Nokia on Top of the World, Again

Nokia is no more a mobile phone dynamo, but it’s now the world’s largest telecom equipment supplier ahead of Ericsson AB and Huawei Technologies. Nokia is buying Alcatel-Lucent for $16.6 billion and the new global networking behemoth created as a result of this mega-merger—called Nokia Corp.—will be headquartered in Finland.

The second edition of my book “Nokia’s Smartphone Problem” released in November 2014 has a full chapter dedicated to the making of new Nokia from the ashes of a mobile phone giant. The book argues that the Finish handset titan had started taking its wireless network infrastructure business far more seriously after Nokia found itself flat-footed in the post-iPhone mobile era.

Nokia’s Smartphone Problem chronicles fall in smartphones and rise in LTE infrastructure

Nokia’s bid to acquire Alcatel-Lucent is merely the continuation of the journey that it started with the creation of the Nokia Siemens Networks (NSN) venture in 2006. Nokia combined its networks hardware business with that of Siemens and began to offload non-core assets like telecom consulting services and fiber-optic businesses. Initially, NSN, like most of its competitors, was operating in both wired and wireless infrastructure markets.

Nokia’s focus on the Long-Term Evolution (LTE)-based 4G infrastructure business played nicely for NSN, and by 2012, it had moved from fourth to second place in the LTE equipment ranking. In 2013, when Nokia sold its mobile handset business to Microsoft, the Finnish firm also paid Siemens $2.21 billion to gain full control of the NSN venture. Now the acronym NSN stood for Nokia Solutions and Networks instead of Nokia Siemens Networks. Eventually, it settled on Nokia Networks.

There was no doubt left in the early 2010s where Nokia was heading. The ‘New Nokia’ was inevitably about mobile infrastructure business. And the fact that Nokia had brought NSN chief Rajeev Suri to head the remaining Finnish company further cemented the notion that the New Nokia saw its future in the wireless equipment business. Fast forward to 2015, the Finnish mobile firm has completed its make-over by gobbling up a competitor of the size and scale of Alcatel-Lucent.

Nokia buys Alcatel-Lucent for $16.6 billion
(Image: Reuters)

The book “Nokia’s Smartphone Problem” has made the case that the Finish electronics giant could reinvent itself like Apple and IBM. Nokia has a history of successfully adapting to market shifts, the book argued, and that Nokia’s wireless gear business could make up for its smartphone debacle. “Things could change rapidly in the technology world … and the wireless market is still a wide-open field,” the book concluded.

Majeed Ahmad is the author of Nokia’s Smartphone Problem: The End of an Icon? The book is available in both paperback and e-book formats.