History of the top five phone manufacturers

There’s a well-known phrase, saying “behind every great man there is a great woman”. Along the lines of this logic, the success of the big cell phone manufacturers will involve numerous representatives of the fair sex. A good company is not born in a day – it will rather rise in the course of many years, and take the efforts of lots of people, actually.

We are going to review in short the history of the big five in the mobile business: Nokia, Samsung, Motorola, LG, and Sony Ericsson.

Nokia Head Office in Espoo, Finland

Nokia

Though strange it may seem, but the company that controls the biggest market share started as a wood-pulp mill as far back as 1865 in southwest Finland. Subsequently it moved to another town, adopting its name as well. It is curious that the town itself bears the name of the river, flowing through it, the Nokianvirta; an old Finnish word, which means marten in the local lingo.

Next, after World War I, the company joined a corporation that had rubber and cable departments as well. This is how the telecommunication section was born. With time, it started to turn more and more to wireless technology; for example, their first car phone was presented in 1982. It was designed in collaboration with the Salora Oy company, bought at a later stage by Nokia. What followed was the first portable (though with difficulty) phone in the world and the trail-blazing NMT-900, which could be used by one hand only! Despite its high price, it became an absolute sales hit, turning into a cult device. There were certain periods in which the company produced computers and CRT displays; however, telecommunication remained its main business.


One can say that Nokia as we know it today began to function in 1991 by demonstrating its pilot GSM unit. In the following year, the first commercial model, the 1011, was officially launched.

Losses from the other branches of the company and the related crisis even resulted in a human victim – the 1980s chairman Kari Kairamo committed suicide in 1988. It led to the cardinal decision to lay the main stress on telecommunications and cancel the developments in other fields. This trend, however, did not stop the Finnish zeal, which, together with the growing popularity of mobile phones, led to a serious crisis with logistics. It necessitated a serious restructuring of the entire system so that it would match the high demand. Instead of placing long-term shipment orders, real-time communication with the trading companies was introduced, thus reducing losses from unsold production. This solution gave Nokia a great advantage over their competitors, still in effect in our days.

The real big success was achieved by Nokia in the new century. Thanks to their partnership with Siemens AG and several reasonable mergers and acquisitions like those of Navteq, Twago, and Enpocket, the company has secured its development in various fields. At the annual meeting of the shareholders in May this year, a declaration was made that it was not the company’s vision to be regarded solely as a phone manufacturer. It is officially entering the circles of the big players such as Google, Apple, and Microsoft, by not only offering products, but creating various Internet systems as well.

Still, what remains of greatest interest to us, are the devices that Nokia has been and will be producing. It was no other company but Nokia that made model 1100, known as the best-selling consumer electronics product of all times (more than 200 million units worldwide).

Samsung

The history of the Korean giant is not as romantic as that of Nokia.

The telecommunications department is one of the five in Samsung electronics, which, for its part, belongs to the Samsung Group. The department was established in 1977. In 1983 its main goal became the development of mobile solutions, meant to pull the company ahead. The first attempts were car phones, and the first Korean mobile phone was born in 1988. However, people at that time seemed not to feel such a great need for mobile technologies, so only about a hundred or so units of it and the following models were sold.

The turning point in the manufacturer’s history is related to Kun Hee Lee, the president of the company in the 1990s, whose strategy we truly admire. He presented the mobile section with an ultimatum: should it not strongly increase the quality and competitiveness of the products, it would be subjected to a shutdown. The offspring of the above approach was the SH-700 model (1993), which offered a lot of improvements in comparison with the previous ones. Each unit was tested individually and the defective ones were burnt out for the sake of edification. This was how the slogan “Quality is Pride” was born, and the destroyed units’ value amounted to $188 million. Due to this policy, along with the new Anycall brand and the mass advertising, the company managed to achieve its main goal, namely – catch up with Motorola in popularity.

In 1996 Samsung produced its first CDMA phone, the SCH-100, in order to cover this new system. Only a year later the Koreans held 57% of the respective market in their home country, managing to sell a million units there. By 1999 they had managed to become number one in this sector worldwide, with a share of over 50%. Today they have lost their leading position in this field, though, to the other Asian giant, LG.

The breakthrough on the GSM market was much more difficult; their first model SGH-200 did not succeed in beating its competitors in Europe – Nokia, Motorola, and Ericsson. However, Samsung have gradually orientated as to the correct approach, involving exquisite design and hi-tech characteristics. Thanks to the right strategy, the company has turned into the world’s second largest mobile phone manufacturer.

This year the telecommunication sector of the Korean giant presented its new business plans. According to these, the phones of the company will be divided into six categories: Style, Infotainment, Multimedia, Connected, Essential and Business. There was also a scandal over bribery funds, secured by Samsung, so Kun Hee Lee was forced to resign.

Motorola

The company was established in Chicago in 1928 under the name Galvin Manufacturing Corporation. The Motorola brand appeared two years later in connection with their then produce – car radio sets. The name itself was derived from motor (motorcar) and ola (an implicit sound), or a sound in motion. The entire company was officially given this name in 1947.

For many years the company’s main produce was radio equipment, and later – transistors and computer processors. It manufactured the first commercial cell phone (announced in 1973, but released on the market only 11 years later). And this is not all, regarding their resource for novelties. In 1991 the company demonstrated a working GSM prototype. The iDEN technology, still in use by Nextel in the States, is also of their making. This was followed by the lightest phone of its time (StarTAC Wearable, 88 gr. weight, 1996), and the first ever model, supporting GPRS (Motorola Timeport P7389i, 2000).



The greatest success of Motorola in the 21st century was the launch of the cult model MOTORAZR V3. The phrase “like RAZR” is still in use today as a definition of a slim and stylish clamshell phone, made of metal. However, many are on the opinion that it was the last innovative product of the company’s telecommunications department.


In the last two years Motorola have registered serious losses and have gradually yielded their global market share to the advancing Korean giant Samsung. Some of the specialists have left the company to join Apple’s team, developing iPhone. Most financial advisers are on the opinion that Motorola has only a little time left to launch a product that can revive it. And the decision to divide the company in two in 2009 has been announced recently, as a measure to improve organization and level up the mobile sector. As for its name afterwards, it is not known yet.

LG Electronics

Like Samsung, the other big Korean manufacturer LG encompasses a wide market range, with the mobile phones comprising only a part of it. The company was established in 1958 under the name GoldStar and produced radio receivers, TV sets, and air-conditioners. In 1995, after its merger with the chemical company Lucky and the creation of LG Group, the electronics department was founded. It was named LG Electronics and included a department, responsible for the development of mobile technologies.

Getting into the business started for LG relatively late (only in 1997) with the production of CDMA phones for the American market. It took three years before they achieved their first serious success in the field, supplying a big number of units for Verizon Wireless. Their partnership with the mobile operator was also the key to their leading position in the CDMA market, attained in 2003. Meanwhile, LG managed to establish their presence in Europe, with the first successful phone being the IMT-2000, designed for Italy.

A world expansion followed, aimed at markets that have not been conquered entirely by the older players like Samsung, Motorola, and Nokia, such as Russia, Indonesia, and Australia. Despite having started later, the Koreans managed to achieve considerable success over a short period of time, becoming in 2005 the fourth largest supplier of mobile phones worldwide. It was in the same year that they produced a device supporting mobile television – the first one in history.

Sony Ericsson

Though strange it may seem, the manufacturer’s history began with a fire. The Swedes Ericsson are one of the telecommunication companies of longest standing (founded in 1876), but at the start of the 21st century it suffered heavy financial losses. A key factor to that was the big fire, which burst in the New Mexico factory, producing chips for the company. It led to intensifying the crisis in 2000, forcing Ericsson to look for external assistance. It came from Sony Corporation and laid the foundation of their co-operation in the production of mobile phones in 2001.

The company’s smartphones are of special interest. The first from that line, P800, was demonstrated in 2003. The biggest success, however, is related basically to the models of the W and K (musical and camera respectively) series. K750, released on the market in 2005, is the most successful Sony Ericsson phone.

Obviously, this heyday has gone, and in the recent trimester (the second of 2008), a sales fall of 97% has been registered. It made the company announce the forthcoming dismissal of 2000 workers.

It is interesting to know how the phones are being named during the process of their developing. They all bear women’s names and a great deal of these belong to famous tennis-players from the Women's Tennis Association (WTA), whose global sponsor is the company. We are very much looking forward to the visit of Venus (XPERIA X1) and Shiho (C905).

Market Share

Since the article discussed the mobile market shares on several occasions, here is some up-to-date information from the last trimester:

Nokia – 41.1%

Samsung – 15.4%

Motorola – 9.5%

LG Electronics – 9.3%

Sony Ericsson – 8.2%

Other – 16.4%

It is worth noting that despite the rapid growth of both Korean giants in recent years, Nokia’s sales are steadily growing. Moreover, it is curious that this has been achieved without the Finns’ launching the much-talked-about and looked for touch phones. Future will show whether Tube will turn into the next global hit, or whether Motorola and Sony Ericsson will stabilize their positions on the market.