Nokia Analysis

PRATEEK SINGLA MBA GENERAL SECTION A BUSINESS ECONOMICS
Economics Assignment
Index
Table of Contents
General Information Nokia ................................................................................................................... 1
Financial Information Nokia .............................................................................................................. 1
Interesting facts about the company- .................................................................................................. 1
A brief history about Nokia ...................................................................................................................... 2
Vision and Strategy ................................................................................................................................ 10
Challenges : Moving with rapidly changing times ............................................................................... 10
Key elements of Nokias current strategy ........................................................................................... 10
Partnering with Microsoft .................................................................................................................. 10
Connecting the next billion ................................................................................................................ 11
Organisation Structure .......................................................................................................................... 12
Employment Generation.................................................................................................................... 12
Corporate Structure ........................................................................................................................... 12
Smart Devices .................................................................................................................................... 13
Mobile Phones................................................................................................................................... 13
HERE.................................................................................................................................................. 13
Nokia Siemens Network ..................................................................................................................... 14
Production Facilities .............................................................................................................................. 15
Market Segmentation ............................................................................................................................ 18
First ................................................................................................................................................... 18
Feature .............................................................................................................................................. 18
Smart ................................................................................................................................................ 18
Corporate Social Responsibility .............................................................................................................. 20
Education .......................................................................................................................................... 20
Health ............................................................................................................................................... 20
Livelihoods ........................................................................................................................................ 20
Awards and Accolades ........................................................................................................................... 21
Nokia scores top marks on Corporate Equality Index 2013 ................................................................. 21
Nokia named as one of worlds most sustainable technology companies ........................................... 21
Superbrands declares Nokia the leading brand in China ..................................................................... 21
Nokia The best place to work .......................................................................................................... 22
Other Awards .................................................................................................................................... 22
Financial Statements ............................................................................................................................. 23
Balance Sheet .................................................................................................................................... 23
Income Statement ............................................................................................................................. 24
.......................................................................................................................................................... 24
Cash Flow Statement ......................................................................................................................... 25
Income Graph .................................................................................................................................... 25
Latest News About Nokia....................................................................................................................... 26
Nokia Tax Battle (22/7/2013) ............................................................................................................. 26
Nokia sales miss estimates(19/7/2013) .............................................................................................. 26
S&P cuts Nokia rating further on Siemens venture buyout(6/7/2013) ................................................ 26
70% of Nokia Chennai handsets partially comply with new SAR norms: DoT(5/7/2013) ..................... 27
Nokia buys out Siemens in equipment JV for $2.2 bn(1/7/2013) ........................................................ 27
Nokia ties up with New India Assurance(11/6/2013) .......................................................................... 27
Determinants of demand for Nokia Cell Phones..................................................................................... 28
Demand Forecasting .............................................................................................................................. 32
What is Demand Forecasting? ........................................................................................................... 32
Consumer opinion survey ...................................................................................................................... 34
Method and Approach of Survey ....................................................................................................... 34
Survey Findings and Results ............................................................................................................... 34
Summary of Responses ...................................................................................................................... 34
Profile of People Surveyed ................................................................................................................. 34
Feedback about Nokia Mobiles .......................................................................................................... 36
Analysis / Results ............................................................................................................................... 42
Trend Analysis using Linear Regression .................................................................................................. 44
Historical Data ................................................................................................................................... 44
Regression Analysis ........................................................................................................................... 44
Forecasting ........................................................................................................................................ 44
Insight ............................................................................................................................................... 44
Raw Data from Quarterly Reports ...................................................................................................... 45
Graphical plot .................................................................................................................................... 46
Regression Analysis Results ............................................................................................................... 46
Cost Analysis ......................................................................................................................................... 48
What is Cost Function? ...................................................................................................................... 48
Cost function for Nokia ...................................................................................................................... 50
Production Function Analysis ................................................................................................................. 52
Board of Directors ................................................................................................................................. 56
Responsibilities of B.O.D. ................................................................................................................... 56
List of Board of Directors ................................................................................................................... 57
Leadership Team of Nokia ..................................................................................................................... 58
Vision & Strategy of Nokia Corporation ................................................................................................. 60
Key elements of Nokias strategy ....................................................................................................... 60
Philosophy of Nokia Corporation ........................................................................................................... 62
Nokia Product Range ............................................................................................................................. 64
The Mobira series (19821990) ......................................................................................................... 64
Original series (19921999) ............................................................................................................... 65
Nokia 1xxx Ultrabasic series (19962010) ....................................................................................... 65
List of Basic Models ........................................................................................................................... 66
Nokia Asha Series .............................................................................................................................. 68
Nokia Lumia Series ............................................................................................................................ 68
Online Services .................................................................................................................................. 69
Software Solutions............................................................................................................................. 69
Security Solutions .............................................................................................................................. 69
Brand Ambassador ................................................................................................................................ 70
Brand Positioning .................................................................................................................................. 72
Advertising Costs ................................................................................................................................... 74
Nokias pricing strategy ......................................................................................................................... 76
Retail Distribution Model....................................................................................................................... 78
Nokia R&D ............................................................................................................................................. 79
SAR Levels in Nokia Phones ................................................................................................................... 80
Retrospective Tax case of Nokia ............................................................................................................ 82
Corporate Social Responsibility .............................................................................................................. 84
Corporate taxation ............................................................................................................................ 84
Employees ......................................................................................................................................... 85
Environmental design ........................................................................................................................ 85
Materials ........................................................................................................................................... 85
Chargers ............................................................................................................................................ 85
Emissions........................................................................................................................................... 86
SWOT Analysis ....................................................................................................................................... 87
Strengths ........................................................................................................................................... 87
Weakness .......................................................................................................................................... 87
Opportunities .................................................................................................................................... 88
Threats .............................................................................................................................................. 88

PRATEEK SINGLA 1
Economics Assignment Nokia
General Information Nokia
Founded 1865 (at Finland)
1995 (at India)
Founders Fredrik Idestam
Leo Mechelin
Headquarters Espoo, Finland
Chief Executive Officer Stephen Elop
Chief Financial Officer Timo Ihamuotila
Sector Telecommunications
Type Publicly Listed at Helinski, Frankfurt, NY Stock Exchanges.
Products Mobile Phones and Accessories, Mobile Computers, Networking
Components
Services Maps and Navigation, Music, Messaging, Software Solutions, etc.
Employees 101982
Subsidiaries Nokia Siemens Networks
Navteq

Financial Information Nokia
Revenue 30.176 billion Euros (as of 2012)
Operating Income -2.303 billion Euros (as of 2012)
Net Income -3.106 billion Euros (as of 2012)
Total Assets 29.949 billion Euros (as of 2012)

Interesting facts about the company-
1. Nokia started as a paper producing company.
2. Nokias first phone Mobira Senator weighed 10Kgs.
3. The first commercial GSM call was made using Nokia handset.
4. Nokia got its name from a town near river Nokianvirta in Finland.
5. Nokia was recognized as 5
th
most valued brand in world in year 2007.
6. Nokia was declared as Economic Times Most Trusted Brand in India 2010.
7. Nokia sold its one billionth phone a Nokia 1100 in Nigeria in year 2005.
8. Forbes 2011 declares Nokia as one of Worlds Most Sustainable company with 4
th
Rank.
9. It exceeded the sales of conventional camera manufacturer, selling largest number of cameras.
10. Nokia was awarded as best place to work in Central America and Caribbean by PwC in July 2011.
11. Currently Nokia is being headed by a former head of Microsoft Business division, Mr. Stephen
Elop.
12. In Finland, Nokia is the oldest company listed under the same name on the Helsinki Stock
Exchange (since 1915). Also listed in Frankfurt (since 1988) and the NYSE (since 1994).
13. Nokia's Indian subsidiary has been alleged for non-payment of TDS worth 3000 Crore Rupees
accrued in six years and transgressing transfer pricing norms in India.

PRATEEK SINGLA 2
A brief history about Nokia
Nokia was founded during the early industrialization of Finland, a small Nordic country that has
been ruled for centuries by its neighbours, Sweden and Russia. Over the past century and a half,
Nokia has been created, re-created, and restructured again and again. It was born amid Finlands
national awakening and has endured Russian oppression, a struggle for independence, the
Bolshevik Revolution in Russia. The Finnish company seemed to emerge from nowhere as an
industry leader. Newsweek once called it an overnight success. The reality, however, is more
complex. Nokias worldwide clout is barely a decade old, but the company itself was created
almost 150 years ago, in 1865 at Tampere, Finland. Below is the timeline story of Nokia
Corporation listing some of the companys major milestones/events in past years of its existence
in chronological order-
Year Story / Events
1865 In May 1865, Idestam received authorization to build his mill in Nokia, a small
town about ten miles to the west of Tampere located along river Nokianvirta,
Finlands then-industrial centre. Over time, the Nokia factory attracted a large
workforce and the town grew around it. That became the name and the foundation
for the future Nokia Corporation, which is now located in Espoo, a garden city just
a fteen-minute drive from the centre of Helsinki. While studying in Helsinki,
Fredrik Idestam had met Leo Mechelin, who later became Finlands rst
parliamentarian and played a crucial role in the struggle for independence. Nokias
two founding fathersIdestam, the businessman, and Mechelin, the politician
were among the leading young Leaders of a new Finnish generation.
Nokia saw following events this year-
The company started its operations as paper Production Company.
Company derived its name from name of the Town Nokia along the river
Nokianvirta.
Founded by Fredrik Idestam and Leo Mechelin.
1871 Nokia got its name as Nokia Ab.
1898 Finnish Rubber Works founded, later becomes Nokias Business.
1912 Finnish Cable Works founded Nokias Cable and Electronics Business.

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1915 Nokia transitioned from a family business to a public company,
much of the correspondence was conducted in German, the business
language of the era. Products were exported rst to Russia and then to
Great Britain and France.
1917 Russia was swept by the turmoil of the Bolshevik Revolution; The Finnish
parliament approved the declaration of independence. These tumultuous years
crushed many Finnish companies. Due to its increasing diversication and
internationalization, Nokia was not as vulnerable as most forestry rms.
1920s Nokias paper and pulp mill, the Finnish Cable Works, and the Finnish Rubber
Works sought leadership in their respective industries. Meanwhile, Nokias
corporate name became the joint foundation of all three companies.
1930s China also became an important trading partner. During the Second World War,
Finland fought against the Soviet Union and, eventually, Nazi Germany. Unlike
the tiny Baltic states, Finland managed to retain its independence, but with a heavy
price. The devastation reinforced the Finns legendary perseverance, but Nokias
vision had to change. It had to adapt to a new and very different future.
1940s After the Peace Treaty of Paris in 1948, Finland assumed a policy of neutrality and
nonalignment, dictated by its geopolitical location next to the mighty Soviet Union,
agreeing to pay the estimated $300 million war reparations to the Soviet Union.
Although Finland preserved its independence, it grew insulated internationally.
Fortunately,Nokia thrived inspite (and because) of the countrys overall insularity.
As Moscows court supplier, Nokias cable business became the cash cow of the
three-rm concern (i.e., cable, rubber, and paper and pulp).
1950s In the late 1950s, Finland opened its economy to Western Europe, that is, the
European Economic Community (EEC) and the European Free Trade Association
(EFTA). As the foundations for bilateral Finno-Soviet trade were laid down, a
substantial proportion of the Finnish economy adjusted to Moscows command
economy. Because of the delicate politico-economic balancing act with the Soviet
Union, the rst science and technology agreements with the United States were not
signed until the late 1980s.

PRATEEK SINGLA 4
Nokias business with Moscow was thriving. Westerlund had been in charge of its
cable business since 1956; as Nokias CEO, he grew skeptical ofNokias ability to
sustain growth based solely on these markets. When Soviet revenues amounted to
20 percent of Nokias total cable business, Westerlund warned the senior
management: We must be cautious and not allow the proportion of Soviet
business to grow too much ... If one day theyll say nyet in Kremlin, well lose our
business overnight.
1960 Finnish commercial ties with the Soviet Union and the other members of the
Council for Mutual Economic Assistance (Comecon) also deepened. Finnish Cable
Works already working closely with Nokia Ab and Finnish Rubber Works started
to branch out into electronics.
1962 Nokia made its first electronic device in-house: a pulse analyser for use in nuclear
power plants.
1963 Nokia started developing radio telephones for the army and emergency services
Nokias first foray into telecommunications. In that time, the companys
MikroMikko became the best known computer brand in Finland. Nokia began
importing computer systems by Elliot in the United Kingdom and Siemens in
Germany. The revenue base was tiny. To survive, Nokia had to internationalize.
1966 The parliamentary elections of 1966 marked a major turning point in Finnish
politics. The socialist parties gained their rst absolute majority in half a century.
Motivated by the fear of Americanmultinationals and faith in socialist planning, a
generation of new radicals began to promote the idea of a state-owned
electronics giant, Valco. While Silicon Valley was emerging as the entrepreneurial
hotbed in California, the Finns were moving in a diametrically opposite direction.
Still, the plan, which required the socialization of Nokia, was in trouble from the
beginning. It was driven by political posturing, not market opportunities. As the
notion of a high-tech national champion failed, Nokia took over the ruins of Valco
as well.
1967 The corporation took its current form as the Nokia Corporation. The new industrial
conglomerate operated in forestry, rubber, and cable, and it was entering

PRATEEK SINGLA 5
electronics. As Finns saw it, the name of the new company, Oy Nokia Ab, came
from wood processing, the management from the cable factory, and the money
from the rubber industry. Yet in only a quarter of a century, all of these segments
were divested. It was the most insignicant business of allelectronicsthat
would position Nokia for the future.
1977 Westerlund left his job in 1977, half of Nokias exports were to the Soviet Union
and half to the West. His successor, Kari H. Kairamo retained this balance, thus
saving the company from a catastrophe when the Soviet Union collapsed. He
renewed and internationalized
Nokias vision. In the early 1970s, exports and foreign activities accounted for only
20 percent of total sales; by 1980, their proportion increased to more than 50
percent of total sales, while revenues quadrupled.
CEO Kairamos prime objective was to transform Nokia into a European
technology concern. European industry, as well as the cost structure of products,
has become increasingly knowledge-based, he said. To us, internationalization
is not an alternative to something else. Finland has only two resources: the people
and the trees. In the past, Finland had been about natural resources and
comparative advantage. In the future, it would have to be about human capital and
competitive advantage. Export success, however, was predicated on Nokias
sustained ability to internationalize. That is the greatest risk facing the Finns,
Kairamo stated; the small amount of international business experience.
1980 To compete with the European national champions, Kairamo began
a frantic wave of merger and acquisition (M&A) activities, and despite
doubts, Nokia also pushed into consumer electronics in the 1980s. Nokia sets the
ball rolling in 1979, creating radio telephone company Mobira Oy as a joint venture
with leading Finnish TV maker Salora.
After Salora, the largest Finnish TV producer, it acquired Luxor AB,
Swedens faltering state-owned electronics and computer concern, which was
followed by the purchase of Oceanic. In 1988, Nokia also created the largest IT
group in Scandinavia, Nokia Data, by purchasing Ericsson Groups Data Division.

PRATEEK SINGLA 6
1981 Launch of the Nordic Mobile Telephone (NMT) service, the worlds first
international cellular network and the first to allow international roaming. The
NMT standard catches on fast and the mobile phone industry begins to expand
rapidly. In 1982, Nokia introduces the first car phone the Mobira Senator to the
network. That same year, the Nokia DX200, the companys first digital telephone
switch, goes into operation.
1984 Nokia launched the Mobira Talkman portable car phone. Resembling a military
field telephone, it was a fairly cumbersome piece of kit.
1987 Nokia introduced the Mobira Cityman, the first handheld mobile phone for NMT
networks. Despite weighing in at 800 grams and a price tag of 24,000 Finnish
Marks (around EUR 4,560), it goes on to become a classic. The Cityman even earns
a nickname, the Gorba, after Soviet leader Mikhail Gorbachev is pictured using
one to make a call from Helsinki to his communications minister in Moscow.
It was in 1987, GSM (Global System for Mobile communications) was adopted as
the European standard for digital mobile technology. With its high-quality voice
calls, international roaming and support for text messages, GSM ignited a global
mobile revolution.
1991 On July 1, 1991, Finnish Prime Minister Harri Holkeri made the worlds first GSM
call, using Nokia equipment.
After 1991, Finland got its rst nonsocialist government since 1966. In 1991, the
centrist-conservative government of Prime Minister Esko Aho (who became
Nokias chief of corporate relations in 2009) formulated an export-oriented
economic strategy to revitalize Finlands exports and industrial production.
1992 Nokia launched its first digital handheld GSM phone, the Nokia 1011.
That same year, new Nokia President and CEO Jorma Ollila makes a crucial
strategic decision: to focus exclusively on manufacturing mobile phones and
telecommunications systems. Nokias rubber, cable and consumer electronics
divisions are gradually sold off. As Ollila took
charge of Nokia, he had two priorities: restructuring operations and promoting a
culture of trust at Nokia. In August 1992, he was working on a presentation. He

PRATEEK SINGLA 7
quickly scribbled a title, Nokia 2000, and four headings that would become
famous:
Focus,Global, Telecom-oriented,High value-added.
1994 Nokia launched the 2100 series, the first phones to feature the Nokia Tune ringtone.
Based on Gran Vals, a classical guitar piece composed by Francisco Tarrega in the
19 century, it is probably one of the most frequently played pieces of music in the
world. The Nokia 2100 series goes on to sell 20 million phones worldwide. Nokias
target had been 400,000. This year also saw the worlds first satellite call, made
using a Nokia GSM handset.
1997 Nokia launched phone with addictive game Snake Bites. An instant classic
launched on Nokia 6110 and by 2010 its successors are available on an estimated
350 million mobile phones.
1998 The strategic decision started to focus on telecommunications, plus early
investment in GSM, has paid off. Between 1996 and 2001, Nokias turnover
increases almost fivefold from EUR 6.5 billion to EUR 31 billion.
With the new millennium comes a host of new possibilities as the internet goes
mobile
As the new millennium dawns, everything changes. New technology enables the
internet to go mobile, opening up a world of possibilities for mobile users. Phones
were no longer used just for phone calls...
1999 Nokia launched the Nokia 7110, a phone capable of rudimentary web-based
functions, including email.
2001 In November 2001 Nokia launches its first phone with a built-in camera, the Nokia
7650.
2002 In September 2002, it launched Nokia 3650, its first video capture enabled phone.
Nokia launched its first 3G phone (third generation), the Nokia 6650, in 2002. With
3G technology, phones can now be used to browse the web, download music,
watch TV on the move, and more.

PRATEEK SINGLA 8
2005 Nokia sells its billionth phone a Nokia 1100 in Nigeria, and global mobile
phone subscriptions pass 2 billion. Two years later, Nokia is recognised as the 5
th

most valued brand in the world.
2006 It was a Citibank banker, Ollila which made Nokia from what it was in 1992 to
what it was in 2006. When Ollila took the job of CEO in 1992, Nokia had some
27,000 employees, its net sales amounted to less than $3.5 billion, and it suffered
from a net loss of $140 million. When Ollila retired in 2006, Nokia had more than
68,000 employees and its net sales amounted to $54.3 billion, with a net prot of
$5.7 billion.
2010 Having dominated the mobile world for over a decade, Nokia no longer has things
all its own way. In the all-important smartphone market, competitors such as the
iPhone and Android-based devices now pose a serious challenge.
In September 2010, Nokia appointed Stephen Elop as President and CEO.
Formerly head of Microsofts business division, following roles at Juniper
Networks and Adobe Systems Inc., Elop has a strong
software background and proven record in change management.
2011 In February 2011, Nokia announced it is joining forces with Microsoft to
strengthen its position in the smartphone market. The strategic partnership sees
Nokia smartphones adopting the new Windows Phone 7 operating system, with the
Symbian platform gradually being sidelined. The goal is to establish a third
ecosystem to rival iOS and Android. Nokia launched its first Nokia with Windows
Phones, the Nokia Lumia 800 and the Nokia Lumia 710, in October 2011.
2013 Fast-forward to 2013 and Nokia has a full portfolio of great Windows Phone 8
smartphones, from the Lumia 520 through the flagship Lumia 920

Nokia was once selected as one of the worlds most sustainable technology companies on the Dow
Jones Sustainability World Index (DJSI World) and the Dow Jones Sustainability Europe Index
(DJSI Europe) for 2011. Nokia has now been included in DJSI World index (launched in 1999)
since 2000 and in DJSI Europe index (launched in 2001) from 2001 to 2005 and 2007 to 2011.

PRATEEK SINGLA 9
Nokias performance in the DJSI World 2011 review placed us among the top performing
companies. Nokia was able to reach the same overall score of 82 points out of 100 points in 2010
a fantastic achievement, given the current changes in business environment. The industry groups
average was just 51 points. The scores reflect the companys performance across economic,
environmental and social criteria.
In 2011, Superbrands the worlds leading independent arbiter of brands conducted a survey to
find the top 50 consumer brands in China. It was the largest ever survey of its kind in China and
Nokia came out on top.
Nokia was recognised as the best place to work in Central America and the Caribbean for its great
culture and work environment. The decision was based on research conducted by Mexican firm
Top Companies and Price Waterhouse Coopers.

PRATEEK SINGLA 10
Vision and Strategy

Nokias mission is simple: Connecting People.
The goal is to build great mobile products that enable billions of people worldwide to enjoy more
of what life has to offer.
Challenges : Moving with rapidly changing times
The challenge is to achieve this in an increasingly dynamic and competitive environment. Ideas.
Energy. Excitement. Opportunities. In today's mobile world, it feels like anything is possible - and
that's what inspires us to get out of bed every day.
From Rio de Janeiro to Nairobi, Berlin to Mumbai, mobile technology is changing our world. How
can we make the most of the opportunities in our everyday lives? How can we keep a sense of
identity as societies, economies and governments change all around us?
Key elements of Nokia s current strategy
1. Build a new winning mobile ecosystem in partnership with Microsoft.
2. Bring the next billion online in developing growth markets.
3. Invest in next-generation disruptive technologies.
4. Increase our focus on speed, results and accountability.
Partnering with Microsoft
To help us achieve the mission, Nokia has formed a strategic partnership with Microsoft that will
help Nokia regain lost ground in the smartphone market. Together, they intend to build a global
ecosystem that surpasses anything currently in existence. The Nokia-Microsoft ecosystem will
deliver differentiated and innovative products with unrivalled scale in terms of product breadth,
geographical reach and brand identity.
The Nokia-Microsoft partnership brings together two global businesses with highly
complementary sets of assets and competencies. But what will it actually mean for Nokia
smartphone products?

PRATEEK SINGLA 11
First and foremost, Nokia is adopting Windows Phone as its primary smartphone platform.
Working with Microsoft, will help to drive and define the future of the platform by leveraging our
expertise in hardware optimisation, software customisation, and language support.
Nokia and Microsoft are also combining services assets to drive innovation. Nokia Maps, for
example, will soon be at the heart of key Microsoft assets such as Bing and AdCenter, and Nokias
application and content store will be integrated into Microsoft Marketplace. Similarly, Microsoft
will provide developer tools, making it easier for application developers to leverage Nokias global
scale.
Connecting the next billion
In feature phones, Nokias strategy is to leverage its innovation and strength in growth markets to
connect even more people to their first internet and application experience. By providing
compelling, affordable and localised mobile experiences, particularly to emerging markets, the
ambition is to bring the next billion online.
Nokia continues to revive the Series 40 platform in QWERTY, touch & type, dual SIM, Nokia
services, including Maps, Browser, Life Tools, Web apps and Money. They are also investing in
the future, developing assets (platform, software, apps), which will bring a modern mobile
experience to consumers and enable business opportunities for developers.

PRATEEK SINGLA 12
Organisation Structure
Employment Generation
Nokia Group employed approximately 98,000 people around the world. In 2012, the Devices &
Services and HERE businesses together employed approximately 40,000 people from over a
hundred different nationalities and approximately 40% of them were women.
Such a diverse culture helped Nokia gain its position globally. Employing people from diverse
backgrounds gave them invaluable insights to their diverse customer bases. A mix of cultures,
genders, age groups, beliefs, interests and opinions in the workplace helps foster debate,
discussion, ideas and innovation.
Creativity, empowerment, openness, collaboration, and consideration for people and the
environment these are all integral to the way we do business.
Corporate Structure

PRATEEK SINGLA 13
Nokia is a global leader in mobile communications whose products have become an integral part
of the lives of people around the world. Every day, more than 1.3 billion people use their Nokia to
capture and share experiences, access information, find their way or simply to speak to one another.
Nokias technological and design innovations have made its brand one of the most recognized in
the world.
Nokia, currently has its operations mainly under four heads of organizations, these are
1. Smart Devices
2. Mobile Phones
3. HERE
4. Nokia Siemens Network
Smart Devices
Smart Devices division manages and plans out strategy for production, sales and distribution of
Smart Phones. The current strategy is to tie up with Microsoft to produce more and more Winodws
based Mobile. Nokia has introduced its first Windows based mobile in late 2011. This series of
smart phones have been named Lumia. And currently Nokia plans to use Windows as primary
Smartphone platform for future releases as well.
Mobile Phones
Mobile Phones team manages all other phones except Windows based Smartphone. This team uses
more than 150 years of companys experience to innovate and strengthen the modern and
affordable mobile experience.
HERE
Here is the latest in entries of business being operated by Nokia. It provides its customer location
based products and services as well as content and platform services to device manufacturer. It
was formed in year 2011 followed by acquisition of NAVTEQ in 2008. Major services include
HERE Drive, HERE Maps and HERE Transit

PRATEEK SINGLA 14
Nokia Siemens Network
It is a jointly owned venture of Nokia and Siemens Corporation and one of the leading global
providers of Telecommunication infrastructure, hardware and software. Its major manufacturing
sites are located in Chennai in India, Oulu in Finland and Berlin in Germany.
Nokia is worlds second largest mobile phone maker after Samsung with global market share of
22.5% in year 2012. However, because of close competition with Googles Android Nokia has
suffered major loses in past 2-3 years. The company is currently taking restructuring measures by
divestment and cutting jobs. Nokia plans to cut 10,000 jobs globally by 2013 and shut down its
production sites in Finland, Germany and Canada. In June 2012, Moodys rating agency
downgraded Nokia to junk. Nine quarters prior to second quarter of 2013, Nokia has sustained an
operating loss of 4.1 billion Euros. Nokias handset revenue losses are lowest since 2002 these
days. Problem is worst in China and U.S.

PRATEEK SINGLA 15
Production Facilities

Nokia has production facilities located all over the world and is working to make each one as
sustainable as possible. In part, this means minimising any negative environmental and social
impact the facility may have - for example, by reducing its energy consumption or ensuring
materials are ethically sourced. But it also means maximising the positive impact of Nokias
presence can have on the local community - from providing rewarding employment opportunities
to supporting worthy causes, such as schools or hospitals.
1. Brazil Manaus
Established: 1998
A great place to work
Chosen as one of the best places to work in Brazil in 2009 by Exame-Voce S/A guide,
Nokia Manaus also established the Nokia Foundation. This wholly funded technical high
school with 450 students is Nokias largest corporate responsibility investment globally.
Manaus has a strong sustainability ethos, using eco materials developed locally at INdT
to replace plastics in products and packaging.

2. China Beijing
Established: 1995
Leaner, greener operations
Responsible for Smartphone and feature-rich phone production, Nokias Beijing facility
shows how good design can enhance sustainability. In 2000, Nokia moved into the
purpose-built XingWang industrial park, which clusters Nokia with several key suppliers.
This helps reduce transportation costs, and offers significant savings on energy and
emissions.

3. China Dongguan
Established: 1995
Quality and quantity
Nokias Dongguan facility produces almost a third of Nokias entire mobile phone output

PRATEEK SINGLA 16
yet theres no compromise on quality. In fact, Dongguan is a five-time winner of the
Nokia Global Quality Award - a credit to everyone who works there. To help maintain
these high standards, Dongguan provides internships to graduate students each year in
collaboration with the local university.

4. Hungary Komrom
Established: 1999
Making a difference
Boasting a workforce thats around 70% female, Nokia plays a valued role in and around
Komrom. Nokia supports the local hospital, fire department and schools, and Nokia
employees help Komrom students learn English. Nokia also funded a bypass road to the
Nokia site, helping relieve traffic congestion and lower emissions in the area.

5. India Chennai
Established: 2006
And the winner is...
Not only is Nokia Chennai one of the biggest facilities, its also big on sustainability. In
2010 it received the Golden Peacock Award for its high standards of environment
management. And its highly active in the community with projects ranging from a local
library programme to village regeneration projects.

6. Mexico Reynosa
Established: 1996
Community minded
Theres a strong sense of community at Nokia Reynosa. Around 98% of the workforce
comes from the area and the facility actively supports the local university, schools,
orphanages and shelters. Situated just a few miles from the US border, Reynosa delivers
Smartphone to North, Central and South America.

7. South Korea Masan
Established: 1984

PRATEEK SINGLA 17
World class technology
These are exciting times for Nokias Smartphone manufacturing team at Masan. A new
state of the art facility, opening in 2012, promises to be more productive and more
sustainable, and a more enjoyable place to work. Good news for the local community,
which already supplies almost 99% of workforce, 68% of whom are women.

8. Vietnam Hanoi
Established: 2013
Watch this space
Construction is beginning on a new Nokia facility at Vietnam.

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Market Segmentation

Nokia classifies target market in three main segments-
1. First
2. Feature
3. Smart
First
First covers very affordable products such as the Nokia 101, a dual SIM music phone which costs
about EUR 25, excluding taxes and subsidies. During the beginning of 2013, Nokia has also
introduced the Nokia 105, the most affordable mobile phone in the range, offering a bright colour
screen, FM radio, long battery life and available in different colours for EUR 15, excluding taxes
and subsidies. The target consumer for First products is someone seeking their first mobile
experience, an ability to use their phone as a music player, a durable and robust product, good
battery life and for whom price is a critical factor. Almost 90% of the worlds population lives
within range of a mobile signal, but there are many people who do not yet own a mobile device.
Feature
Feature covers products, such as the Nokia 206, which costs approximately EUR 46, excluding
taxes and subsidies. The target consumer for Feature products is someone seeking a product that
offers good quality staple features, good battery life and easy and affordable access to the Internet,
particularly to Facebook and Twitter. Latest products in this segment uses a powerful new cloud-
enabled browser which compresses data and can thus reduce the cost and increase the speed of
browsing the web, giving peace of mind to consumers who do not wish to purchase a data plan or
exceed the limit on their data plan. Many people buying Feature products are using them to access
the Internet for the first time. Additionally, they are seeking a product that is durable and robust
and which brings them the benefit of Nokias expertise and technologies in call quality, reception
and data connectivity.
Smart

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Smart covers products such as the Nokia Asha 311, a smartphone with a full touch, capacitive
display, a fluid swipe user interface, a power processor, 3.2 megapixel camera and which costs
EUR 92, excluding taxes and subsidies. The target consumer for Smart products is someone
seeking an affordable smartphone whose hardware, software and services are optimized forand
not compromised bylow price points. Smart products, besides being very functional, also offer
some distinctive and stylish designs that share similarities to those in our Lumia portfolio of
smartphones.
Nokia has a large distribution network, with hundreds of thousands of points of sale globally
alongside our own online retailing presence. Nokia have a significant distribution and care
network, particularly in China, India, and the Middle East and Africa.
Net sale of mobile devices is derived primarily from sales to mobile network operators,
distributors, independent retailers, corporate customers and consumers. However, the total device
volume that goes through each channel varies by region. In 2012, sales in North America and Latin
America were predominantly to operator customers, sales in Asia-Pacific, China and Middle East
and Africa were predominantly to distributors, and sales in Europe were more evenly distributed
between operators and distributors. Nokias marketing activities play a fundamental role in our
effort to bring people great mobile products. The activities are designed to create loyalty, enhance
the Nokia brand and drive more sales. In our marketing, we focus on expanding awareness of the
key points of differentiation in our products and services, such as the imaging capabilities of our
high-end smartphones or the robust quality of our most affordable feature phones. Nokia continued
to expand the digital marketing efforts, including engaging consumers through our own social
media channels, including Nokia Conversations, which is among the most popular company blogs.
We are among the top brands in the world according to the Interbrand annual rating of 2012 Best
Global Brands.

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Corporate Social Responsibility
Education
Mobile technology can provide access to quality education materials and support to teachers,
learners and their families, and mobile communication enables the delivery of education to people,
instead of people to education. In that sense, mobile learning initiatives help in improving equality
in educational achievement, as girls tend to be disadvantaged in school attendance in many parts
of the world. The cost of providing good quality learning content can also be reduced and the
teaching environment can be transformed into a more collaborative and motivating environment
with mobile technology. Furthermore, concepts such as our Nokia Life subscription-based service
also show the potential of affordable education delivery to people on a large scale. We currently
offer Nokia Life in China, India, Indonesia, Kenya and Nigeria, and by late 2012, approximately
90 million people had experienced the service, more than double the number from a year earlier.
Health
Nokia Data Gathering contributes to health as one of its many uses. It is an open source platform
which allows any organization to collect data via mobile phones, and it has been used for example
in preventing and controlling disease outbreaks. Our Nokia Life service disseminates useful
information and advice on pregnancy and maternal health, childcare and parenting skills, and
family health in general.
Livelihoods
Nokia Data Gathering software replaces traditional data collection methods with mobile devices,
improving results and saving time and money. The open source model allows to offer the software
on a large scale, providing clients with flexibility and supporting the creation of livelihoods for
systems integrators and developers. Almost 300 organizations use Nokia Data Gathering, making
it one of the most used mobile data collection solutions globally. Examples of its successful use
include the mapping of water points in Kenya by UN FAO, resulting in a faster reaction to drought
in East Africa.

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Awards and Accolades
Nokia scores top marks on Corporate Equality Index 2013
Nokia has achieved a 100% rating in the Human Rights Campaigns (HRC) 2013 Corporate
Equality Index, which rates workplaces on lesbian, gay, bisexual and transgender (LGBT)
equality.
The rating is a significant boost from the 2012 Index, when Nokia received a score of 70%.
The Corporate Equality Index is a national benchmarking tool in the United States, which looks at
corporate policies and practices which affect LGBT employees. All companies making a 100%
rating, such as Nokia, are recognised on HRCs Best Places to Work list.
Nokia named as one of world s most sustai nable technology companies
Nokia was once again selected as one of the worlds most sustainable technology companies on
the Dow Jones Sustainability World Index (DJSI World) and the Dow Jones Sustainability Europe
Index (DJSI Europe) for 2011. Nokia has now been included in DJSI World index (launched in
1999) since 2000 and in DJSI Europe index (launched in 2001) from 2001 to 2005 and 2007 to
2011.
Overall, our performance in the DJSI World 2011 review placed us among the top performing
companies. We were able to reach the same overall score of 82 points out of 100 points as in 2010
a fantastic achievement, given the changes in our business environment. The industry groups
average was just 51 points. The scores reflect the companys performance across economic,
environmental and social criteria.
Superbrands declares Noki a the leading brand in China
In 2011, Superbrands the worlds leading independent arbiter of brands conducted a survey to
find the top 50 consumer brands in China. It was the largest ever survey of its kind in China and
Nokia came out on top.
The Superbrands 2011 China ranking surveyed over 2,000 consumer brand preferences across 150
product categories. Nokias performance across a range of criteria - including strong market

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dominance, longevity, goodwill, customer loyalty and overall market acceptance - contributed to
the number one spot.
Our number one brand ranking is a wonderful vote of confidence in everything that weve been
doing in China, said Colin Giles, Nokia Executive Vice President, Sales. China is our largest
market and plays an important role in our global innovation. As we pursue our new strategy and
introduce our new Nokia with Windows Phone, our brand in China, and the trust and emotional
connection this represents among Chinese consumers, will give us the edge we need to stay ahead.
Nokia The best place to work
In July 2011, Nokia was recognised as the best place to work in Central America and the Caribbean
for its great culture and work environment. The decision was based on research conducted by
Mexican firm Top Companies and Price Waterhouse Coopers. The research started back in April
2011, and 60 companies from the region were evaluated. The winners were announced during the
awards event in El Salvador, where Nokia got first place in the multinational companies with local
presence category.
We have a team that works very well together, and they feel empowered to face challenges and
are willing to do their best to exceed expectations. This is how we fulfill our mission of connecting
people to what matters most to them, impacting positively on our environment, the wider
environment and the end consumer, said Martin Chirotarrab, General Manager for Nokia
Caricam, who received the award.
Other Awards
2011 Forbes Top 10 Worlds Most Sustainable Companies (#4)
Universums Top 50 Worlds Most Attractive Employers for Students 2011
NASSCOMs Excellence in Gender Inclusivity in India 2010
2010 Bloomberg Business Week Top 25 Most Innovative Companies
Top 50 Macleans Socially Responsible Companies in Canada 2010
Economic Times Most Trusted Brand in India 2010 (#1)

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Financial Statements
Balance Sheet

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Income Statement

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Cash Flow Statement

Income Graph
Balance Sheet Graph Cash Flow Graph

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Latest News About Nokia
Nokia Tax Battle (22/7/2013)
The Rs 2,000-crore Nokia Tax issue might be heading for a diplomatic solution, with the
government readying for an out-of-court settlement. It is considering the idea of imposing a penalty
on Nokia, rather than asking it to pay up pending taxes it supposedly owes here.
The company was also accused of flouting transfer-pricing rules by the I-T department but the
penalty estimates have not yet been notified. Nevertheless, the total amount Nokia India could be
asked to pay up if both parties do not arrive at a solution could be around Rs 12,000 crore,
according to another official who did not wish to be named.
Nokia sales miss estimates(19/7/2013)
Nokia Oyj, the Finnish mobile-phone maker attempting a comeback, reported revenue that missed
analysts' estimates as intensifying competition across the market cut the number of handsets sold
by 27 per cent.

Second-quarter sales fell 24 per cent to Euro 5.7 billion ($7.5 billion), Espoo, Finland-based Nokia
said on Thursday. Analysts projected Euro 6.4 billion, the average of estimates compiled by
Bloomberg. While sales of the Lumia smartphone line rose to 7.4 million units, demand for older
and more basic phones fell.
S&P cuts Nokia rating further on Siemens venture buyout(6/7/2013)
Standard & Poor's downgraded Nokia further into junk territory on Friday, warning that the Finnish
telecom firm's plan to take over Siemens AG's stake in their joint network equipment venture
would strain its finances. S&P downgraded the one-time tech darling by one notch to B+ from BB-
citing pressure on its net cash after Nokia said on Monday it would buy Siemens's 50 per cent
share in Nokia Siemens Networks.

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70% of Nokia Chennai handsets parti ally comply with new SAR norms:
DoT(5/7/2013)
About 70 per cent of the handsets manufactured at Nokias Chennai factory are "in partial
compliance" with the new specific absorption rate (SAR) standards, according to an inspection
report by the Department of Telecommunications (DoT) dated June 25.

The deadline for mobile phone makers to comply with the revisedSAR standards is August 31,
2013.
Nokia buys out Siemens in equipment JV for $2. 2 bn(1/7/2013)
Nokia Oyj agreed to buy Siemens AGs share in a six-year venture for euro 1.7 billion ($2.2
billion), giving the Finnish company full access to the phone-equipment makers cashflow for a
less-than-estimated price.

Nokia will pay euro 1.2 billion for Siemenss 50 per cent stake in Nokia Siemens Networks, with
the remainder as a secured loan from Siemens due a year after the deal is completed, the companies
said on Monday. Nokia doesnt plan to integrate Nokia Siemens and may still decide to seek
partners, Chief Executive Officer Stephen Elop said on a conference call.
Nokia ties up with New India Assurance(11/6/2013)
Mobile handset maker Nokia India has tied up with public insurer New India Assurance for
extending insurance cover for its entire range of phones starting from entry level to high-end
smartphones.

"We have tied up New India Assurance for providing insurance cover for the entire range of Nokia
handsets. Initially, the scheme will start in West Bengal and then be rolled out in other parts of the
country," Kislay Kumar, general manager (East) of Nokia told reporters here today. Kumar said
the cost of the insurance cover would be 1.25 per cent of the handset cost, or Rs 50, whichever
was higher.

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Determinants of demand for Nokia Cell Phones
1. Price of the Phone
Price of mobile phones plays a major role in deciding its target customers, and their
corresponding demand. All things remaining same, if a phone is launched at lower price
its demand will be more, as compared to a phone launched at higher price.

2. Availability of substitutes
If people will feel that a particular phone with given features is offered at lower prices than
Nokia, it will lose the market share the closest available cheap substitute. For example,
phones from China were competing with Nokia phones in terms of sales when Chinese
phones were release in Indian market. Below the graph shows the trend of market share of
Mobile Operating system being used world wide.

3. Income of target customer
Income has a great effect on demand for a particular product. A company should make its
product so that it is able to cater to large Income groups. Nokia has followed similar
philosophy by introducing a large range of products with varying price ranges and still

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producing feature packed mobiles. For example, these days Nokia is focusing on Asha
series for small income groups and it is focusing on Lumia series for large income groups.

4. Youth Demographic
Most of the young people are gadgets and mobiles enthusiast, they like to change their
phone after every six months. Majority of high end phones of Nokia are being sold to
Young working people. Youth demographics plays an important role in determining the
demand of a technology product like Nokia Cell Phones.

5. Product Features
With increase in consumer awareness, people are becoming even more informed about the
features of product and their corresponding price in market. In case of phones, some people
like to buy a phone as one time big investment, so they look for features and go for buying
the phone which is more feature packed and will not become obsolete in near future.

6. Product Innovation
Innovation is a continuous process which brings in new products to market. To prevent
someone else from entering into and capturing your market constant innovation is a key to
success. Nokia used innovation in creating mobile devices which were cheap and had
camera fitted in them with recording function. This allowed them to capture the buyers
who were looking for a camera as well as a mobile phone.

7. Perception of Masses
Product perception plays a major role in determining the demand of a product. If a product
is perceived as a quality product with high durability it gets media attention as well as the
demand increases. However, if a product gives a negative message to people its demand
would decrease no matter how cheap or a good quality product it is. Because of this reason
only some of the competitors of Nokia like Karbonn Mobiles, Fly Mobiles, etc. are not able
to capture th market share.

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8. Brand Name
Brand name is not built in a day, it takes years to build brand name
providing best quality products and best customer support. If a
product is associated with good brand name people tend to have
greater trust on it. Same is applicable for Nokia phones. Nokia was
an early entry to Mobile phone manufacturing sector and created a
brand name in past years by providing best services and quality mobile sets to their
customers. Hence, some of the customers are still loyal to the brand and recommend their
relatives and friends to buy a Nokia phone.

9. Established Market Share
Already established market share also plays a major role in determining the demand as
people tend to buy those items which their friends have bought and tested. Nokia phones
are having good market share and it is enjoying the advantage of word of mouth publicity
these days. Info graphic on right shows the market share of various Mobile phones in India.

10. Portability of a mobile handset
When it comes to mobile, its portability plays a major role in deciding the demand. The
more slim or portable a mobile is, more is its demand.

11. Safety Concerns
People like to know about various concerns of safety while buying a consumer electronic
product as some of the past incidents indicate that there were explosions caused by Nokia
mobile battries. Nokia then recalled all the phones with BL-5C battery to replace them and
maintain the quality standards.

12. Durability of Phone
With phones it happens a lot, because of rough handling they get damaged. But Nokia
produces some of the very durable phones which can run under extreme conditions of
temperature, environment and other external factors. Nokias most sold phone in India

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Nokia 1100 is still in demand, even after going out of production, because of its durability.
List on next page shows American Customer Satisfaction Index in terms of durabilit y of
product over past 9 years.

13. Dual Sim
These days people have separate GSM SIM modules for Work and Personal use. So,
people prefer buying Dual Sim phone over single SIM phone with similar product features.

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Demand Forecasting
What is Demand Forecasting?
Demand forecasting seeks to investigate and measure the forces that determine sales for existing
and new products. Generally companies plan their business production or sales in anticipation
of future demand. Hence forecasting future demand becomes important. The art of successful
business lies in avoiding or minimizing the risks involved as far as possible and face the
uncertainties in a most befitting manner.
Broadly speaking, there are two approaches to demand forecasting- one is to obtain information
about the likely purchase behaviour of the buyer through collecting experts opinion or by
conducting interviews with consumers (also known as Qualitative Method), the other is to use
past experience as a guide through a set of statistical techniques. Both these methods rely on
varying degrees of judgment (also known as quantitative method). The first method is usually
found suitable for short-term forecasting, the latter for long-term forecasting.

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Methods of Demand
Forecasting
Qualitative
Consumer
Opinion
Salesforce
composite
Expert
Opinion
Delphi
Method
Market
Simulation
Test
Marketing
Quantitative
Trend
Method
Cyclic
Secular
Seasonal
Random/Irregular
Regression
Analysis

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Consumer opinion survey
The form used to obtain consumer opinion is available live at http://goo.gl/WJOUxI
Method and Approach of Survey
This consumer opinion survey was made online using Google Form builder. The survey covered
people from diverse background in terms of gender, education, annual income, age etc. The
purpose of conducting the survey on diverse audience was to stimulate the actual market condition
in a small sample of records. The survey included satisfaction levels of customer on scale of 5 to
measure, which particular things affect the most in consumer decisions about purchasing a new
mobile.
Survey Findings and Results
Consumer opinion method being qualitative in nature, can only be used to estimate the demand
subjectively. Consumer opinion helps in estimating the established demand of the product as well
as expected demand in coming years, some of the major findings for consumer opinion done for
Nokia are listed as below using various figures and tables.
Summary of Responses
Following data gives a cumulative insight to profile of people surveyed, what were their responses
to various questions as put up in survey.

Profile of People Surveyed

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Feedback about Nokia Mobiles

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Analysis / Results
From above survey, following inferences about consumer behaviour me be drawn-
1. Consumer Preferences
Most of the consumer, 35% in this case come to dealer unaware about the phone model to
be bought, its the dealer who tells them about which model would better suit their
requirements as per the price range. After dealer, its the internet which guides people in
buying out new phone, people check out the feature of phones and then make an informed
decision by taking feedback from their friends.

2. Price of Phone
Nokia phones comes at competitive pricing, it is evident from the fact that more than 90%
of people surveyed, believed that price of the phone they purchased was either Neutral,
Good or Very Good. Demand of phones will increase as feature packed phone becomes
available at low prices.

3. Application Support
Nokia needs to allow greater level of application support as only 39% of people surveyed
believed that application support is good or very good.

4. Durability of Body
Durability of Nokia mobiles is certainly a unique selling point. All respondents rated
durability as either Neutral, Good or Very Good.

5. Voice Quality
Nokia also excels in providing best voice quality in their handsets. Only 3% of people felt
that voice quality was either Poor or Very Poor.

6. Camera Quality
Some handsets of Nokia comes with good camera quality, some come with average and
some come with poor camera quality, so is evident from the survey.

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7. Phone Speed
As per majority of people, phone speed was more or less satisfactory. Not so fast, not so
slow, there is a scope of improvement in this field. Demand will be increased if there is an
increase in speed of handsets in terms of response time.

8. Music Sound Quality
About 80% of people rate the quality of music as Neutral, Good or Very Good. This
can be further improved by providing better quality phone speakers.

9. Charger Availability
Nokia charger are readily available all over the world, it provides flexibility to travel users.
If similar charger pin is used in every phone, this will help increase in demand of Nokia
phones particularly.

10. Display
About 10% people are unsatisfied with display. This can be improved by providing users
with latest display technologies like Super LCD, OLED, etc.

11. User Interface
Nokia comes with one of the best user interface, which is easy to understand for anyone.
However, still around 10% are unsatisfied with User Interface. This can be further
improved by providing help tips to new or first time users of mobile.

12. Over-all Experience
90% of people have shared that they were satisfied by their purchase of Nokia product, and they
would recommend it to their friends and relatives. However, to capture the full.

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Trend Analysis using Linear Regression
Historical Data
Demand forecasting by its very nature uses historical data to forecast future demand of the product.
Historical data includes net sales data for that particular product. Historical data can be obtained
from companys quarterly or annual reports. In this case, quarterly net sales data is considered for
estimating the demand.
Regression Analysis
Regression analysis applies to almost any field. In general, regression analysis identifies
relationships based on independent and dependent variables. For example, a dependent variable is
your product's sales and an independent variable may be time. Governments and businesses use
regression analysis as a predictive tool for forecasting purposes. Regression analysis measures the
strength or correlation between the dependent and independent variables. For the uninitiated,
regression analysis may become complex particularly with the addition of multiple independent
and dependent variables, requiring sophisticated programs and analysis. In this case, regression
analysis have been done using Microsoft Excel.
Forecasting
Demand forecasting using historical data is tricky business. Past performance is not necessarily a
good indicator of future performance. In other words, you shouldn't forecast more than 10 percent
in sales growth in the next period because your company's sales grew more than 10 percent in three
prior periods. This is where regression analysis comes in. By identifying the relationship between
the dependent variable or your company's sales with independent variables, you may gain a better
insight as to the factors that determine your company's sales growth. Generally speaking, the
predictive power of regression analysis improves the longer the time period used to build your
forecast.
Insight
Using historical data and regression analysis has its limitations in business forecasting. For
example, a significant correlation between the independent and dependent variable does not
necessarily indicate a cause and effect relationship. In some cases, the common linkage may be
because of a sequence of events.

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For predicting the demand of Nokia mobile phones, past quarterly net sales data from year 2002
is considered in this case. The net sales data and regression analysis is being shown in next few
pages.
Raw Data from Quarterly Reports
Quarter Net Sales (in Million Euros)
Q1 - 2002 7014
Q2 - 2002 6935
Q3 - 2002 7224
Q4 - 2002 8843
Q1 - 2003 6773
Q2 - 2003 7019
Q3 - 2003 6874
Q4 - 2003 8789
Q1 - 2004 6348
Q2 - 2004 6463
Q3 - 2004 6939
Q4 - 2004 9456
Q1 - 2005 7396
Q2 - 2005 8059
Q3 - 2005 8403
Q4 - 2005 10333
Q1 - 2006 9507
Q2 - 2006 9813
Q3 - 2006 10100
Q4 - 2006 11701
Q1 - 2007 9856
Q2 -2007 12587
Q3 - 2007 12898
Q4 - 2007 15717
Q1 - 2008 12663
Q2 - 2008 13151
Q3 - 2008 12237
Q4 - 2008 12665
Q1 - 2009 9276
Q2 - 2009 9913
Q3 - 2009 9810
Q4 - 2009 11988
Q1 - 2010 9522
Q2 - 2010 10005

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Q3 - 2010 10270
Q4 - 2010 12653
Q1 - 2011 10400
Q2 - 2011 9275
Q3 - 2011 8980
Q4 - 2011 10005
Q1 - 2012 7354
Q2 - 2012 7542
Q3 - 2012 7239
Q4 - 2012 8041
Q1 - 2013 5842
Q2 - 2013 5695

Graphical plot

Regression Analysis Results
Regression analysis on above data gave following results-
Linear Equation for demand forecast y = 33.807 x + 8544.1
y = 33.807x + 8544.1
R = 0.0385
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
Net Sales (in Million Euros)

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Prediction of Demand -
x = 48 (for Q3, 2013) => y = 10166.8
x = 49 (for Q4, 2013) => y = 10200.6
x = 50 (for Q1, 2014) => y = 10234.5
x = 51 (for Q2, 2014) => y = 10268.3

x = 52 (for Q3, 2014) => y = 10302.6
x = 53 (for Q4, 2014) => y = 10335.8

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Cost Analysis
What is Cost Function?
To understand how costs and revenues interact to determine economic profits or losses,
economists like to break up a firms total costs into two subcategories: fixed costs and variable
costs.
Fixed costs are costs that have to be paid even if the firm isnt producing anything. For example,
after a rent contract is signed for the firms headquarters, that rent must be paid whether the firm
produces anything or not. Similarly, if the firm has taken out a loan, its legally required to make
its debt payments whether producing zero units of output or a billion units of output.
Variable costs are costs that vary with the amount of output produced. For example, if you are
in the lemonade-making business and you choose to produce nothing, you obviously dont have
to buy any lemons. But the more lemonade you do produce, the more you spend buying lemons.
Similarly, producing more lemonade requires more workers, so your labour costs also vary with
the amount of output you produce.
Fixed costs can be represented as FC and variable costs as VC. Together, they sum up to a firms
total costs, or TC:
TC = FC + VC
FC Fixed cost
VC Variable cost = Variable Cost Per Unit X Quantity produced
Various other associated costs are
1. Average Fixed Cost (AFC)
2. Average Variable Cost (AVC)
3. Average Total Cost (ATC)
4. Marginal Cost (MC)
Various relationships of above costs are as listed below-

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Total Cost = Fixed Costs (FC) + Variable Costs (VC)
Marginal Cost (MC) = dC/dQ; MC equals the slope of the total cost function and of
the variable cost function
Average Total Cost (ATC) = Total Cost/Q
Average Fixed Cost (AFC) = FC/Q
Average Variable Cost = VC/Q.
ATC = AFC + AVC
The MC curve is related to the shape of the ATC and AVC curves:
At a level of Q at which the MC curve is above the average total cost or average
variable cost curve, the latter curve is rising.
If MC is below average total cost or average variable cost, then the latter curve is
falling.
If MC equals average total cost, then average total cost is at its minimum value.
If MC equals average variable cost, then average variable cost is at its minimum
value.
A graphical representation of above costs can be shown as below-

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Cost function for Nokia
Total Cost and Quantity relationship for Nokia over the years is as given below-
Year Quantity Sold (in Millions) Total Cost (in EUR Million)
2002 405 18278
2003 471 17237
2004 643 18133
2005 795 22209
2006 978 23670
2007 1140 33781
2008 1210 33337
2009 1140 27720
2010 1036 29629
2011 969 27340
2012 740 21786

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It can be seen from above graph that total cost varies as given by following relation-
TC = 7503.4 + 20.004 Q
So, it can be inferred that 7503.4 Million Euros is companys fixed cost. While, 20.004 Euro
Million is cost per millions of units produced.
Other costs involved in Production are as listed below-
Year Cost of Sales R & D Expenses Selling and Administrative Expenses
2001 19787 2985 3523
2002 18278 3052 3239
2003 17237 3760 3363
2004 18179 3733 3157
2005 22209 3825 3770
2006 27742 3897 3980
2007 33781 5636 5544
2008 33337 5968 5664
2009 27720 5909 5078
2010 29456 5844 4895
2011 27300 5584 4854
2012 21786 4782 4164
18278
17237
18133
22209
23670
33781
33337
27720
29629
27340
21786
y = 20.004x + 7503.4
0
5000
10000
15000
20000
25000
30000
35000
40000
0 200 400 600 800 1000 1200 1400
C
o
s
t
Quantity
Total Cost (in EUR Million)

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Production Function Analysis
A production function shows the relationship between inputs of capital and labour and other factors
and the outputs of goods and services. The simplest possible production function is a linear
production function with one independent variable alone as an input.
However, in real life production function generally involves more than one factor of production,
therefore, multifactor production function is used to relate independent variables like labour and
capital with net profits of an organisation.
A general form of multifactor production function is-
P(Y,K) = K Y
a
K
b
Both capital and labour show diminishing returns to increasing any single factor of production, but
they may show (and do in this example) constant returns to scale . That is, if you double both
capital and labour you will double output. This does not contradict the law of diminishing
returns, which applies only to increasing a single factor of production.
When we increase all factors of production, we speak of a change in the scale of operations, and
we may have:
Increasing returns to scale
If the exponents a and b on capital and labour add up to more than one
Constant returns to scale
If the exponents a and b add up to exactly one
Diminishing returns to scale
If the exponents a and b add up to less than one

In this case, multifactor production function is being derived for Nokia.

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Above graph shows variation of various factors of production with respect to time. This
can be tabulated as below-
Year Gross Profit Labour Cost Total Equity
2012 8390 959 9447
2011 11359 1085 13916
2010 12817 1115 16231
2009 13264 1145 14749
2008 17373 1284 16510
2007 17277 1164 17338
2006 13379 666 12060
2005 11982 609 12514
2004 11134 604 14238
2003 12218 630 15148
2002 11640 701 14281

0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
2000 2002 2004 2006 2008 2010 2012 2014
Variable Variation w.r.t. Time
Gross Profit Labour Cost Total Equity

PRATEEK SINGLA 54
Production function can be defined as
Output = f(K,Y), where K is the employee cost and Y is the capital cost.
P = A.K

where , are the constants. A is the technological parameter, is the elasticity of output with
respect to capital and is the elasticity of output with respect to employee. To obtain the values
of , we will use regression analysis. Taking log on both the sides
Log P =Log A + Log K + Log Y
The various logarithmic values for profit, labour and equity are calculated.
Year Log(Gross Profit) P Log(Labour Cost) K Log(Total Equity) Y
2012 3.923762 2.981819 3.975294
2011 4.05534 3.03543 4.143514
2010 4.107786 3.047275 4.210345
2009 4.122675 3.058805 4.168763
2008 4.239875 3.108565 4.217747
2007 4.237468 3.065953 4.238999
2006 4.126424 2.823474 4.081347
2005 4.078529 2.784617 4.097396
2004 4.046651 2.781037 4.153449
2003 4.087 2.799341 4.180355
2002 4.065953 2.845718 4.154759

This is a simultaneous Linear Equation with 3 unknowns. This can be solved manually as by
taking any three values from above. By taking the value of last three years we get:
2010 log A+(3.047)+(4.210)=4.1077
2011 log A+(3.035)+(4.143)=4.0555

PRATEEK SINGLA 55
2012 log A+(2.981)+(3.975)=3.9237
Solving the equations we get these values-
Log A=0.740
= 0.038
= 0.772
+=0.038+0.772= 0.81 < 1
This indicates that proportional increase in all inputs (capital and employee) will yield a less than
proportional increase in output. There is a decreasing returns to net profit.

PRATEEK SINGLA 56
Board of Directors
Responsibilities of B.O.D.
The Board represents and is accountable to the shareholders of the company. The Board's
responsibilities are active, not passive, and include the responsibility regularly to evaluate the
strategic direction of the company, management policies and the effectiveness with which
management implements them.
The Board's responsibilities also include overseeing the structure and composition of the
company's top management and monitoring legal compliance and the management of risks related
to the company's operations. In doing so, the Board may set annual ranges and/or individual limits
for capital expenditures, investments and divestitures and financial commitments not to be
exceeded without Board approval.
In risk management policies and processes the Boards role includes risk analysis and assessment
in connection with each financial and business review, update and decision-making proposal. Risk
oversight is an integral part of all Board deliberations.
The Board has the responsibility for appointing and discharging the President and the Chief
Executive Officer, the Chief Financial Officer and the other members of the Nokia Leadership
Team. Until September 3, 2013, Stephen Elop was the Chief Executive Officer, and also acted as
President, and his rights and responsibilities included those allotted to the President under Finnish
law. On September 3, 2013 Nokia announced changes to its leadership as a result of the proposed
transaction whereby Nokia will sell substantially all of its Devices & Services business and licence
its patents to Microsoft. These changes are designed to provide an appropriate corporate
governance structure during the interim period following the announcement of this transaction. As
of September 3, 2013, Risto Siilasmaa assumed an interim CEO role for Nokia while continuing
to serve in his role as Chairman of the Nokia Board of Directors. As of September 3, 2013 Timo
Ihamuotila became President of Nokia for the interim period while also continuing to serve as
CFO.
Subject to the requirements of Finnish law, the independent directors of the Board confirm the
compensation and the employment conditions of the President and CEO upon the recommendation

PRATEEK SINGLA 57
of the Personnel Committee. The compensation and employment conditions of the other members
of the Nokia Leadership Team are approved by the Personnel Committee upon the
recommendation of the President and CEO.
It is the responsibility of the members of the Board to act in good faith and with due care so as to
exercise their business judgment on an informed basis in what they reasonably and honestly
believe to be in the best interests of the company and its shareholders. In discharging that
obligation, the directors must inform themselves of all relevant information reasonably available
to them. The Board and each Board Committee also have the power to hire independent legal,
financial or other advisors as they deem necessary.
The Board has three committees: Audit Committee, Corporate Governance and Nomination
Committee and Personnel Committee. These assist the Board in its duties pursuant to their
respective Committee Charters. The Board may, also establish ad hoc committees for detailed
reviews or consideration of particular topics to be proposed for the approval of the Board.
In line with Nokias Corporate Governance Guidelines, the Board conducts annual performance
evaluations, which also include evaluations of the Board Committees work, the results of which
are discussed by the Board. Regarding 2012, the evaluation was conducted by an external
evaluator, and the evaluation consisted of interviews with the Board members. The results of the
evaluation for year 2012 were discussed by the entire Board.
List of Board of Directors
Name (Connections) Board Relationships Primary Company Age
Risto Siilasmaa M.Sc.(Eng.) 36 Realationship Nokia Corporation 47
Jouko Karvinen M.Sc. (Eng.) 46 Relationships Stora Enso Oyj 56
Henning Kagermann 198 Relationships Nokia Corporation 66
Helge Lund 22 Relationships Statoil ASA 51
Kari Stadigh M.Sc. (Eng.), M.Sc. (Econ.) 92 Relationships Sampo Oyj 58
Mrten Mickos 19 Relationships Eucalyptus Systems, Inc. 51
Bruce Brown 29 Relationships P&G Company 55
Elizabeth Nelson 15 Relationships Nokia Corporation 53
Elizabeth Doherty 8 Relationships Nokia Corporation --

PRATEEK SINGLA 58
Leadership Team of Nokia
On September 3, 2013 Nokia announced changes to its leadership as a result of the proposed
transaction whereby Nokia will sell substantially all of its Devices & Services business and licence
its patents to Microsoft. These changes are designed to provide an appropriate corporate
governance structure during the interim period following the announcement of this transaction.
As of September 3, 2013, Risto Siilasmaa assumed an interim CEO role for Nokia while continuing
to serve in his role as Chairman of the Nokia Board of Directors. As part of his interim CEO role,
Mr. Siilasmaa will, among other tasks, oversee strategy and have four direct reports: Michael
Halbherr, Executive Vice President, HERE; Stephen Elop, Executive Vice President, Devices &
Services; Timo Ihamuotila, Nokia CFO and interim President; and Jesper Ovesen, Executive
Chairman of the NSN Board of Directors.
As of September 3, 2013 Timo Ihamuotila became President of Nokia for the interim period while
also continuing to serve as CFO. Mr. Ihamuotila also assumed the responsibility of chairing the
Nokia Leadership Team. The following Nokia Leadership Team members report to Mr.
Ihamuotila: Louise Pentland, Executive Vice President and Chief Legal Officer; Henry Tirri,
Executive Vice President and Chief Technology Officer; Juha krs, Executive Vice President,
Human Resources; and Kai istm, Executive Vice President, Corporate Development.
Personality Pay
Mr. Risto Siilasmaa M.Sc.(Eng.), Age 47
Chairman, Interim Chief Exec. Officer and Chairman of Corp.
Governance & Nomination Committee
569.00k
Mr. Timo Ihamuotila, Age 47
Chief Financial Officer, Exec. VP and Member of Nokia Leadership
Team
865.00k
Mr. Kai , Age 49
Chief Devel. Officer, Exec. VP and Member of Nokia Leadership Team
968.00k
Dr. Henry Tirri Ph.D., Age 57
Chief Technology Officer, Exec. VP and Member of the Leadership
Team
N/A

PRATEEK SINGLA 59
Mr. Juha , Age 48
Exec. VP of HR and Member of Nokia Leadership Team
N/A

Some of the key members of leadership team with their salary are mentioned above.

PRATEEK SINGLA 60
Vision & Strategy of Nokia Corporation
Nokias mission is simple: Connecting People. Our goal is to build great mobile products that
enable billions of people worldwide to enjoy more of what life has to offer. Our challenge is to
achieve this in an increasingly dynamic and competitive environment.
Ideas. Energy. Excitement. Opportunities. In today's mobile world, it feels like anything is possible
- and that's what inspires us to get out of bed every day.
Key elements of Nokias strategy
To build a new winning mobile ecosystem in partnership with Microsoft
To bring the next billion online in developing growth markets
To invest in next-generation disruptive technologies
To increase our focus on speed, results and accountability
To help us achieve our mission, Nokia has formed a strategic partnership with Microsoft that will,
we hope, see us regain lost ground in the smartphone market. Together, we intend to build a global
ecosystem that surpasses anything currently in existence. The Nokia-Microsoft ecosystem will
deliver differentiated and innovative products with unrivalled scale in terms of product breadth,
geographical reach and brand identity.
In feature phones, Nokias strategy is to leverage its innovation and strength in growth markets to
connect even more people to their first internet and application experience. By providing
compelling, affordable and localised mobile experiences, particularly to emerging markets, our
ambition is to bring the next billion online.
Nokias strategy is about investing in and ensuring Nokias future. I have incredible optimism,
said Stephen Elop, Nokia President and CEO, because I can see fresh opportunity for us to
innovate, to differentiate, to build great mobile products, like never before, and at a speed that will
surpass what we have accomplished in the past.
The Nokia-Microsoft partnership brings together two global businesses with highly
complementary sets of assets and competencies. But what will it actually mean for Nokia
smartphone products?

PRATEEK SINGLA 61
First and foremost, Nokia is adopting Windows Phone as its primary smartphone platform.
Working with Microsoft, well help to drive and define the future of the platform by leveraging
our expertise in hardware optimisation, software customisation, and language support.
Nokia and Microsoft are also combining services assets to drive innovation. Nokia Maps, for
example, will soon be at the heart of key Microsoft assets such as Bing and AdCenter, and Nokias
application and content store will be integrated into Microsoft Marketplace. Similarly, Microsoft
will provide developer tools, making it easier for application developers to leverage Nokias global
scale.

PRATEEK SINGLA 62
Philosophy of Nokia Corporation
Nokias core philosophy is reflected in logo of Nokia itself, as the logo says-
CONNECTING PEOPLE
At Nokia, Connecting People is more than a tagline. Its a mission statement that has guided
almost everything weve done for over 20 years.
Much has changed in that time. The number of people with access to a mobile device has grown
from 0.4 per-cent of the population to the present day, when over a billion people connect every
day with a Nokia.
Whats more, the definition of what it means to be connected has changed. The impact of the
Internet has been just as profound as that of the mobile phone on our daily lives, but even today,
only 35 per-cent of the worlds population has access far less than the proportion that has access
to a mobile device. So, with devices like the Nokia 109, Nokia 110 and Nokia 112, were bringing
the mobile Internet to the next billion and beyond.
Were connecting the next billion in a way that works for them. That means designing experiences
that work with their needs. For example: the need to keep data costs very low for these consumers
resulted in the Nokia Xpress Browser.
And then theres social media. To us, the social experience on a mobile device means much more
than just deeply embedding access to one particular social network. It means giving people the
ability to connect widely with others in many different ways.
Thats one of the key reasons we chose Windows Phone as our primary smartphone platform. The
deeply integrated features cover not just Facebook, but Twitter and LinkedIn as well. Its also why
we focus on different social networks for different regions like RenRen and Sina Weibo in China.
The need for access to a variety of networks from a mobile device is also why weve been working
hard to bring other social networking apps to Windows Phone; Tumblr, for example, will be
releasing their app soon.

PRATEEK SINGLA 63
Then theres what we share via social media. We want to help people capture and share the world
around them. That means imagery, so we take our world-class photography features seriously. Not
only does Nokia Lumia running on Windows Phone make sharing your photos with the world
(across multiple networks) quick and easy, but our camera technology helps what you capture look
amazing, even in low light or with a shaky hand. We also provide apps like Smart Shoot and
Cinemagraph to make sure youre doing the most you can with those moments!
But with great power, comes great responsibility
Social media and mobile are literally redefining connecting people, but there are also challenges.
People now have more data on their phones than ever before, including intimate personal details
from social networks. Applications can also potentially capture lots of information about people
and use it in ways in which you may neither be aware nor comfortable. We dont want that to
happen. Were committed to our customers privacy and to preserving the integrity of their data.
We know our customers value this. What we choose to share; where we choose to share it and
what we choose to keep private are a huge part of what makes us human. The mobile ecosystems
we create must respect that.
So what does the future hold?
As the authors of Connecting People, were pleased that more than 20 years into our mission,
and with the rise of social networks and the mobile web, those two simple words remain our driving
force.
In years to come, we can expect even more change driven by advances like augmented reality and
contextual mapping as seen, for example, in City Lens and our HERE suite of experiences. There
will be new and exciting ways to connect, but we must continue to balance awesome technology
with our need for privacy and humanity. At Nokia, that doesnt just mean making technology
easier and faster to use, but also making it available for the specific needs of the many and not just
the few.

PRATEEK SINGLA 64
Nokia Product Range
Nokia comes with one of the largest product range, ranging from monochromatic mobile phones
to state of the art smartphones; from networking components to Personal Computers; from
Digital Television to Military Communication equipment. While some of the products have been
discontinued over time, some are still surviving the tough competition. A list of Nokias Product
range over the years is given below-
Please note the legend used
S.: status, where
P indicates under production,
D is discontinued, and
U is upcoming.
The Mobira series (19821990)
Phone model Screen type Released S. Technology Generation Form factor
Mobira Senator Monochrome 1982 D NMT-450 1G Boxtype The first
mobile phone
Mobira Talkman
450
Monochrome 1985 D NMT-450 1G Boxtype
Mobira Talkman
900
Nokia Talkman
510
Nokia Cityman
100
Monochrome 1990 D ETACS 1G Brick
Nokia Cityman
190
Monochrome 1990 D ETACS 1G Brick
Mobira Cityman
150
Monochrome 1989 D NMT-900 1G Brick
Mobira Cityman
900
Monochrome 1987 D NMT-900 1G Brick
Mobira/Nokia
Cityman 1320
Monochrome 1987 D TACS 1G Brick

PRATEEK SINGLA 65
Original series (19921999)
Phone model Screen type Released S. Technology Form factor
Nokia 252 Monochrome 1998 D AMPS/N-AMPS Candybar
Nokia 282 Monochrome 1998 D AMPS/N-AMPS Clamshell
Nokia 636 Monochrome 1995 D AMPS Candybar
Nokia 640 Monochrome 1999 D NMT-900 Candybar
Nokia 650 Monochrome 1999 D NMT-900 Candybar
Nokia 810 (car phone) Monochrome 2003 D GSM Candybar
Nokia 909 Monochrome 1995 D ETACS Candybar

Nokia 1xxx Ultrabasic series (19962010)
Phone model Screen type Released S. Technology
Nokia 1006 96 65 Monochrome 2002 D CDMA
Nokia 1100 96 65 Monochrome 2003 D GSM
Nokia 1110 96 68 Inverse Monochrome 2005 D GSM
Nokia 1110i 96 68 Monochrome 2006 D GSM
Nokia 1208 96 68 CSTN 2007 D GSM
Nokia 1209 96 68 pixels CSTN 2007 D GSM
Nokia 1220 84 48 Monochrome 2002 D TDMA/AMPS
Nokia 1600 96 68 16-bit 2006 D GSM
Nokia 1610 Monochrome alphanumeric 1996 D GSM
Nokia 1611 Monochrome alphanumeric 1997 D GSM
Nokia 1616 128 160 (65,536) Color 2010 D GSM
Nokia 1620 Monochrome 1997 D GSM
Nokia 1650 (65,536) Color 2008 D GSM

PRATEEK SINGLA 66
Nokia 1661 128 160 (65,536) Color 2008 D GSM
Nokia 1662 128 160 (65,536) Color 2008 D GSM
Nokia 1680 classic 128 160 (65,536) Color 2008 D GSM
Nokia 1800 128 160 (65,536) Color 2010 D GSM

List of Basic Models
Nokia 2010 Nokia 3100 Nokia 5000 Nokia 6010
Nokia 2100 Nokia 3105 Nokia 5030 XpressRadio Nokia 6011i
Nokia 2110i Nokia 3109
classic
Nokia 5100 Nokia 6015
Nokia 2112 Nokia 3110 Nokia 5110 Nokia 6015i
classic
Nokia 5120 Nokia 6016i
Nokia 2115i Nokia 3120 Nokia 5125 Nokia 6019i
Nokia 2116i Nokia 3120
classic
Nokia 2118 Nokia 3125 Nokia 5130 XpressMusic Nokia 6021
Nokia 2120/2120
plus
Nokia 3128 Nokia 5140 Nokia 6030
Nokia 2125i Nokia 5140i Nokia 6060
Nokia 2126i Nokia 3152 Nokia 5160 Nokia 6070
Nokia 2128i Nokia 5165 Nokia 6085
Nokia 2160i Nokia 5170i Nokia 6090 (car
phone)
Nokia 2168 Nokia 3200 Nokia 5180iP Nokia 6100
Nokia 2170 Nokia 3205 Nokia 5185i Nokia 6101
classic
Nokia 2190 Nokia 3210 Nokia 5200 XpressMusic Nokia 6102i
Nokia 2220 slide Nokia 3230 Nokia 5220 XpressMusic Nokia 6108
Nokia 2260 Nokia 3280 Nokia 5233 Nokia 6110 Navigator
Nokia 2280 Nokia 3310 Nokia 5320 XpressMusic Nokia 6120 Classic
Nokia 2285 Nokia 3315 Nokia 5330 Mobile TV
Edition
Nokia 6121 Classic
Nokia 2300 Nokia 3320 Nokia 5500 Nokia 6122 Classic

PRATEEK SINGLA 67
Nokia 2366i Nokia 3390 Nokia 5630 XpressMusic Nokia 6131
Nokia 2600 classic Nokia 3410 Nokia 5800 XpressMusic Nokia 6136
classic
Nokia 2626 Nokia 3510 Nokia 6162 Nokia 7100 Supernova
Nokia 2630 Nokia 3510i Nokia 6150 Nokia 7110
Nokia 2652 Nokia 3560 Nokia 7200
Nokia 2680 slide Nokia 3555 Nokia 6155i Nokia 7210
Nokia 2690 Nokia 3570 Nokia 7210 Supernova
Nokia 2700 classic Nokia 3585 Nokia 6160 Nokia 7230
Nokia 2710 Nokia 3585i Nokia 6165i Nokia 7250
Nokia 2720 fold Nokia 3586i Nokia 7250i
Nokia 2730 classic Nokia 3587i Nokia 6170 Nokia 7260
Nokia 2855i Nokia 3590 Nokia 6200 Nokia 7310 Supernova
Nokia 6303 Classic Nokia 3600 Nokia 6210 Navigator Nokia 7370
Nokia 6300i Nokia 3600 slide Nokia 6215i Nokia 7373
Nokia 6310 Nokia 3610 Nokia 6220 classic Nokia 7390
Nokia 6310i Nokia 3620 Nokia 6223 Nokia 7500 Prism
Nokia 6315i Nokia 3650 Nokia 6225 Nokia 7510 Supernova
Nokia 6340i Nokia 3810 Nokia 6230i Nokia 7610 Supernova
Nokia 6370 Nokia 6270 Nokia 6235/6236 Nokia 7710
Nokia 6385 Nokia 6275 Nokia 6235i/6236i Nokia 7900 Prism
Nokia 6500 Nokia 6280 Nokia 6250 Nokia 7900 Crystal
Prism
Nokia 6500 classic Nokia 6288 Nokia 6255i Nokia 6585
Nokia 6500 slide Nokia 6290 Nokia 6256i Nokia 6590
Nokia 6510 Nokia 6610 Nokia 6260 Nokia 6590i
Nokia 6555 Nokia 6610i Nokia 6260 Slide Nokia 6600

PRATEEK SINGLA 68
Nokia 6560 Nokia 6620 Nokia 6263 Nokia 6600 fold
Nokia 6682 Nokia 6630 Nokia 6700 slide Nokia 6600 slide
Nokia 6800 Nokia 6638 Nokia 6710 Navigator Nokia 6600i slide
Nokia 6820 Nokia 6650 fold Nokia 6730 Nokia 6700 classic
Nokia 6822 Nokia 6651 Nokia 6750 Mural Nokia 6760 slide

Nokia Asha Series
Phone model Screen type Released S. Camera
Nokia Asha 200/201 320 x 240 pixels (256K) 2011 Q4 P 2.0 MP
Nokia Asha 202 240 x 320 pixels (256K) 2012 Q2 P 2.0 MP
Nokia Asha 210 320 x 240 pixels 2013 Q2 P 2 MP
Nokia Asha 300 240 x 320 pixels (256K) 2012 Q4 P 5 MP
Nokia Asha 501 320 x 240 pixels 2013 Q2 P 3.2 MP

Nokia Lumia Series
Phone model Screen type Released S. Form factor Camera
Nokia Lumia 505 480x800 px 65k-color
WVGAAMOLED
2013 P Candybar 8.0 MP
Nokia Lumia 510 480x800 px 65k-color 2012 D Candybar 5.0 MP
Nokia Lumia 520 (520T
for China Mobile)
480x800 px 16m-color 2013 P Candybar 5.0 MP
Nokia Lumia 610 480x800 px 16m-color 2012 D Candybar 5.0 MP
Nokia Lumia 620 480x800 px 16m-color 2013 P Candybar 5.0 MP
Nokia Lumia 710 480x800 px 16m-color WVGA 2011 D Candybar 5.0 MP
for China Mobile)
480x800 px 16m-color 2013 P Candybar 6.7 MP

PRATEEK SINGLA 69
Nokia Lumia 800 (800c
for China Telecom)
480x800 px 16m-color
WVGAAMOLED (16.7M)
2011 D Candybar 8.0 MP
Nokia Lumia 810 480x800 px 16m-color
WVGAAMOLED (16.7M)
WVGAAMOLED (16.7M)
2012 P Candybar 8.0 MP
WVGAAMOLED (16.7M)
WVGAAMOLED (16.7M)
2012 P Monoblock 8.0 MP
for China Mobile)
1280x768 px 16m-color
WXGA IPSPureMotion HD+
2012 P Monoblock 8.7 MP
Nokia Lumia 925 1280x768 px 334
ppi AMOLED
2013 P Monoblock 8.7MP
Nokia Lumia
928(Verizon)
4.5in 1280x768 AMOLED 334
PPI touchscreen display
2013 P Monoblock 8.7MP
Nokia Lumia 1020 4.5in 1280x768 AMOLED 334
PPI touchscreen display
2013 P Monoblock 41MP

Apart from above mentioned mobile phone series, (which is still not exhaustive in nature), Nokia has
also following product line-
Online Services
HERE
Nokia Music
N-Gage
Software Solutions
Nokia PC Suite Nokia Business Center
Nokia Ovi Suite Nokia Sensor
Nokia Photos Gammu and Wammu for both Linux and MS Windows
Nokia Lifeblog Nokia Sports Tracker
Intellisync Mobile Suite Nokia Software Updater

Security Solutions
Nokia IP 40 Nokia IP 390 (EU Only)
Nokia IP 130 Nokia IP 530

PRATEEK SINGLA 70
Brand Ambassador
Nokia has been working with Priyanka Chopra and Shahrukh
Khan as brand ambassador for their advertising, sales and
promotion activities in India. It's not normal practice for a
brand which is a market leader by a distance to rope in a
celebrity and that too for the first time since it entered the
Indian market.
But that's exactly what Nokia has done by getting on board
Bollywood superstar Shah Rukh Khan for its latest brand
campaign. The first campaign featuring the actor goes on air
with a TV commercial from December 21.
Explains Devinder Kishore, director (marketing), Nokia: "As a brand we have always ranked high
on facets such as reliability, authenticity and our image among the youth, something which
Shahrukh too stands for."
Other handset majors such as Motorola and Sony Ericsson already have celebrities like Abhishek
Bachchan and Hrithik Roshan, respectively, sporting their products.
Kishore feels the campaign is all about telling people the integral role the brand plays in their lives.
"Just like in Shahrukh's life, Nokia has been an integral part of so many other people's lives," he
adds.
Nokia in the past has used celebrities like Naseeruddin Shah but only for product specific
campaigns. Globally too, Nokia has refrained from using any brand ambassadors.
The TV commercial features Khan using various Nokia phones in different circumstances and
highlighting their functionality.
For instance, he is shown checking his e-mail on one of the phones while in another frame he is
interacting with his fans as they take his pictures on a Nokia handset. The commercial ends with
the six-pack Khan declaring that Nokia has been an integral part of his life for the last ten years.

PRATEEK SINGLA 71
Khan, who already endorses brands such as Hyundai, Hewlett Packard, Tag Heuer, Diageo's
Masterstroke, Videocon, Sunfeast, commands close to Rs 5 crore per deal.
While Nokia refused to divulge the ad spend, Kishore says the campaign would be "hard to miss"
and one can gauge the magnitude of the spend by watching it. Apart from television, the company
will use mediums such as print, outdoor, points of sale and digital media to publicise the campaign.

PRATEEK SINGLA 72
Brand Positioning
Nokia has very successfully got a strong position in capturing the large number of market through
its multi brand strategy throughout the world. The Nokia has not only considered a single class for
its products but the whole economy of a country. The main advantage that goes to Nokia is that
its a brand positioning corporation for its market and a brand can be used by all classes with any
hesitation. For example if we talk of Nokia 1200 series this is used by many people without any
social distinguish.
When Nokia positions its brand in the crowded mobile phone marketplace, its message must
clearly bring together the technology and human side of its offer in a powerful way. The specific
message that is conveyed to consumers in every advertisement and market communication (though
not necessarily in these words) is Only Nokia Human Technology enables you to get more out of
life"
In many cases, this is represented by the tag line, "We call this human technology". This gives
consumers a sense of trust and consideration by the company, as though to say that Nokia
understand what they want in life, and how it can help. And it knows that technology is really only
an enabler so that you-the customer-can enjoy a better life. Nokia thus uses a combination of
aspirational, benefit-based, emotional features, and competition-driven positioning strategies. It
owns the "human" dimension of mobile communications, leaving its competitors wondering what
to own (or how to position themselves), having taken the best position for itself.
Nokia is a great brand because it knows that the essence of the brand needs to be reflected in
everything the company does, especially those that impact the consumer. Product design is clearly
critical to the success of the brand, but how does Nokia manage to inject personality into product
design? The answer is that it gives a great deal of thought to how the user of its phones will
experience the brand, and how it can make that experience reflect its brand character. The large
display screen, for example, is the "face" of the phone. Nokia designers describe it as the "eye into
the soul of the product". The shape of phones is curvy and easy to hold. The faceplates and their
different colours can be changed to fit the personality, lifestyle, and mood of the user. The soft key
touch pads also add to the feeling of friendliness, expressing the brand personality. Product design
focuses on the consumer and his needs, and is summed up in the slogan, "human technology."

PRATEEK SINGLA 73
Nokia now accounts for over half of the value of the Finland stock market, and has taken huge
market share from its competitors. According to one brand valuation study carried out in mid-
1999, it ranked 11th on the world's most valuable brand list, making it the highest-ranking non-
U.S. brand. As has been pointed out, it has unseated Motorola. Nokia achieved its brilliant feat
through consistent branding, backed by first-class logistics and manufacturing, all of which
revolve around what consumers want.

PRATEEK SINGLA 74
Advertising Costs
Following advertising costs were incurred by Nokia in past few years (all costs are in Million
US$)
Year Advertising / Selling Costs
2012 5611.6
2011 6541.4
2010 6596.7
2009 6688.3

It can be observed that because of continuous decrease in rate of sales starting from year 2009,
Nokia has been reducing advertising costs and investing more in Research and development for
product improvement.
There are many priorities within a business, but in a marketing orientated company like Nokia,
many of the following principles will be high on the agenda:
1. Customer satisfaction: Market research must be used to find out whether customers'
expectations are being met by current products or services.
2. Customer perception: this is based on the images consumers have of the organization and its
products, this can be based on; value for money, product quality, fashion and product reliability.
3. Customer needs and expectations: This is anticipating future trends and forecasting for future
sales. This is vital to any organization if they wish to keep their entire current market share and
develop more.
4. Generating income or profit: This principle clearly states that the need of the organization is to
be profitable enough to generate income for growth and to satisfy stakeholders in the business.
Although satisfying the customer is a big part of a companys plans they also need to take into
account their own needs, such as:
5. Making satisfactory progress: Organizations need to make sure that their product is developing
along with the market, if a product is developing well, then income should increase, if not then
the marketing strategy should be revised.

PRATEEK SINGLA 75
6. Be aware of the environment: An organization should always know what is happening within
their designated market, if it is changing, saturation, technological advances, slowing down or
rapidly growing, being up to date on this is essential for companies to survive.

PRATEEK SINGLA 76
Nokias pricing strategy
Nokia is one brand name that inspires all those who are into the mobile culture. Of the entire brand
that touches our lives, Nokia stand s out significantly. It has taken mobility a step forward by
creating products with continuous innovations in this industry has made it imperative that every
player keeps pace with changes. Nokia has been one step ahead in anticipating future market moves
and strategizing accordingly.
Interestingly the company prices its products so competitively that it not only ensures that its
margins are covered but also assures revenue maximization.
Let us see how Nokia leveraged it segmentation strategies, appealed to various segments with
uniquely designed messages and differentiated between its products at every level to communicate
and connect effectively with the intended target audience. When Nokia positions its product to the
top end segment, it does it as a classy product. To the middle segment customers it is in the form
of the best alternative. To the lower end segment, the carrot is that Nokia gives real value, as a
high tech product, at low affordable price.
The pricing strategy of Nokia can be better understood when the juxtaposed with the skimming
strategy and further interposed on Philip Kotlers nine price/quality strategies model.
Premium
Strategy
Overcharging
Strategy
Rip Off
Strategy
High Value
Strategy
Medium Value
Strategy
False
Economy
Strategy
Super Value
Strategy
Good value
Strategy
Economy
Strategy

PRATEEK SINGLA 77
With a vast family of brand that caters to every segment, one can clearly see how Nokia, yielding
to the pressure due to the competitive and innovative mobile handset market, slides each brand
down the segments, one at a time by reducing its prices carefully and consistently)

PRATEEK SINGLA 78
Retail Distribution Model
The Finnish giant has set up 350 shop-inshops inside mobile phone retail stores in top 16 cities
from where it plans to distribute and sell services such as applications, music, navigation and email
solutions, a senior official at Nokia India said.
This is the first time the world's largest mobile phone company has initiated a retail distribution
model for its services venture. Nokia has plans to scale this up in a big way, especially in the rural
areas, once the pilot phase is over in another six months.
"Since PC and broadband penetration is low in India, it is important to build a retail distribution
model to take services to the masses," said Nokia India head (OPM & devices) Jasmeet Gandhi.
"This will be a platform which will have immense possibilities and the potential to transform the
services business as we can tap our huge dealer network," he said.
Nokia India is also soon coming with a local billing model for its mobile applications store, Ovi
Store. At present, there are around 50,000 applications in the store. "We will also make available
the applications store in our services retail point so that consumers can conveniently buy mobile
applications there," said Mr Gandhi.
The retail distribution from Nokia comes at a time when the company has already made a few of
its services free in India. It has already made navigation service free and has recently announced
free unlimited download of music with select handsets. Nokia feels such a strategy will be vital as
more than 80% of Indian consumers already access or download free digital content.
"While free music is currently available in five handsets, we plan to take this to handsets across
price bands or at least the top 15 models. This even includes the mass market range which runs on
the S40 operating system," said Mr Gandhi.
Even though it's early days for Nokia in the mobile services space, India has already emerged as
one of the top markets. India ranks amongst the top three market for music downloads with around
one million registered users, next to UK and Italy.

PRATEEK SINGLA 79
Nokia R&D
Nokia invests a significant proportion of its income in research and development expenditure. A
graph showing R & D Expenditure over the years is shown below-

Nokia has a dedicated research centre which conducts all its research related activities. Nokia
Research Center (NRC) is chartered with exploring new frontiers for mobility and solving
scientific challenges in order for Nokia to deliver irresistible mobile experiences in the future.
Founded in 1986, NRC is Nokia's corporate research arm and part of the CTO organization. In
2011, NRC celebrated 25 years of innovations that have transformed the lives of billions of people
around the world.
From its beginnings in Helsinki, Nokia Research Center has expanded by establishing laboratories
worldwide, strategically locating them to collaborate with leading universities, research
institutions and industrial partners. The result is an impressive record of inventions that have
shaped todays mobile industry and pave the path for the future.
0
1
2
3
4
5
6
7
8
9
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
R

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x
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,

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n

b
i
l
l
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n

d
o
l
l
a
r
s
Years
R&D Expense

PRATEEK SINGLA 80
SAR Levels in Nokia Phones
About 70 per cent of the handsets manufactured at Nokias Chennai factory are "in partial
compliance" with the new specific absorption rate (SAR) standards, according to an inspection
report by the Department of Telecommunications (DoT) dated June 25.
The deadline for mobile phone makers to comply with the revised SAR standards is August 31,
2013.
SAR is the rate at which energy is absorbed by the body when exposed to a radio frequency
electromagnetic field. Radio waves are emitted by mobile telephone handsets.
However, responding to a Business Standard query on DoTs comments, Nokia said the company
is "already 100 per cent compliant with first requirement -- SAR value".
"We are already 100 per cent compliant with the first requirement that is SAR value. We have
made significant progress on the other two requirements and are on track to meet the deadline well
in time. Nokia was not only the first manufacturer to act on the new standards, but also the only
one to add SAR compliance stickers at the back of our devices," said the company.
Nokia is the market leader in India with more than 20 per cent share (by volume).
According to a top DoT official, there have been random checks at different factories of different
handset makers and respective teams have submitted their reports. "This is not final. There is time
for the companies. However, DoT will go for proper inspections after the deadline of August 31,
2013."
Last year, the government had fixed the SAR value on mobile at 1.6 watts/kg averaged over one
gram of human tissue. Previously, the SAR value for handsets was 2 watts/kg measured over one
gram of tissue. Both manufacturers and importers of mobile handsets will have to meet SAR
standards by August 31, 2013.
According to the new SAR norms, companies will have to mention the actual SAR measurement
value for a particular device and related information in the user manuals. Besides, when *#07# is
keyed in, handsets should display the maximum SAR level of the device, as mentioned in the user
guide.

PRATEEK SINGLA 81
Pankaj Mohindroo, president of Indian Cellular Association, said: "All new handsets that are
coming in the market are complying with the new norms and old handsets are being phased out.
But, the government is not taking any step on the importers of Chinese handsets. DoT should first
take steps against them, instead of doing this."

PRATEEK SINGLA 82
Retrospective Tax case of Nokia
Finnish handset maker Nokia Corp. has said that the Delhi High Court had unfrozen some of the
company's assets that Indian authorities had frozen as part of a Rs 2,080-crore tax dispute.
"Late last week, the Delhi High Court ruled in Nokia's favour in a case where the Indian tax
authorities froze some of Nokia's assets for potential claims that hadn't even been raised against
the company yet," the company said in a statement.
Separately, a company spokesman said that while bank accounts were unfrozen, all other assets
frozen by the tax department remained so. The company's manufacturing plant near Chennai,
which formed a part of a recent deal by Nokia to sell its handset business to Microsoft, was among
the assets frozen by the department. The issue stemmed from a retrospective tax demand of Rs
2,080 crore from the finance ministry in March this year.
The ministry's income tax department said that the company's India unit evaded taxes on software
downloaded on handsets manufactured in Nokia India's Sriperumbudur facility since 2006. Nokia
has denied any wrong doing.
"Contrary to speculation in the media, Nokia has sufficient assets in India to meet its tax
obligations, details of which will be shared with the tax authorities to allay any concerns they may
have. Given that negotiations are ongoing, Nokia will not comment further on this matter," it said.
Nokia reiterated that it operates with transparency in its business transactions, and was committed
to resolving outstanding issues with Indian tax authorities in accordance with all applicable laws.
However, it added that it will also ready itself to 'defend vigorously as needed.'
The Helsinki-based company had written to the government in June expressing its displeasure at
being treated unfairly. It had reportedly threatened to wind up its manufacturing business from
India, which had become the 'least favourable market' in the world to do business in.
"The political risk of operating in India (is) suddenly substantially higher and may inevitably
influence future decisions to develop one's operations in India... It is very important that the Indian
government corrects quickly these surprising actions of individual tax authorities against Nokia to

PRATEEK SINGLA 83
restore the trust of Nokia and other multinational companies in India as a good place of business,"
the company had said.
Nokia had added that the finance ministry's move was against bilateral treaty between India and
Finland, under which software business is taxed in Finland. Nokia is the latest among companies
such as Vodafone and Cadbury, ranging across sectors from steel to retail, that have raised
concerns about increasing risks of doing business in India.

PRATEEK SINGLA 84
Corporate Social Responsibility

Here are some selected highlights from Nokia CSR report:
Corporate taxation
Nokia says that, "as a good corporate citizen Nokia pays the amount of tax legally due and
observes all applicable rules and regulations in each country where it operates". The report
notes that the company has followed the same centralised business model in the allocation
of taxable income since the early 1990s. In essence, the majority of profit (and loss) is
carried by the business in Finland, with a smaller portion carried in the countries in which
Nokia operates. Although it's not specifically mentioned in the report for obvious reasons,
this is in sharp contrast to a number of other technology companies who have been in the
headlines for offshoring profits in low corporate tax jurisdictions.

PRATEEK SINGLA 85
Employees
As a result of Nokia's new strategy (switch to Windows Phone) there were a large number
of job losses. In order to help employees affected by the reductions Nokia established a
support program call Bridge. By the end of 2012 17,000 employees had participated in the
program, and almost 1,000 new businesses have been set up by former employees.
Environmental design
A dedicated design for environment (DFfE) specialists work actively throughout every
product development project at Nokia, verifying legal and voluntary target compliance, as
well as promoting sustainable alternatives for materials and other design considerations.
Over the last decade Nokia has reduced the greenhouse gas footprint of their phones by
50%.
Materials
In 2012 Nokia banned the used of radioactive substances in all products, packaging, and
internal production processes. This in the latest in a long line of substance nad material
management policies. For example, the use of perfluorooctanoic acid (PFOA) was
restricted, and in 2010 all Nokia products were free from bromine and chlorine compounds
related to flame retardants.
In 2012 Nokia retail packaging material used 18,875 tonnes of paper (on average 52%
recycled) and a futher 9,569 tonnes of paper (on average 89% recycled) in transport
packaging material.
Chargers
Over the last 10 years Nokia has reduced the no-load consumption of its chargers by
73% (i.e. charger plugged in, but not being actively used for charging). The best-in-class
chargers have seen a 90% reduction.
The average no-load power consumption on Nokia chargers shipped in 2012 was 0.098W,
a reduction of 13% from the previous year.
In 2012 all new Nokia devices are being shipped with four or five star charger.

PRATEEK SINGLA 86
Emissions
40% of the electricity used by Nokia comes from renewable sources
Nokia aims to reduce CO2 emissions by a minimum of 30% by 2020 (from a 2006
baseline). The 2013 emissions figure was down 29% from 2006.
Nokia reduced CO2 emissions from air travel by 54% from 2011 to 2012 in total, and by
39% when calculating reductions per employee. In part this was due to the installation and
greater use of new video conferencing facilities.

PRATEEK SINGLA 87
SWOT Analysis
According to Kotler and Keller (2009 p.101) SWOT analysis is a way to monitor companys
internal and external environment, it is the overall evaluation of the strengths, weaknesses,
opportunities and threats. If a company takes under consideration its strengths, and builds its
strategy exposing and utilising them this will create a competitive advantage. Weaknesses and
threats are those factors that can affect the company in negative way. Nokia should be aware of
these, so that the strategy it develops can offset its weaknesses and protect from the threats.
Opportunities are the chances for the company to expand and grow in the market.
Strengths
One of Nokias main strengths is in its brand. Before the mobile phone market was side lined due
to changing market trends, Nokia has been one of the most respected and well-known companies
in the mobile phone market. Their products are associated with distinct design, accountability and
sturdiness. The company has headed the sales in mobile phone market since 1998 until the last
couple of years (Samsung overtakes Nokia, 2012).
Nokia has developed brand awareness and the company brand has been associated with the best
products in the industry. Although Nokia is having hard times catching up with the Smartphone
market, their brand and loyal customers can help the company to regain its market share. The
company has been long time in the smartphone market and has great and experienced personnel.
Weakness
Nokia is having difficulties catching up with the changing customer trends; it is lagging with
introducing innovative products. The main evidence for this is the inability of the company to meet
market trends after the Iphone release, and the failure of its Symbian platform. Nokia plays the
role of phone manufacturer so Internet, software and services are not its strengths. However this
weakness is now offset by the Partnership with Microsoft.

PRATEEK SINGLA 88
Opportunities
The main opportunity for Nokia is in its partnership with Microsoft. Nokia is one of the first
companies to provide Windows phone, it could use this as competitive advantage, and develop
new and innovative products. Samsung and HTC have also released Windows Phone 8 models
after the first Lumia Smartphones were introduced in Europe. However Samsung has only one
windows phone and Nokia by now has released eight. This means that Nokia is more experienced
into developing joint products with Microsoft. The company can expand its Lumia series offering
devices from different price range and features to serve multiple customer demands.
Threats
Nokia is facing a huge competition in the Smartphone market from Samsung, HTC and Motorola.
In the high end costly mobile segment the company is facing Apples Iphone and RIMs
Blackberry. Nokia has played the role of a market follower and has lost time in the Smartphone
market with developing and repairing its strategy. Nokia has switched from Symbian software to
Windows phone, which confused customers and made it hard for the company to deliver its
message and build awareness in the market.
It will be very hard for the company to come back to the top again as Smartphone switch from the
customers perspective is hard. The handset is more than just a phone, it becomes part of peoples
lives keeping their important and personal information, it adjusts to their personal preferences.
Due to the different software it is hard for the users to transfer their information from one software
as Android to other as Apples IOS. This switch may cost users to loose important information.
Given all this customers need a very good reason to change their operating system. In order for
Nokia to gain back its lost market share, the company has to come up with very good technology,
and convince the customers that their products are the best choice in the market.

From the SWOT analysis it becomes clear that Nokia has its main strength in its brand and its loyal
customers. The company should use this to regain its reputation as one of the top brands in the
market. Nokia is threatened by huge competition from its existing rivals. The company should use
its partnership with Microsoft to build great products and regain its lost market share.

PRATEEK SINGLA 89

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PRATEEK SINGLA MBA GENERAL SECTION A BUSINESS ECONOMICS

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