Well-pleased Nokians carry symbol of their success everywhere

They call themselves the Nokians and they glide around their high tech glasss-heated headquarters clutching the symbol of their company's success - the mobile phone. If Nokia's headquarters, overlooking the Gulf of Finland on the outskirts of the capital Helsinki, seems just too shiny and its groomed employees just too smug when talking about the company's record-breaking balance sheet, it's perhaps understandable. Nokia is, after all, a huge international success story in a small country on the northern fringes of Europe with a population of just 5.5 million.

From small beginnings in 1865 when it manufactured everything from paper to galoshes, Nokia is currently riding the crest of the global telecommunications wave, with strong sales growth, high profits and a bright outlook.

Less than a decade after it began to divest its non-core operations and focus on telecommunications, the company has become one of the world's leading suppliers of digital mobile and fixed networks and boasts that it is the largest global manufacturer of mobile phones.

That claim was substantiated this week when figures from the Dataquest marketing consultancy showed that Nokia had toppled Motorola from the number one position. Nokia sold 37.4 million handsets in 1998, representing a 22.9 per cent market share and an 81.5 per cent rise in volume sales over the year before.

US company Motorola - which has substantial operations in the Republic - sold 32.3 million units, a 19.8 per cent share but only a 27.6 per cent improvement in volume. Ericsson of Sweden filled third place with 23.8 million units sold, well ahead of Panasonic of Japan and Alcatel of France.

The figures showed that Motorola remained the world leader in the declining analogue handset sector of the market because of sales in the US where digital telephony has been slow to take off.

In Helsinki, signs of the company's good fortune are everywhere. If you ask a taxi driver to take you to Nokia, you'll prompt the reply: "which one?" The company has about 20 premises in the Helsinki area and employs 42,000 people worldwide. Of some 20,000 Nokians based in Finland, 7,500 are in Helsinki. In the past three years alone, the company has hired about 17,000 staff worldwide.

On the way to its headquarters, Nokia House, in Espoo, on the western outskirts of the capital, another similar shimmering glass building dominates the horizon. It's the Nokia Research Centre which is under construction and due for completion next autumn.

In the south wing of Nokia House, an exhibition of the company's mobile phone products since 1982 illustrates the dramatic growth in the technology of this sector. The items range from Nokia's first hand-held phone, the 1987 Mobira Cityman 900 which looks like a two-way radio handset and weighs 800 grammes, to the latest palm-size silver-coloured 8810 model, which looks as much like a fashion accessory as a phone and weighs 118 grammes.

The company's emergence at the top of the mobile phone market follows the disposal of its tyres, cable machinery and colour television divisions and its exclusive concentration on telecoms.

The Finns - despite being renowned for dislike of small talk - have embraced the cellular boom. There are now almost as many mobile phones in Finland as fixed-line phones, according to the Ministry of Transport and Communications. Slightly more than 50 per cent of the population own a mobile phone - the highest density in the world. Among 18 and 19-year-olds, the penetration rate of mobile phones is near 100 per cent, according to Sonera, the state-owned telecommunications utility. Both the government and Nokia predict that the penetration of mobile phones will exceed fixed lines this year.

Nokia has just 5 per cent of its sales in Finland, with 51 per cent in the rest of Europe, 18 per cent in the Americas and 23 per cent in Asia-Pacific and 3 per cent in other countries.

"Competition is quite tough," says EijaRiitta Huovinen, communications officer, Nokia Mobile Phones. "More mobile phones are sold in the world than personal computers or televisions, so we have to stand out from the crowd and strong brand building and marketing is needed." As part of this thrust, the company has, since 1995, opened several dozen Nokia Point stores around the world. Its Dublin store, on Hibernian Way, opened last October while its central London store - in Regent Street - opened a month earlier.

"We are targeting fairly big cities and we are opening these Nokia Points in the most well known city areas. They have to be eye catching because it's like a kind of a statement for us," says Huovinen.

As the life cycle of mobile phones gets shorter, the company predicts that the upgrade market will account for more than half of all mobile phones sold at the turn of the millennium. Europeans on average replace their handsets every two to two-and-a-half years, while in Asia it is less than two years.

In Helsinki, this upgrade trend is already well developed, according to Jari Ikkela from the Setele store on Helsinki's main street. Last spring, Nokia introduced its 5110 model with snap-on coloured covers, and by the summer many Helsinki shops were out of them, he says.

To date, most people use their mobile phones just for speech and data still represents only a small percentage of the overall traffic over GSM networks. This is set to change, however, as the technology advances and Huovinen says Nokia is planning to be the first to capitalise on the high speed data capabilities that the next few years will bring as mobile systems enter the third generation (analog was the first generation and digital or GSM was the second).

Nokia has generated images of the mobile terminals of the next century - round-edged equipment which will allow the user to hold video conferences, send instant photographic e-cards or check up on restaurant bookings or flight information.

"The future will be a multimedia television-based hand-held device," says Huovinen. "This will be a reality in the new millennium. In general, the mobile phone will become a personal information device rather than just a phone."