Sale of Nokia’s handset business sent shock waves through its home country.
HELSINKI, FINLAND – Finland’s biggest corporate success story is over and Finns are trying to make sense of what’s left.
Liisa Hannula, a 26-year-old soon-to-be teacher in Helsinki, has always had a Nokia phone. Now she says she might opt for a Samsung smartphone instead.
“Nokia is one of Finland’s main brands and it’s what I tell people abroad — that Nokia phones are from Finland,” she said. “Now I can’t say that anymore.”
The sale of Nokia’s handset business to Microsoft sent shock waves through its home country, where the phones are a source of national pride and at one point were carried by 90 percent of Finns. After introducing its first handsets three decades ago, Nokia emerged as Finland’s first major global corporation and symbolized the country’s transformation into a technology-driven economy.
Nokia, based near Helsinki in Espoo, took off in the 1990s to become the world’s largest mobile-phone maker. At its peak in 2000, it generated about 4 percent of Finland’s gross domestic product. That fell to about minus 0.2 percent in 2012, an unsustainable position driven by heavy losses, according to Jyrki Ali-Yrkkoe, an economist at Helsinki-based researcher ETLA. The deal with Microsoft will help it generate as much as 0.3 percent of GDP next year, he said.
“Nokia has been the flagship company in Finland even as its fortunes have waned,” Ali-Yrkkoe said by phone. “It’s going to take some time for Finland to recover from the shock and get used to the new Nokia.”
Nokia started as a wood-pulp and paper company in 1865 before expanding into rubber, electronics and eventually telecommunications. Once the world’s largest smartphone maker, Nokia’s market share topped 50 percent before Apple’s iPhone and Google’s Android operating system were introduced about six years ago. Nokia has lost more than 80 percent of its market value since then and no longer ranks among the top-five smartphone makers.
“Nokia is the most successful Finnish company of all time, which in its heyday brought Finland enormous amounts of well-being and international prestige, raising Finland’s self-esteem,” Economy Minister Jan Vapaavuori said in a statement Tuesday. “The biggest impact is on an emotional level. It’s the end of an era in Finland’s economic history.”
Nokia became an icon after pioneering the mobile phone in the 1980s, a product that later helped pull its home nation out of a three-year recession induced by a banking crisis and the loss of its main export market as the Soviet Union collapsed.