenue in mobile phones in Q2 2013. Nokia is a public limited-liability company listed on
the Helsinki Stock Exchange and New York Stock Exchange.[8] It is the world's 274th-largest company
measured by 2013 revenues according to the Fortune Global 500.[9]
Nokia was the world's largest vendor of mobile phones from 1998 to 2012. [6] However, over the past five
years its market share declined as a result of the growing use of touchscreen smartphones from other
vendorsprincipally the iPhone, by Apple, and devices running on Android, an operating system created
by Google. The corporation's share price fell from a high of US$40 in late 2007 to under US$2 in mid2012.[10][11] In a bid to recover, Nokia announced a strategic partnership with Microsoft in February 2011,
leading to the replacement of Symbian with Microsoft's Windows Phone operating system in all Nokia
smartphones.[12] Following the replacement of the Symbian system, Nokia's smartphone sales figures,
which had previously increased, collapsed dramatically.[13] From the beginning of 2011 until 2013, Nokia
fell from its position as the world's largest smartphone vendor to assume the status of tenth largest. [14]
On 2 September 2013, Microsoft announced its intent to purchase Nokia's mobile phone business unit as
part of an overall deal totaling 5.44 billion (US$7.17 billion). Stephen Elop, Nokia's former CEO, and
several other executives will join Microsoft as part of the deal. [15][16]
Type
Julkinen osakeyhti
(Public company)
Traded as
OMX: NOK1V
NYSE: NOK
FWB: NOA3
Industry
Telecommunications equipment
Internet
Computer software
Founded
Founder(s)
Fredrik Idestam
Leo Mechelin
Headquarters
Espoo, Finland[1]
Area served
Worldwide
Key people
Risto Siilasmaa (Chairman & CEO)
Mobile computers
Networks
Services
Revenue
Operating income
Net income
Total assets
Total equity
Employees
97,800 (2012)[2]
Divisions
Mobile Solutions
Mobile Phones
Markets
Subsidiaries
Navteq
Website
Nokia.com
History
1965-1967
The predecessors of the modern Nokia were the Nokia Company (Nokia Aktiebolag), Finnish Rubber
Works Ltd (Suomen Gummitehdas Oy) and Finnish Cable Works Ltd (Suomen Kaapelitehdas Oy).[17]
Eduard Poln(1861-1930), Nokia's founder, was a Finnish business leader ( Source: Nokia Corporation 's
official history, pages 1213, Martin Hiki, Edita, 2001). He was founder, CEO, Chairman of the Board
and the largest shareholder of the Finnish Gummitehdas' ("Rubberfactory"). He led the development of a
new rubber industry in Finland, and his group of companies built a modern wood and cable industry in
Finland. Poln decided to use the name "Nokia", the town where his factories were based, as a brand
name for his products to differentiate his products from Russian competitors. [citation needed]
Although these three companiesSuomen Gummitehdas, Suomen Kaapelitehdas and Nokia Abwere
not formally merged, as the law did not allow it at the time,Eduard Poln continued to create a successful
conglomerate that later became the Nokia PLC of today. Poln was the chairman, managing director, and
the largest owner of the group for 30 years.[citation needed]
Nokia Ab's history started in 1865 when mining engineer Fredrik Idestam established a groundwood pulp
mill on the banks of the Tammerkoski rapids in the town ofTampere, in southwestern Finland (part of
the Russian Empire).[18] In 1868, Idestam built a second mill near the town of Nokia, fifteen kilometres
(nine miles) west of Tampere, by the Nokianvirta river, which had better resources
for hydropower production.[19] In 1871, Idestam, with the help of his close friend and statesman Leo
Mechelin, renamed and transformed his firm into a share company, thereby founding Nokia Ab. However,
the brand name Nokia of today did not come from the company name, but from the name of the town
where Poln's factories were located.[19]
Towards the end of the 19th century, Mechelin sought to expand into the electricity business, but his
aspiration was initially thwarted by Idestam's opposition. However, Idestam's retirement from the
management of the company in 1896 allowed Mechelin to become the company's chairman (from 1898
until 1914), and he subsequently convinced most of the shareholders to receive their support. [19] In 1902,
Nokia added electricity generation to its business activities.[18]
Industrial conglomerate[edit]
In 1898, Eduard Poln founded Finnish Rubber Works, manufacturer of galoshes and other rubber
products, which later became Nokia's rubber business.[17] At the beginning of the 20th century, Finnish
Rubber Works established its factories near the town of Nokia and they began using Nokia as its product
brand.[20] In 1912, Arvid Wickstrm founded Finnish Cable Works, producer
of telephone, telegraph and electrical cables and the foundation of Nokia's cable and electronics
businesses.[17] At the end of the 1910s, shortly after World War I, the Nokia Company was nearing
bankruptcy.[21] To ensure the continuation of electricity supply from Nokia's generators, Finnish Rubber
Works acquired the business of the insolvent company.[21] In 1922, Finnish Rubber Works acquired
Finnish Cable Works.[22] In 1937, Verner Weckman, a sport wrestler and Finland's first Olympic Gold
medalist, became president of Finnish Cable Works, after 16 years as its technical director.[23] After World
War II, Finnish Cable Works supplied cables to the Soviet Union as part of Finland's war reparations. This
gave the company a good foothold for later trade.[23]
The three companies, which had been jointly owned since 1922, were merged to form a new industrial
conglomerate, Nokia Corporation in 1967 and paved the way for Nokia's future as a global corporation.
[24]
The new company was involved in many industries, producing at one time or another paper products,
car and bicycle tires, footwear (including rubber boots), communications cables, televisions and other
consumer electronics, personal computers, electricity generation machinery, robotics, capacitors, military
communications and equipment (such as the SANLA M/90 device and the M61 gas mask for theFinnish
Army), plastics, aluminum and chemicals.[25] Each business unit had its own director who reported to the
first Nokia Corporation President, Bjrn Westerlund. As the president of the Finnish Cable Works, he had
been responsible for setting up the company's first electronics department in 1960, sowing the seeds of
Nokia's future in telecommunications.[26]
Eventually, the company decided to leave consumer electronics behind in the 1990s and focused solely
on the fastest growing segments in telecommunications. [27] Nokian Tyres, manufacturer of tires, split from
Nokia Corporation to form its own company in 1988 [28] and two years later Nokian Footwear, manufacturer
of rubber boots, was founded.[20] In 1989, Nokia also sold the original paper business; currently this
company (Nokian Paperi) is owned by SCA. During the rest of the 1990s, Nokia divested itself of all of its
non-telecommunications businesses.[27]
1967 to 2000[edit]
The seeds of the current incarnation of Nokia were planted with the founding of the electronics section of
the cable division in 1960 and the production of its first electronic device in 1962: a pulse analyzer
designed for use in nuclear power plants.[26] In the 1967 fusion, that section was separated into its own
division, and began manufacturing telecommunications equipment. A key CEO and subsequent chairman
of the board was vuorineuvos Bjrn "Nalle" Westerlund (19122009), who founded the electronics
department and let it run at a loss for 15 years.
Networking equipment
In the 1970s, Nokia became more involved in the telecommunications industry by developing the Nokia
DX 200, a digital switch for telephone exchanges. The DX 200 became the workhorse of the network
equipment division. Its modular and flexible architecture enabled it to be developed into various switching
products.[29]In 1984, development of a version of the exchange for the Nordic Mobile Telephony network
was started.[30]
For a while in the 1970s, Nokia's network equipment production was separated into Telefenno, a
company jointly owned by the parent corporation and by a company owned by the Finnish state. In 1987,
the state sold its shares to Nokia and in 1992 the name was changed to Nokia Telecommunications. [31]
In the 1970s and 1980s, Nokia developed the Sanomalaitejrjestelm ("Message device system"), a
digital, portable and encrypted text-based communications device for the Finnish Defence Forces.[32] The
current main unit used by the Defence Forces is the Sanomalaite M/90 (SANLA M/90).[33]
In 1998, Check Point established a partnership with Nokia, which bundled Check Point's Software with
Nokia's computer Network Security Appliances.[34]
First mobile phones
The technologies that preceded modern cellular mobile telephony systems were the various "0G" precellular mobile radio telephony standards. Nokia had been producing commercial and some military
mobile radio communications technology since the 1960s, although this part of the company was sold
some time before the later company rationalization. Since 1964, Nokia had developed VHF radio
simultaneously with Salora Oy. In 1966, Nokia and Salora started developing the ARP standard (which
stands for Autoradiopuhelin, or car radio phone in English), a car-based mobile radio telephony system
and the first commercially operated public mobile phone network in Finland. It went online in 1971 and
offered 100% coverage in 1978.[37]
In 1979, the merger of Nokia and Salora resulted in the establishment of Mobira Oy. Mobira began
developing mobile phones for the NMT (Nordic Mobile Telephony) network standard, the first-generation,
first fully automatic cellular phone system that went online in 1981. [38] In 1982, Mobira introduced its
first car phone, the Mobira Senator for NMT-450 networks.[38]
Nokia bought Salora Oy in 1984 and now owning 100% of the company, changed the company's
telecommunications branch name to Nokia-Mobira Oy. The Mobira Talkman, launched in 1984, was one
of the world's first transportable phones. In 1987, Nokia introduced one of the world's first handheld
phones, the Mobira Cityman 900 for NMT-900 networks (which, compared to NMT-450, offered a better
signal, yet a shorter roam). While the Mobira Senator of 1982 had weighed 9.8 kg (22 lb) and the Talkman
just under 5 kg (11 lb), the Mobira Cityman weighed only 800 g (28 oz) with the battery and had a price
tag of 24,000 Finnish marks (approximately 4,560).[36] Despite the high price, the first phones were
almost snatched from the sales assistants' hands. Initially, the mobile phone was a "yuppie" product and
a status symbol.[25]
Nokia's mobile phones got a big publicity boost in 1987, when Soviet leader Mikhail Gorbachev was
pictured using a Mobira Cityman to make a call from Helsinki to his communications minister in Moscow.
This led to the phone's nickname of the "Gorba".[36]
In 1988, Jorma Nieminen, resigning from the post of CEO of the mobile phone unit, along with two other
employees from the unit, started a notable mobile phone company of their own, Benefon Oy (since
renamed to GeoSentric).[39] One year later, Nokia-Mobira Oy became Nokia Mobile Phones.
Involvement in GSM[edit]
Nokia was one of the key developers of GSM (Global System for Mobile Communications),[40] the secondgeneration mobile technology which could carry data as well as voice traffic. NMT (Nordic Mobile
Telephony), the world's first mobile telephony standard that enabled international roaming, provided
valuable experience for Nokia for its close participation in developing GSM, which was adopted in 1987
as the new European standard for digital mobile technology.[41][42]
Nokia delivered its first GSM network to the Finnish operator Radiolinja in 1989.[43] The world's first
commercial GSM call was made on 1 July 1991 in Helsinki, Finland over a Nokia-supplied network, by
then Prime Minister of Finland Harri Holkeri, using a prototype Nokia GSM phone.[43] In 1992, the first
GSM phone, the Nokia 1011, was launched.[43][44] The model number refers to its launch date, 10
November.[44] The Nokia 1011 did not yet employ Nokia's characteristic ringtone, the Nokia tune. It was
introduced as a ringtone in 1994 with the Nokia 2100 series.[45]
GSM's high-quality voice calls, easy international roaming and support for new services like text
messaging (Short Message Service) laid the foundations for a worldwide boom in mobile phone use.
[43]
GSM came to dominate the world of mobile telephony in the 1990s, in mid-2008 accounting for about
three billion mobile telephone subscribers in the world, with more than 700 mobile operators across 218
countries and territories. New connections are added at the rate of 15 per second, or 1.3 million per day.
[46]
addition to personal computers and displays, Nokia used to manufacture DSL modems and digital set-top
boxes.
Nokia re-entered the PC market in August 2009 with the introduction of the Nokia Booklet 3G mini laptop.
[53]
Challenges of growth[edit]
In the 1980s, during the era of its CEO Kari Kairamo, Nokia expanded into new fields, mostly by
acquisitions. In the late 1980s and early 1990s, the corporation ran into serious financial problems, a
major reason being its heavy losses by the television manufacturing division and businesses that were
just too diverse.[54] These problems, and a suspected total burnout, probably contributed to Kairamo
taking his own life in 1988. After Kairamo's death, Simo Vuorilehto became Nokia's chairman and CEO. In
19901993, Finland underwent severe economic depression,[55] which also struck Nokia. Under
Vuorilehto's management, Nokia was severely overhauled. The company responded by streamlining its
telecommunications divisions, and by divesting itself of the television and PC divisions. [56]
Probably the most important strategic change in Nokia's history was made in 1992, however, when the
new CEO Jorma Ollila made a crucial strategic decision to concentrate solely on telecommunications.
[27]
Thus, during the rest of the 1990s, the rubber, cable and consumer electronics divisions were gradually
sold as Nokia continued to divest itself of all of its non-telecommunications businesses. [27]
As late as 1991, more than a quarter of Nokia's turnover still came from sales in Finland. However, after
the strategic change of 1992, Nokia saw a huge increase in sales to North America, South America and
Asia.[57] The exploding worldwide popularity of mobile telephones, beyond even Nokia's most optimistic
predictions, caused a logistics crisis in the mid-1990s.[58] This prompted Nokia to overhaul its entire
logistics operation.[59] By 1998, Nokia's focus on telecommunications and its early investment in GSM
technologies had made the company the world's largest mobile phone manufacturer,[57] a position it would
hold for the next 14 consecutive years until 2012. Between 1996 and 2001, Nokia's turnover increased
almost fivefold from 6.5 billion euros to 31 billion euros. [57] Logistics continues to be one of Nokia's major
advantages over its rivals, along with greater economies of scale.[60][61]
Mobile phones
Mobile Phones is responsible for Nokia's portfolio of affordable mobile phones, as well as a range of
services that people can access with them, headed by Mary T. McDowell.[192] This unit provides the
general public with mobile voice and data products across a range of devices, including high-volume,
consumer oriented mobile phones. The devices are based on GSM/EDGE, 3G/WCDMA, HSDPA and CDMA cellular technologies.
At the end of the year 2007, Nokia managed to sell almost 440 million mobile phones which accounted for
40% of all global mobile phones sales.[195] In 2011, Nokia's market share in the mobile phone market had
dropped to 27% (417 million phones).[196]
Anssi Vanjoki resigned a few days before Nokia World 2010 and under new leadership team Jo Harlow
will look into the affairs of Smartphones portfolio.
On 27 April 2011, The Register reported that Nokia was secretly developing a new operating system
called Meltemi aiming at the low-end market. It was believed it would be replacing the S30 and S40
operating systems. Due to low-end market customers' demand of having smartphone features in their
feature phone, the OS would have included some features exclusive to high-end smartphones. On 26
July 2012, it was announced that Nokia had abandoned the Meltemi project as a cost-cutting measure.
Markets
Markets is responsible for Nokia's supply chains, sales channels, brand and marketing functions of the
company, and is responsible for delivering mobile solutions and mobile phones to the market. The unit is
headed by Niklas Savander.[192]
Subsidiaries[edit]
Nokia has numerous subsidiaries.[192] The largest in terms of revenues is Navteq, a Chicago, Illinoisbased provider of digital map data and location-based content and services for automotive navigation
systems, mobile navigation devices, Internet-based mapping applications, and government and business
solutions. Navteq was acquired by Nokia on 1 October 2007. [5] Navteq's map data is part of the Nokia
Maps online service where users can download maps, use voice-guided navigation and other contextaware web services.[192]
Until 2008 Nokia was the major shareholder in Symbian Limited, a software development and licensing
company that produced Symbian OS, a smartphone operating system used by Nokia and other
manufacturers. In 2008 Nokia acquired Symbian Ltd and, along with a number of other companies,
created the Symbian Foundation to distribute the Symbian platform royalty free and as open source.
CDMA, LTE and WiMAX radio access networks; core networks with increasing IP and multiaccess
capabilities and services.
In July 2013, an announcement stated that Nokia bought back all shares in Nokia Siemens Networks for a
sum of US$2.21 billion.[201]
Corporate affairs[edit]
Corporate governance[edit]
The control and management of Nokia is divided among the shareholders at a general meeting and the
Nokia Leadership Team (left),[202] under the direction of the board of directors (right). [203] The chairman and
the rest of the Nokia Leadership Team members are appointed by the board of directors. Only the
Chairman of the Nokia Leadership Team can belong to both, the board of directors and the Nokia
Leadership Team. The board of directors' committees consist of the Audit Committee, [204] the Personnel
Committee[205] and the Corporate Governance and Nomination Committee. [206][207]
The operations of the company are managed within the framework set by the Finnish Companies Act,
[208]
Nokia's Articles of Association[3] and Corporate Governance Guidelines,[209] and related board of
directors adopted charters.
Stock[edit]
Nokia is a public limited liability company and is the oldest company listed under the same name on
the Helsinki Stock Exchange, having been listed since 1915.[25] Nokia has had a secondary listing on
theNew York Stock Exchange since 1994.[8][25] Nokia shares were delisted from the London Stock
Exchange in 2003, the Paris Stock Exchange in 2004, the Stockholm Stock Exchange in 2007 and the
Frankfurt Stock Exchange in 2012.[211]
In 2007, Nokia had a market capitalisation of 110 billion; by May 2012 this had fallen to 14.8 billion. [212]
In addition, Nokia's stock raised around 39% on the 3rd of September 2013 after Microsoft bought Nokia.
[213]
Financial results[edit]
For fiscal Q2 2011 ending in June 2011, Nokia reported a net loss of 492 million, despite a 430 million
payment from Apple. Nokia cited decline in its mobile phone business as the primary cause of the loss. [214]
In Q1 2012 results were bleak. Nokia lost 1.34 billion. Revenue is down almost a third from a year ago.
[215]
By May 2012, Nokia share price had fallen 37.5 percent since the beginning of the year, and was
down 61 percent in the last year.[216][217]
Corporate culture[edit]
Nokia's official corporate culture manifesto, The Nokia Way, emphasises the speed and flexibility of
decision-making in a flat, networked organization, although the corporation's size necessarily imposes a
certain amount of bureaucracy.[218]
The official business language of Nokia is English. All documentation is written in English, and is used in
official intra-company spoken communication and e-mail.
Originally, the Nokia Values were customer satisfaction, respect for the individual, achievement and
continuous learning. Then until May 2007, the Nokia Values were Customer
satisfaction, Respect,Achievement, and Renewal. In May 2007, Nokia redefined its values after initiating a
series of discussions worldwide as to what the new values of the company should be. Based on the
employee suggestions, the new values were defined as: Engaging You, Achieving Together, Passion for
Innovation and Very Human.[218]
Online services[edit]
.mobi and the Mobile Web[edit]
Nokia was the first proponent of a Top Level Domain (TLD) specifically for the Mobile Web and, as a
result, was instrumental in the launch of the .mobi domain name extension in September 2006 as an
official backer.[219][220] Since then, Nokia has launched the largest mobile portal, Nokia.mobi, which
received over 100 million visits a month in 2008.[221] It followed that with the launch of a mobile Ad Service
to cater to the growing demand for mobile advertisement. [222] As of 2013, the website redirects to
www.nokia.com.
Ovi[edit]
Main article: Ovi (Nokia)
Ovi, announced on 29 August 2007, was the name for Nokia's "umbrella concept" Internet services.
[223]
Centered on Ovi.com, it was marketed as a "personal dashboard" where users can share photos with
friends, download music, maps and games directly to their phones and access third-party services like
Yahoo's Flickr photo site. It has some significance in that Nokia is moving deeper into the world of Internet
services, where head-on competition with Microsoft, Google and Apple is inevitable.[224]
The services offered through Ovi included the Ovi Store (Nokia's application store), the Nokia Music
Store, Nokia Maps, Ovi Mail, the N-Gage mobile gaming platform available for several S60 smartphones,
Ovi Share, Ovi Files, and Contacts and Calendar.[225] The Ovi Store, the Ovi application store was
launched in May 2009.[226] Prior to opening the Ovi Store, Nokia integrated its software Download! store,
the stripped-down MOSH repository and the widget service WidSets into it.[227]
Nokia discontinued the Ovi brand in 2011, continuing to offer its services under the main brand. [228]
My Nokia[edit]
Nokia offers a free personalised service to Nokia owners called My Nokia (located at my.nokia.com).
[229]
Registered My Nokia users can get free services as follows:
Tips & tricks alerts through web, e-mail and also mobile text message.
My Nokia Backup: A free online backup service for mobile contacts, calendar logs and also
various other files. This service needs GPRS connection.
Ringtones, wallpapers, screensavers, games and other things can be downloaded free of cost.
Nokia Messaging[edit]
On 13 August 2008 Nokia launched a beta release of "Nokia Email service", a push e-mail service, since
incorporated into Nokia Messaging.[231]
Nokia Messaging operates as a centralised, hosted service that acts as a proxy between the Nokia
Messaging client and the user's e-mail server. The phone does not connect directly to the e-mail server,
but instead sends e-mail credentials to Nokia's servers.[232] IMAP is used as the protocol to transfer emails
between the client and the server.