Leading position in mobile phone technology was enough for Ollila
Jorma Ollila
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By Jyrki Alkio
During Jorma Ollila's period as President and CEO, Nokia did not make any truly big corporate purchases.
The merger of the network operations of Nokia and Siemens was published two weeks after operative responsibility was transferred to Olli-Pekka Kallasvuo at the beginning of June last year. Ollila nevertheless undoubtedly had a big role in the negotiations.
Nokia did not need to buy know-how in the mobile telephone business, because the best experts were already in the company. Things were different in the early 1990s.
Ollila, head of the Mobile Phones unit of Nokia, closed a major deal in February 1991. Europe's largest mobile phone manufacturer acquired ownership of the second in the continent - the British company Technophone.
In the deal worth 238 Finnish markka (EUR 52 million), Ollila got exactly what Nokia needed - a foothold in the United States and efficiency in product development.
When announcing the deal, Ollila stated the company's policy on purchases: further deals do not seem sensible.
In retrospect the policy appears to have been a wise one.
Nokia rose in a few months past Motorola to become the world's largest manufacturer of mobile telephones - without buying any large companies.
The popularity of mobile phones grew rapidly in the 1990s. Nokia increased its turnover by double-digit percentages with each successive year. The rapid growth kept the owners happy.
Nokia's Ollila did not go corporate shopping until the end of the 1990s. The company acquired several smaller companies that had developed Internet network technology from North America.
Nokia wanted to strengthen its know-how in this business and was ready to pay more than EUR 100 million for unknown small companies. Compared with Navteq, the companies such as Ipsilon and Rooftp were small operations.
The failure of the attempted conquest of Europe by the previous director-general, Kari Kairamo may have tempered the enthusiasm for buying companies.
Ollila, Kallasvuo, and other members of Ollila's core group - Matti Alahuhta, Pekka Ala-Pietilä and Sari Baldauf could see from a short distance how Kairamo's acquisitions of television and computer factories nearly caused Nokia to collapse.
At the same time they learned how difficult it can be to integrate purchases within the same company.
Although the issue has not been discussed much, there were big, and perhaps crazy corporate purchases afoot even during Ollila's period as CEO.
The company is believed to have planned a few deals in the hunderds of millions of euros, and one worth a couple of billion, but these plans never panned out.
Helsingin Sanomat / First published in print 7.10.2007
More on this subject:
 Nokia buys new talent
Previously in HS International Edition:
Nokia to buy Navteq in Finland´s largest-ever corporate acquisition (2.10.2007)
JYRKI ALKIO / Helsingin Sanomat
jyrki.alkio@hs.fi
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