Nokia’s latest mega deals aim to reinvent a company associated with mobile phones it no longer sells

Good morning.

How will Apple reinvent itself? That day is coming. While deep discounts in China led to a 40% increase in iPhone shipments in May, iPhone sales and market share have been trending down. My Gen Z kids—Apple’s most loyal generation—would rather upgrade their battery right now than buy a new phone.

Will we even need smartphones by 2030? Nokia CEO Pekka Lundmark likes to talk about digital-physical fusion, predicting we’ll implant a lot of technology in our bodies.

Lundmark knows about disruption. He first worked for Nokia between 1990 and 2000, helping the Finnish company become the world’s biggest mobile phone maker with a market cap of $250 billion the year he left. In 2020, he returned to be president and CEO of a company that had one-tenth the value and no phone business, having sold it in 2014 to Microsoft, which shut it down at a loss about a year later.

Nokia didn’t die. Like many brands faced with decline, the Finnish company followed a path of reduction, resistance, reflection, and reinvention to reemerge in a different—if somewhat diminished—form. (Former smartphone rival BlackBerry is now a niche player in cybersecurity and software solutions.) Nokia is today a network infrastructure and services company, making products like 5G cellular antennas.

I caught up with Lundmark last week after Nokia announced two major deals: the $375 million sale of its undersea internet cable unit, and its $2.3 billion acquisition of Infinera, which will boost Nokia’s U.S. presence and product offerings for data centers.

“What we want to do is to accelerate our exposure to AI-driven markets,” Lundmark said. “In many aspects, the future of this industry will be decided in the North American market. You have the most sophisticated carriers, all the web scalars. Big tech is very much driven by North America.”

Does it matter that most people still associate the Nokia name with products that his company no longer makes? “The carriers know us,” he said. “But we really need to take the brand equity from the mobile phone area and reposition for different types of enterprise networks … We’re working with ports, mines, manufacturing companies and expanding to the defense sector as well.”

After all, name recognition doesn’t guarantee success. Apple started 2024 as the world’s most valuable brand, according to Brand Finance. It still shelved its EV ambitions and launched its Vision Pro headset to mixed reviews. Apple Intelligence could boost iPhone’s market share or become table stakes in a world pivoting to AI. And the Justice Department’s antitrust lawsuit could further impact Apple’s business model.

Every major technology shift brings new names to the fore. For Nokia’s Lundmark, what matters now isn’t size but profitability. “It's equally important to stop doing things as it is to start new things,” he said. “We want to focus on segments where we believe that we have global leadership.”

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Diane Brady
diane.brady@fortune.com
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This story was originally featured on Fortune.com