Maybe the ‘high point of Finland’ is still to come

Twitter tells me it’s 19 years today since Nokia’s iconic 3310 mobile phone was released. I remember that time with extreme fondness: an era of texting girls, playing Snake and composing ringtones. (I was only ever any good at two of those three. You figure it out.)

Tero Kuittenen, a Finnish games developer turned Nokia analyst on Wall Street, has a different recollection, as shared today on Twitter.

He called it “the high point of Finland”:

Before that crash, Finland was famously the place to be if you were in the mobile (or “wireless”) space. This piece in the WSJ from the time heralds that talent, while recognising that the Finns knew they were headed to either world wireless domination… or irrelevance:

But even as the world hails Finland as ground zero for the wireless revolution, some of its entrepreneurs are already asking themselves: for how long? The answer will make or break a few embryonic fortunes. It will also indicate to what extent the Web has already fallen irrevocably under the sway of a few U.S. companies that grabbed early leads.

(Back then the hottest mobile app was apparently one that pinged your phone every now and then with jokes about Swedes. “How many Swedes are needed to have sex? Three. Two are doing it, and the third is reading the manual.” …yeah.)

Anyway, we all know how the story goes, with Nokia failing slowly at first and then taking a dive once the iPhone showed how mobile software could and should be done.

Nokia’s story today is interesting. The brand is coyly on the up. After being licensed to HMD Global (a firm run by some ex-Nokia execs, still in Helsinki, still in the same building, in fact), sales of Nokia phones have risen sharply – 126% year-on-year, according to Counterpoint research. That equates to about 1% of the global mobile phone market. That sounds like nothing, but it isn’t.

(Related: Counterpoint also says Nokia pushes Android updates more quickly than any other phone maker – vital for security and usability, which should be a massive selling point.)

The real Nokia’s business, though, is in networking. And it’s great news there. Global political rows have gifted it a position as one of the probable fall-back 5G infrastructure providers for the West. Nokia stood little chance against Huawei, but Ericsson? Game on. Nokia has landed multi-billion dollar contracts with AT&T, T-Mobile and US Cellular. By the second quarter of 2019, Nokia said it had landed no less than 45 significant commercial 5G contracts.

It’s almost like Finland’s most famous business is back where it was in 2000. On the precipice of greatness and riches… but then, maybe not, if they can’t capitalise on that position. Investors are looking at Nokia’s stock and seeing a company potentially drastically undervalued:

It’s easy to believe that NOK stock might finally be ready to rise. The opportunities are real, and substantial. European countries aren’t putting the same pressure on Huawei as their U.S. counterparts, but the negative press surrounding that Chinese firm surely gives Nokia at least some sort of advantage. All told, Nokia looks ready to grow. At 13x earnings, Nokia stock isn’t priced as such.

Tero wistfully called 2000-2001 the “high point” for Nokia. I wouldn’t be so sure – 5G could have Nokia rising again.