Nokia is one of the world's leading makers of the telecommunications infrastructure of mobile phone networks. Once a leading mobile phone handset manufacturer, its current businesses are Nokia Networks, which develops and deploys network infrastructure, and Nokia Technologies, its research and development and intellectual property rights unit. First incorporated in the Finnish city it's named after, Nokia has operations and customers in more than 140 countries. The company redoubled its commitment to telecom infrastructure with its acquisition the telecom-equipment maker Alcatel-Lucent. The deal finalized in early 2016.
Nokia's networks span the globe so it makes sense that the networks segment generates about 88% of the company's revenue. In the network segment, the mobile broadband unit accounts for 47% of total revenue with about 40% coming from the global services unit. Before it was sold to three automakers, the HERE segment provided about 8% of revenue. The rest of the company's revenue came from Nokia Technologies.
Europe is Nokia's largest contributor to sales, with 30% in 2014, followed by the Asia-Pacific region with 26%. Its business in North America generates about 15% of sales. Key R&D and software development locations are in China, Finland, Germany, and the US. Customers around the world include Bharti Airtel, China Mobile, T-Mobile, and Vodafone.
Nokia's year-to-year revenue was essentially flat with an increase of just €23 million from 2013 to 2014. The Nokia Networks segment posted a slight sales decrease in Global Services. HERE's revenue rose with higher sales to vehicle customers and more licensing activity from Microsoft. Nokia profit for 2014 was €3.4 million compared to a loss in 2013. The 2014 profit included €3.7 million from the handset sale to Microsoft.
With divestments and acquisitions, Nokia remade itself in a 12-month span between 2014 and 2015. It's betting that providing the equipment for wireless calls and networking will be more profitable than the consumer-oriented side of the business.
The first bookend came in April 2014, when the company completed the sale of its mobile phone handset business to software giant Microsoft. The unit accounted for more than half of Nokia's sales in 2012.
The other bookend came in April 2015 when Alcatel-Lucent agreed to Nokia's $16.6 billion buyout offer. The deal, which closed in January 2016, created the world's second biggest telecom equipment company behind Sweden-based Ericsson. Both Nokia and Alcatel-Lucent, based in France, have seen brighter days, but their combined $27 billion in revenue should provide them with the resources to compete against Ericsson, Huawei, Cisco, ZTE, and Samsung.
In between the deals with Microsoft and Alcatel-Lucent, Nokia made several acquisitions in 2014 that expanded its networking and mapping businesses. One HERE-related acquisitions provided predictive analytics to create maps across operating systems and screens. The Nokia Networks segment acquired part of the wireless networks business of Panasonic System Networks Company used to improve mobile broadband capabilities.
Prior to the Microsoft deal, Nokia bought from Siemens the rest of the Nokia Siemens Networks it didn't own, which is now the company's Nokia Networks segment.
Nokia sold its HERE map business for $3 billion to German carmakers Audi, BMW Group, and Daimler in mid-2015. The mapping business didn't fit with Nokia's technology strategy, but the automakers are adding more of those functions to their vehicles.