What was Nokia’s business when it started operations in 1865?

When Finland’s Nokia Company, which occupies a leading position in the field of the cell phone, started its business operations in 1865, leave alone mobile phones, even the ordinary phone was not invented. World’s first telephone was made by Alexander Bell in 1876. Nokia Company entered the telephone business at the beginning of the 1970s. Only a few people know about its business for about 100 years before that.

Nokia Company was established in 1865 by a Finnish engineer named Frederick Idestam as a newsprint-paper and cardboard manufacturing mill. As it was situated in a river-bank village named Nokia in Southern Finland, Idestam named the company Nokia in honor of the village. However, sticking to one business was not in the character of Idestam or his successors. So starting with paper Nokia Company has diversified into different product lines and has made a name for itself in electricity, footwear, rubber, motor vehicle tires, rainwear, metallic cables, telegraphic equipment, equipment of telephone exchanges, electronics and finally in the field of the mobile telephone business.

As Nokia had its roots established in 1865, by Mr. Idestam setting up his first wood pulp mill, it was time to expand. A mining engineer by profession, Mr. Idestam, in 1867, exactly two years later, was awarded at the Paris World Exposition. Then, the year of 1871 saw Mr. Idestam opening his second mill on the banks of Nokianvirta River. The name of the river would inspire Mr. Idestam to name his cellphone manufacturing company Nokia the very same year. It should be mentioned that this was a period when the only method of communicating i.e., paper, was being used, and Nokia had introduced new methods of production in producing cardboard and paper.

The company underwent closure during the war, which forced it towards certain difficulties, especially the closure of Russian markets, where the relations were well established and stable. However, after the war, Nokia was able to overcome the post-war crisis and popped back into the international business scene. Although at the time, Nokia was as close to the Russian Federation as it could possibly be, it focused itself on Scandinavian countries along with Western Europe to tackle competitors such as Serlachius.

The oil crisis in the 1970s brought a couple of changes to the company. Nokia, as a company, already had extensive business relationships with the Soviet Union. Finland, after years of a successful relationship with the Soviet Union, was able to make use of the special trade agreements. It offered lumber products in exchange for oil. However, as the oil prices witnessed a rising trend, the purchasing power of many Finnish companies, including Nokia, decreased.

As a result, Nokia had to step back from conducting business with the Soviet Union even though it contributed to 12% of its sales pre-oil crisis. The real change came when in 1975, new CEO Kari Kairamo was appointed. He was off the opinion that the company should not only focus on the domestic market but aim to expand internationally as well. This gave rise to a difference of opinions. On the one hand, Mr. Kairamo wanted to expand the company. On the other, the managers thought it would be better to sell it. They thought that managing a company that was focusing on two things at a time would not be possible. It will disturb the focus and attention of the company. Regardless, the CEO decided to keep the paper industry until half of it was sold in 1989, whereas the rest was sold during 1990-1991, with the company ending its interest in the forest industry to focus on developing cellphones and operating in the electronic business.