Motorola vs Nokia

Paul Galvin and his brother Joseph founded the Galvin Manufacturing Corporation in Chicago in 1928 with $565 in capital. Their breakthrough came with car radios. They named the product Motorola — a portmanteau of "motor" and "Victrola" — suggesting music in motion. The name became so associated with quality that the company adopted it as its corporate name in 1947.

On April 3, 1973, Motorola engineer Martin Cooper made the first mobile phone call in history from a street corner in New York City. The device weighed 1.1 kilograms and offered 30 minutes of talk time before requiring 10 hours of recharging. Cooper called Joel Engel, his counterpart at AT&T Bell Labs — Motorola's rival in the race to build a portable phone. "Joel," Cooper said, "I'm calling you from a cellular phone, and it's a real cellular phone, a handheld, portable, real cellular phone."

Motorola launched the StarTAC in 1996 — the world's first clamshell mobile phone, weighing just 88 grams. It was the must-have device of the late 1990s. Motorola held over 50% of the U.S. mobile phone market. The company was at its peak. Within a decade, it would be unrecognisable.

Motorola invested $5 billion in Iridium — a satellite phone network requiring 66 low-earth orbit satellites. The concept was visionary: a phone that worked anywhere on earth. The execution was disastrous. By the time Iridium launched in 1998, terrestrial mobile networks had expanded to cover most places where people actually lived. The $3,000 handsets were heavy and could not be used indoors. Iridium filed for bankruptcy in 1999, fourteen months after launch. The U.S. military eventually bought the network for $25 million.

Google acquired Motorola Mobility in 2011 for $12.5 billion — primarily to obtain Motorola's 17,000 mobile patents, which Google needed to defend Android against Apple and Microsoft lawsuits. Google sold Motorola to Lenovo three years later for $2.91 billion, having extracted the patents it needed. The company that had invented the mobile phone was sold for less than a quarter of what Google had paid. Motorola Solutions — the public safety and enterprise communications division — continued separately, becoming a profitable $20 billion company serving police, emergency services, and government agencies. The consumer phone brand lived on as a Lenovo subsidiary, producing budget Android phones with declining relevance.

Nokia was founded in 1865 as a wood pulp mill on the banks of the Nokianvirta river in Finland by Fredrik Idestam. The company name came from the river. Nokia later diversified into rubber products — including the rubber boots that became famous across Northern Europe — and then into cables and electronics. By the 1960s, Nokia was a conglomerate making paper, rubber, and consumer electronics with no particular specialisation.

Nokia CEO Jorma Ollila made a radical decision in 1992: sell everything except mobile phones. Nokia divested its paper, rubber, cable, and consumer electronics divisions and bet the entire company on the emerging mobile telecommunications market. It was considered an absurd gamble — Nokia was a minor player in a market dominated by Motorola and Ericsson. By 1998, Nokia was the world's largest mobile phone manufacturer, holding over 40% of the global market.

The Nokia 3310, launched in 2000, sold 126 million units and became one of the best-selling consumer products in history. Nokia's ringtone — a melody taken from Francisco Tárrega's "Gran Vals" — was heard over 1.8 billion times per day worldwide. Finland's GDP was meaningfully dependent on Nokia's performance. The company seemed invincible.

Nokia's internal engineers had developed touchscreen prototypes as early as the late 1990s. The company had the technology to build a smartphone years before the iPhone. Internal research predicted that consumers would want internet-connected touchscreen devices. Middle management killed the projects repeatedly, believing they threatened Nokia's existing hardware business. When Steve Jobs unveiled the iPhone in January 2007, Nokia's CEO dismissed it as a niche product. Within five years, Nokia's market share had collapsed from 40% to under 5%.

Microsoft acquired Nokia's mobile phone business in 2013 for $7.2 billion. The acquisition was a disaster. Microsoft wrote down $7.6 billion — more than the purchase price — in 2015, and laid off 25,000 employees. The Nokia brand was sold to HMD Global in 2016. The Nokia 3310 was relaunched as a nostalgia product in 2017. People bought it entirely for sentimental reasons.

Nokia spent 2023-2025 cutting between 9,000 and 14,000 jobs — reducing its global workforce from 86,000 to around 75,600 — as 5G infrastructure spending by telecom operators collapsed after the initial deployment boom. Spending on radio access network products fell from $45 billion in 2022 to $35 billion in 2024. Nokia restructured from five business units into two, hired its first American CEO, and accepted a $1 billion investment from Nvidia to develop 5G and 6G software running on GPUs. The company that had once made rubber boots and then dominated mobile phones was now fighting to survive as a network infrastructure supplier — in a market it had helped create, against rivals who had caught up.