Nokia Shifts To Selling Back-End Systems To Mobile Networks

jfruh writes: With Nokia's handset business now sold off to Microsoft, you might be wondering what the remainder of the company does, exactly. The company is trying to use its expertise at other end of its old business, offering data centers and virtualized infrastructure to wireless networking companies to make their businesses more efficient. Competitors include Ericsson, another mobile phone also-ran.

Comments

Also-ran?

[stoborrobots]

Ericsson was a key provider of telecomunication equipment long before it was a mobile handset manufacturer - in the same way as Alcatel, Lucent and Nokia long provided back-end hardware. For all of them, handset production was a short-term dalliance in the late 90s and early 2000s, not the entire history of the company...

Re:Also-ran?

[Anonymous Coward]

No no...

Much of the hardware that Nokia produced was superior and worked with only it's own handsets and wireless kit perfectly. Here's an example:
http://en.wikipedia.org/wiki/Enhanced_full_rate

Licensing and patent issues
The Enhanced Full Rate incorporate several patents. It uses the patented ACELP technology, which is licensed by the VoiceAge Corporation.
Enhanced Full Rate was developed by Nokia and the Université de Sherbrooke (Canada).

Just about everyone else just produced handsets, but couldn't use features that were only found in Nokia handsets.

Most people didn't care too. But you could certainly tell on older first-generation GSM phones as well as phones that were still being sold in 2004 that only the Nokia phones sounded "better than a landline"

It wasn't until UMTS came along and gave any better option... which was AGAIN a Nokia thing:
http://en.wikipedia.org/wiki/Adaptive_Multi-Rate_Wideband

Just about everything that makes up a mobile phone network is produced by Nokia, Ericsson, or Siemens. Other companies that once existed like Nortel had patents on key parts of GSM, UMTS and 4th generation mobile phone technology but they didn't actually produce the consumer hardware, just the software and the chips they run on.

People aren't aware that the current place we are in right now with SmartPhones is actually quite unprecedented. Up until the iPhone, companies like Nokia and Ericsson were producing both backend hardware and handsets (often with partnerships) and Nokia was the only one that produced "superior" hardware in it's home country. That's why Nokia handsets were far more popular in Europe. In the US, Motorola's flip-phone was what everyone wanted. And in the US, we had a pile of incompatible technologies and frequencies being used. So it didn't make sense for European handset manufacturers to produce anything other than low-end disposable handsets, because nobody would ever buy a high end handset because the phone carriers would never subsidize one.

Then LG and Samsung came into the space and started making substandard cell phones, and the rest is Android history. That was before Apple BTW. Because Samsung and LG produced all the "free" handsets, they had super-high warranty return rates.

That is the primary reason why I will never buy an Android phone, let alone a Samsung or LG phone. Seeing the kind of junk that was passed off then, and is still passed off now (just look at the difference between a domestic Samsung phone and a Korean-market model) just to get people to not buy into the Apple ecosystem just makes me roll my eyes.

People can not buy into Apple if they don't want to. That's not the point. The point is that there is no distinction between a "free" Android device and a 1000$ Android device, so this makes people think they are equal. That's about as equal as comparing a Kia Rio to a Lexus ES 350. Sure 4 tires and an engine makes it street-legal. That doesn't mean that they perform the same or have the same comforts.

Re:Also-ran?

[jbrown.za]

Spot-on ... Ericsson has revenues of well over $20 Billion USD. I wouldn't call that "also-ran". If you use a mobile phone anywhere in the world it is highly likely that Ericsson equipment is involved in some way on the back end.

Re:Also-ran?

[TheRaven64]

Nokia has also been in the market of selling the infrastructure for mobile networks for a long time. And, unlike the handsets, this is a very profitable place to be. Both Nokia and Ericsson saw the commoditisation of the handset market and Nokia in particular watched their margins evaporate and decided it was time to get out. But because they're now no longer in the public eye, they're perceived as losing. Now their customers are people who make money from the products that they sell, so are willing to pay a reasonable premium because a few minutes of downtime costs far more.

Of course, when Apple decides to concentrate on the high-margin part of a business, no one claims that they're dying, because they concentrate on a consumer-visible part of the market.

Re:Also-ran?

[RabidReindeer]

dalliance

You keep using that word. I do not think it means what you think it means.

"Short-term dalliances" tend not to nearly bankrupt a company.

Oh, I don't know about that. Some marriages have been wrecked by short-term dalliances.

Ask Tiger Woods.

Re: Nokia is a post it note in tech history

[Stormwatch]

Nokia didn't miss the smartphone market, they owned it with Symbian, and there was an upgrade path ahead with MeeGo. Their downfall came from the very top -- if it wasn't for M$-plant Stephen Elop and the suicidal move to Windows Phone, there's a good chance Nokia would still be the top handset maker.

Re:Until the non-compete clause runs out

[nojayuk]

Nokia is making and selling cell phones at the moment. It can't build smartphones (i.e. small computer tablets with a radio stage that can transmit and receive voice calls directly over mobile phone networks via GSM or CDMA) but it's a major player in the featurephone and basic cellphone markets with a lot of decent offerings at bargain prices for those folks who don't need a Cray in their pocket.