Chapter 2
Nokia Has Transformed Its Business
Before we get into the specifics, I want to address a common misconception about Nokia.
Most of us probably remember Nokia as one of the most popular manufacturers of mobile phones in the ’90s and early 2000s. That was then. Today, Nokia is not a cell phone company. In fact, it sold its entire cell phone division to Microsoft in 2013.
Nokia doesn’t manufacture or sell cell phones. The only connection the company has to cell phones is that it licenses out the Nokia brand name to a Taiwanese company called HMD Global, which manufacturers Nokia-branded smartphones.
Almost all of the company’s revenue comes from wireless network infrastructure and internet routing equipment.
In 2010, Nokia only received 30% of its revenue from networking products like cellular base stations. Now it gets 85% of revenue from these products.
It has transformed itself into a wireless technology company through a series of acquisitions.
In April 2011, Nokia acquired the wireless network infrastructure assets of Motorola Solutions. This acquisition basically gave Nokia all of Motorola’s 2G, 3G, and 4G wireless infrastructure business.
In August 2013, Nokia acquired all remaining shares from the Nokia Siemens Networks joint venture and renamed the division Nokia Networks.
As mentioned before, in 2013, Nokia sold its entire mobile phone division to Microsoft.
In early 2016, Nokia agreed to acquire Alcatel-Lucent for €15.6 billion. This gave Nokia all of the wireless technology, routers and switches, and optical technology within Alcatel- In an interesting twist of fate, this also meant that Nokia acquired Bell Labs, a division of Alcatel-Lucent, through the deal.
This final deal was the one that gave Nokia the scale to compete with industry giants like Ericsson and Huawei head to head. And the Alcatel-Lucent deal also gave Nokia Bell Labs. That’s the same Bell Labs where Alexander Graham Bell invented the original telephone.
Bell Labs has a 140-year history of making groundbreaking discoveries. The lab is where scientists developed the transistor (the building blocks of semiconductors), lasers, the popular C and C++ computer languages, solar cells, and the first people to transmit 1 terabit per second (Tbps) over optical lines.
And recently NASA selected Nokia’s Bell Labs to supply the 4G LTE communications network for the Moon. That’s not a joke. They plan to deploy the 4G wireless network on the lunar surface before the end of 2022 in advance of a 2024 return mission to the Moon.
Now, Nokia said the deployment will evolve into 5G. But because the Moon is not populated and relatively flat, there will be no interference to the signal, so a 4G network is more practical there… It will be cheaper to deploy, and the signal will travel further.
NASA could have given this contract to anyone, but it chose Nokia because it felt Nokia has the best-performing wireless network equipment.
Chapter 3 coming--
