Finnish cell phone maker Nokia, the largest company in its homeland, employs about 130,000 people worldwide, many of them at its magnificent complex just outside of Helsinki. Nokia's star began to rise about 15 years ago with the rapid growth of the world's cell phone industry.
If the story sounds familiar, it's because it closely mirrors Israel's own hometown hero, Teva, and the fate of the Finnish giant may offer a cautionary tale for Israelis tying their fortunes to the pharma firm.
At the beginning of 1996 a Nokia share still cost about $2. Four years later it skyrocketed to an all-time high of $60 that reflected a company valuation of $200 billion, surpassing such giants as Motorola, Sony and Samsung, despite its lowly beginnings.
In a span of just several years the company had become the world's largest manufacturer of cellular devices, its success attributed to a knack for accurately identifying market trends. Nokia's growth also served, of course, as a springboard for Finland's stock market, providing a substantial boost to the wealth of the country's citizens.
Many Israelis wondered at the time why a local version of the Nokia story hadn't sprouted: Why could a country like Finland succeed in producing a technological titan while Israeli companies on a similar course, like Scitex, Elscint and ECI Telecom, faltered.
Over the past decade the picture has somewhat changed, beginning with Wall Street's technology stock collapse sending Nokia into a tailspin and forcing the company into a painful reorganization. In the meantime, cell phone market competition intensified and posed new difficulties: First smartphones like the BlackBerry bit off a piece of Nokia's market share, then Apple with its iPhones. Nokia's wide profit margins began shrinking.
The last few years have been challenging. In 2007 Nokia still earned $10.5 billion on $75 billion in sales. Over the last year this has shriveled to earnings of $2.8 billion from $55 billion in revenues. The damage to its financial performance caused Nokia's share price to plummet from $40 to just $10 within three years.
Israel produced over the past decade a "Nokia" of its own - Teva Pharmaceuticals. At $46 billion, Teva's market valuation has already surpassed that of Nokia. Due to exaggerated "home-team" bias, Teva shares have a prominent presence in the portfolios of many Israelis, tying their financial security to the company's fortunes.
They can only hope that Teva, whose shares represent 9.5% of the Tel Aviv Stock Exchange's TA-100 index, doesn't follow the slain Finnish giant into market mediocrity.
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