The demise of Nokia's mobile phone business rocked Oulu in Finland, but the city reinvigorated itself by becoming a low power radio technology hub. We examine how the city recovered, and survey some of the companies that emerged
Nokia was once the biggest employer in Oulu in northern Finland. When the company closed its mobile phone business in the 2012-13 timeframe, almost 7,000 Nokia staff suddenly had no jobs and no future.
This is where the deep radio heritage from the local universities and expertise in designing and manufacturing mobile phones with Nokia for many years came in very useful.
Low power and high-performance radio will continue to be key factors in electronics systems, particularly with “smart things” that rely on connected devices and the internet of things (IoT). For example, with 5G the effective use of energy and accuracy of beam forming will be critical in improving technologies and systems.
The Way We Were
Nokia’s DNA is very much part of the new thriving city, made up of hundreds of businesses founded by former Nokia employees, or whose technology is driven by the knowledge and expertise that was developed during the company’s mobile phone heyday. ARM, Altair Semiconductor, Mediatek, and Nordic Semiconductor set up sizable development teams to scoop up the staff that became available in Oulu.
Many of the former Nokia buildings in Oulu have formed the foundation of incubators and technology parks. The Technopolis building, once occupied by Nokia, now houses companies such as Mediatek and others.
Juha Ala-Mursula, a Nokia veteran and now the head of the city’s development agency Business Oulu, said the core competency of the teams at Oulu from the early days was in low power radio frequency (RF) technology. In an interview with EE Times earlier this month, he told us, “We had a strong team in RF, printed circuit boards, and antenna design. The key research and development in Oulu was around power consumption. And, because of our extremely cold climate, we were also able to work on battery technologies that could withstand the extreme temperature.”
He and his colleagues remind visitors of Oulu’s place in the world, suggesting that 60% of wireless traffic globally is transmitted using technology originally developed in Oulu. Work on the first Nordic Mobile Telephone (NMT) network was conducted in the city in 1981; the world’s first base station was developed in 1992 in Oulu. Local researchers are building on that legacy with 6G research.
When the Axe Fell
Ala-Mursula led Nokia’s 3G R&D infrastructure team globally before leaving in 2010. He said the demise of Nokia was due to management issues and not market issues, especially in relation to mobile phones. But when the axe started to fall, he said that the government agencies, the universities, and Nokia started several programs to get people back on their feet – and even coordinated some of the various programs in a collaborative effort.
Nokia’s bridge fund provided not only a package based on an individual’s salary and length of service, but an additional €25,000 (US $28,000) if they started their own company.
The city, meanwhile, started 12 different programs, including a printed electronics center looking at printed intelligence and sensors, and a “Radio City 2020” program (which is now no longer active) looking at what new applications could be developed using radio and new RF platforms.
The whole region became a radio industry incubator, fueled by a development fund that started with €15 million (US $16.9 million) from Nokia. Private and other funding swelled the total to around €80 million (US $90 million). With all this money available to draw on, ex-Nokia staff created some 114 companies by 2015, according to Ala-Mursula.
A Web of Connections
The result is an intricate network of design services, manufacturing, and testing companies, connected to each other through employees who had once worked closely together within Nokia. For this reason, companies in the Oulu radio hub are able to rely upon and trust each other when working on new projects.
For example, Risto Timisjärvi, director of sales & marketing at Testilabs, which tests and certifies anything to do with radio, told us that those connections were the foundation for his company’s global network of labs. The company bought the equipment and lab space from Nokia. Testilabs was able to reach out to former colleagues and to partners they had previously worked alongside within Nokia – and have a reach as far and wide as Mumbai and São Paulo.
Timisjärvi referred to the company as the Uber of radio test services, with a network of 10 companies in the Oulu area alone providing radio performance, electromagnetic compatibility (EMC), and environmental testing. He said they service two of the world’s five leading smartphone vendors, two of the five leading cellular module vendors, and three of the five biggest sports watch vendors.
He added that while a lot of volume testing is done in China by some of these vendors, the reason they come to Oulu is because of the specialist test and certification services for features such as cameras and GPS that emerged from Nokia and Microsoft (which bought Nokia’s phone operations in 2013). He said all the major chip vendors located in Oulu are developing their long-term evolution (LTE) and IoT solutions in the city. He said there is now a strong IoT cluster in Oulu working on both chipset development as well as manufacturing. ARM, for example, has expanded its IoT team with around 100 people in Oulu, through its acquisition of Sensinode.
IoT is a Growth Driver
The IoT is driving a lot of the growth of companies in Oulu. Timisjärvi said it’s a significant part of their business and will become increasingly so. He said the next biggest similar IoT/radio cluster is Lund in Sweden, followed by Cambridge, UK, and then scattered around the world. Within the Oulu cluster, the entire ecosystem from design to manufacturing and testing is well established, and all within 20 minutes driving distance. This proximity is one of the key factors that had driven the success of Silicon Valley in the United States, and Oulu has clearly evolved naturally along the same lines, establishing its own “radio valley.”
Ala-Mursula also emphasized the value of having an entire ecosystem, from semiconductors and RF to the cloud, in Oulu’s success in overcoming the Nokia effect. “All the knowledge is within bicycle distance,” he commented. Many people use bicycles to get around, despite the fact that, being in Northern Scandinavia, there are huge amounts of snow cover.
Given what he had seen in his Nokia days and now with all of the successes that have emerged from Nokia (and Microsoft), we asked what he anticipates coming out of Oulu in the next few years. According to Ala-Mursula, “We’ll see a big breakthrough on the battery side, and a replacement in the current user interface in mobile phones.” He added there will be developments in 5G and 6G, with improvements in massive MIMOs and reliability.
This is echoed by Timisjärvi, who also called out antenna beam forming, which will be a critical part of the success of 5G. “Since you’ll need this in both the base station and antennas, the measurement of the performance of the antenna will be essential. This is the last thing you can do to improve the technology, and not too many people can do it, but in Oulu there is the capability.”
One of the venture capital investors in the region, Ville Heikkinen, a partner with Butterfly Ventures, told us, “In our experience, many of the best scalable startups have Nokia ecosystem heritage. In other words, they worked in the ecosystem as researchers, subcontractors, or within Nokia.” However, he suggested that the startups were more successful with ex-Nokia members on their team, rather than as founders.
As one of the many executives we talked to in Oulu told us: it’s a forest fire analogy. You need to burn a bit of the forest to enable it to grow further. That’s exactly what Nokia inadvertently did.
The Top Oulu Startups with Nokia Roots
Developer of the Oura ring, a wearable device analyzing sleep levels and other physiological parameters, helps to make informed lifestyle choices. The ring incorporates a dual-core ARM Cortex-based microcontroller, with proprietary pulse waveform and pulse amplitude variation detection infrared PPG sensor, body temperature sensor, and 3D accelerometer and gyroscope. The company told us power management design is vital for its infrared PPG sensor (PPG stands for photoplethysmography, a simple optical technique used to detect volumetric changes in blood in peripheral circulation, a technique providing valuable information related to the cardiovascular system).
In December 2018, the company announced it raised $20 million with most recent funding led by Michael Dell, plus investments from the founders of YouTube, Skype, Box and others, plus celebrities and athletes, including Will Smith and Lance Armstrong.
Many of the team worked with Nokia but the founders mainly had a background in Polar Electro, developer of wearable heart rate and fitness monitors primarily for sports. Oura’s electronics is developed by another ex-Nokia startup team, Haltian.
Sarokal Test Systems
Sarokal Test Systems’ products are used by chipset vendors, fronthaul equipment manufacturers, and telecom operators to develop, test, and verify their 4G and 5G network devices from the early design stages through implementation and field-testing. Its tester product family addresses the entire development and maintenance flow for cellular and wired transmission system testing. The technology is especially designed to detect RF problems.
The company was acquired by Siemens in February 2018, and the founder was involved in ASIC/FPGA design and verification, including base stations, at Nokia.
A spin-off from the Center for Wireless Communications at the University of Oulu — which is also leading the country’s 6G research — KNL Networks’ founders had deep collaboration with Nokia. It’s using shortwave radio to deliver its own independent mesh network providing reliable worldwide military-grade IoT for the maritime industry. KNL Networks uses proprietary technology high frequency (HF) radio to form a global mesh network. Ships at sea can make a cellular connection with another ship at port with a KNL device, with a range of roughly 10,000 kilometers. This is critical in maritime cybersecurity, especially with increasing risks, as highlighted by the infamous Maersk shipping hack.
The company started when three people met in a sauna — very common in Finland — and had an idea that they could utilize modern communications in the HF band. Two of them were radio amateurs, the other in military communications research.
The co-founders of this hardware design engineering firm were working within an emerging product group within Nokia (what they said was a startup within), until they got notification in 2012 that it was closing down. The team was working so well they decided to start themselves, and with core expertise in hardware design, power management and performance optimization, focused on wearables and IoT. They set up in September 2012 with help from Nokia and won their first contract in October for a design of the QuietOn noise cancelling earplugs and grew to 45 people within a year. It also designed the electronics and set up manufacturing for the Oura ring (a wearable device), as well as design for Specim’s spectral imaging cameras.
Haltian raised US $5 million in December 2018 from Finnish venture capital firm Inventure, and just recently became an Amazon AWS advanced technology partner.
TactoTek is a spinout from Finland’s VTT Technical Research Centre that collaborates closely with Nokia. Founded in 2011, the company integrates electronics and printed circuits – printed sensors, antennas, and LEDs – into surface materials such as cosmetic plastics and natural materials, including natural wood. Eighty percent of its injection molded structural electronics (IMSE) solutions are used in automotive applications.
It recently announced a tie-up with Nagase to market and sell its IMSE products in Japan. Nagase is a materials and parts supplier for automotive OEMs and their suppliers who are targets for IMSE parts. Nagase said its customers are asking for smart molded structures integrating electronics within 3D injection molded plastics, to achieve styling and weight reduction in thin parts with shapes that conform with design aesthetics.
This maker of noise-cancelling earplugs literally came out of Nokia – the founder was on a business flight traveling back from China and found the Bose headphones too big. After the 2013-14 Nokia closure, he and another Nokia engineer joined forces and in 2015, made the first prototypes, and got them tested and validated. Both had extensive experience and patents within Nokia and Microsoft, one founder was an audio, analog electronics and signal processing guru at Nokia who analyzed and fine tuned mobile phone and mobile accessory devices. Their big break came through a connection at the airline Finnair, who deemed the product perfect, resulting in serious production. After this, Lufthansa and several other airlines followed as customers.
While not a direct output from Nokia’s fall, the main founder Toni Soini had a long history with Nokia mobile modems, and in the early days led three hardware projects developing a CDMA cellular phone engine platform and automated test environment for cellular phones, as well as part of a team that developed a triple mode (GSM, WCDMA, and CDMA) cellular phone baseband platform. He came back to Oulu after leaving Broadcom and brought in two researchers from the local university and the VTT Technical Research Centre to set up Mimina Processor in 2016.
Minima provides near-threshold voltage design solutions that deploy dynamic margining and ultra-wide dynamic voltage and frequency scaling (DVFS) to minimize energy consumption in system-on-chip (SoC) designs while maintaining yield. Its dynamic-margining approach is an IP-based methodology for near-threshold voltage design that combines hardware and software to enable circuits to function at low power. It recently signed a strategic IP agreement with ARM whereby Minima Processor will have access to ARM Artisan physical IP for 22nm ultra-low leakage (ULL) process technology. This will allow Minima to optimize ARM-based SoC designs in mobile and consumer IoT applications requiring low-power, always-on, wake-up capabilities.