ORIGIN OF NOKIA

From roots in paper, rubber, and cables, in just over 100 years Nokia becomes a powerful industrial
conglomerate...

The newly formed Nokia Corporation is ideally positioned for a pioneering role in the early evolution
of mobile communications...

As mobile phone use booms, Nokia makes the sector its core business. By the turn of the century,
the company is the world leader...

Nokia sells its billionth mobile phone as the third generation of mobile technology emerges...

Nokia Corporation

Type Public – Oyj

Industry Telecommunications

Internet

Computer software

Founded Tampere, Finland (1865)

incorporated in Nokia (1871)
Founder(s) Fredrik Idestam

Leo Mechelin

Headquarters Espoo, Finland

Area served Worldwide

Key people Jorma Ollila (Chairman)

Stephen Elop (President & CEO)

Timo Ihamuotila (CFO)

Kai Öistämö (CDO)

Richard Green (CTO)

Products Mobile phones

Smartphones

Mobile computers

Networks

(See products listing)

Services Maps and navigation, music,messaging and media

Software solutions

(See services listing)

Revenue €42.45 billion (2010)[1]

Operating income €2.070 billion (2010)[1]

Net income €1.850 billion (2010)[1]

Total assets €39.12 billion (end 2010)[1]

Total equity €16.23 billion (end 2010)[1]

Employees 132,430 (end 2010)[1]

Divisions Mobile Solutions

Mobile Phones

Markets
 Subsidiaries Nokia Siemens Networks

Navteq

Symbian

Vertu

Qt Development Frameworks

Nokia Corporation

Address: 
Keilalahdentie 4 
FIN-02150 Espoo 
Finland 

Telephone: (358) 9 18 071 
Fax: (358) 9 656 388 
http://www.nokia.com 

Statistics: 
Public Company 
Incorporated: 1865 
Employees: 55,000 
Sales: EUR 19.77 billion (US$19.93 billion) (1999) 
Stock Exchanges: Helsinki Stockholm London Frankfurt Paris New York 
Ticker Symbol: NOK 
NAIC: 334210 Telephone Apparatus Manufacturing; 334220 Radio and Television Broadcasting and
Wireless Communications Equipment Manufacturing; 334290 Other Communications Equipment
Manufacturing; 334419 Other Electronic Component Manufacturing 

Company Perspectives:
Nokia is a leading international communications company, focused on the key growth areas of
wireline and wireless telecommunications. Nokia is a pioneer in digital technology and wireless
data communications, continuously bringing innovations to the highly competitive and growing
telecommunications markets. Nokia is also actively involved in international R & D cooperation,
including the development of the standards for third generation mobile telephony. 

Key Dates:
1865: Nokia Company is founded as a maker of pulp and paper. 
1898: Finnish Rubber Works is founded. 
1912: Finnish Cable Works is formed. 
1915: Nokia shares are first listed on the Helsinki exchange. 
1967: Nokia merges with Finnish Rubber Works and Finnish Cable Works to form Nokia Corporation. 
1979: Mobira Oy is formed as a mobile phone company. 
1981: The first international cellular system, the Nordic Mobile Telephone network, comes on line,
having been developed with the help of Nokia. 
1982: Nokia acquires Mobira, which later becomes the Nokia Mobile Phones division. 
1986: Company markets internationally the first Nokia mobile telephone. 
1993: The first Nokia digital cellular phone hits the market. 
1998: Nokia surpasses Motorola as the world's number one maker of mobile phones. 
Company History:
Nokia Corporation is the world's largest manufacturer of mobile phones, with a worldwide market
share of about 27 percent, far surpassing the number two player, Ericsson, which has about 17
percent. About two-thirds of the company's net sales are generated by the Nokia Mobile Phones
business group. Nokia's other main business group is Nokia Networks, which is responsible for about
30 percent of net sales. Nokia Networks is a leading global supplier of infrastructure for mobile,
fixed, broadband, and Internet Protocol (IP) networks. With a sales network that spans 130 nations,
Nokia Corporation generated more than half of its sales in Europe, a quarter in the Americas, and
about 22 percent in the Asia-Pacific region. Over the course of its more than 135 years in business,
the company has evolved from a concentration in pulp, paper, and other basic industries to a focus
on telecommunications.
19th-Century Origins
Originally a manufacturer of pulp and paper, Nokia was founded as Nokia Company in 1865 in a
small town of the same name in central Finland. Nokia was a pioneer in the industry and introduced
many new production methods to a country with only one major natural resource, its vast forests.
As the industry became increasingly energy-intensive, the company even constructed its own power
plants. But for many years, Nokia remained an important yet static firm in a relatively forgotten
corner of northern Europe. Nokia shares were first listed on the Helsinki exchange in 1915.
The first major changes in Nokia occurred several years after World War II. Despite its proximity to
the Soviet Union, Finland has always remained economically connected with Scandinavian and other
Western countries, and as Finnish trade expanded Nokia became a leading exporter.
During the early 1960s Nokia began to diversify in an attempt to transform the company into a
regional conglomerate with interests beyond Finnish borders. Unable to initiate strong internal
growth, Nokia turned its attention to acquisitions. The government, however, hoping to rationalize
two underperforming basic industries, favored Nokia's expansion within the country and encouraged
its eventual merger with Finnish Rubber Works, which was founded in 1898, and Finnish Cable
Works, which was formed in 1912, to form Nokia Corporation. When the amalgamation was
completed in 1966, Nokia was involved in several new industries, including integrated cable
operations, electronics, tires, and rubber footwear, and had made its first public share offering.
In 1967 Nokia set up a division to develop design and manufacturing capabilities in data processing,
industrial automation, and communications systems. The division was later expanded and made
into several divisions, which then concentrated on developing information systems, including
personal computers and workstations, digital commScandinavia. unications systems, and
mobile phones. Nokia also gained a strong position in modems and
automatic banking systems in
Oil Crisis, Corporate Changes: 1970s
Nokia continued to operate in a stable but parochial manner until 1973, when it was affected in a
unique way by the oil crisis. Years of political accommodation between Finland and the Soviet
Union ensured Finnish neutrality in exchange for lucrative trade agreements with the Soviets--
mainly Finnish lumber products and machinery in exchange for Soviet oil. By agreement, this trade
was kept strictly in balance. But when world oil prices began to rise, the market price for Soviet oil
rose with it. Balanced trade began to mean greatly reduced purchasing power for Finnish
companies such as Nokia.
Although the effects were not catastrophic, the oil crisis did force Nokia to reassess its reliance on
Soviet trade (about 12 percent of sales) as well as its international growth strategies. Several
contingency plans were drawn up, but the greatest changes came after the company appointed a
new CEO, Kari Kairamo, in 1975.
Kairamo noted the obvious: Nokia was too big for Finland. The company had to expand abroad. He
studied the expansion of other Scandinavian companies (particularly Sweden's Electrolux) and,
following their example, formulated a strategy of first consolidating the company's business in
Finland, Sweden, Norway, and Denmark, and then moving gradually into the rest of Europe. After
the company had improved its product line, established a reputation for quality, and adjusted its
production capacity, it would enter the world market.
Meanwhile, Nokia's traditional, heavy industries were looking increasingly burdensome. It was
feared that trying to become a leader in electronics while maintaining these basic industries would
create an unmanageably unfocused company. Kairamo thought briefly about selling off the
company's weaker divisions, but decided to retain and modernize them.
He reasoned that, although the modernization of these low-growth industries would be very
expensive, it would guarantee Nokia's position in several stable markets, including paper, chemical,
and machinery productions, and electrical generation. For the scheme to be practical, each
division's modernization would have to be gradual and individually financed. This would prevent the
bleeding of funds away from the all-important effort in electronics while preventing the heavy
industries from becoming any less profitable.
With each division financing its own modernization, there was little or no drain on capital from
other divisions, and Nokia could still sell any group that did not succeed under the new plan. In the
end, the plan prompted the machinery division to begin development in robotics and automation,
the cables division to begin work on fiber optics, and the forestry division to move into high-grade
tissues.
Rise of Electronics: 1980s
Nokia's most important focus was development of the electronics sector. Over the course of the
1980s, the firm acquired nearly 20 companies, focusing especially on three segments of the
electronics industry: consumer, workstations, and mobile communications. Electronics grew from
ten percent of annual sales to 60 percent of revenues from 1980 to 1988. In late 1984 Nokia
acquired Salora, the largest color television manufacturer in Scandinavia, and Luxor, the Swedish
state-owned electronics and computer firm. Nokia combined Salora and Luxor into a single division
and concentrated on stylish consumer electronic products, since style was a crucial factor in
Scandinavian markets. The Salora-Luxor division was also very successful in satellite and digital
television technology. Nokia purchased the consumer electronics operations of Standard Elektrik
Lorenz A.G. from Alcatel in 1987, further bolstering the company's position in the television market
to the third largest manufacturer in Europe. In early 1988 Nokia acquired the data systems division
of the Swedish Ericsson Group, making Nokia the largest Scandinavian information technology
business.
Although a market leader in Scandinavia, Nokia still lacked a degree of competitiveness in the
European market, which was dominated by much larger Japanese and German companies. Kairamo
decided, therefore, to follow the example of many Japanese companies during the 1960s (and
Korean manufacturers a decade later) and negotiate to become an original equipment
manufacturer, or OEM, to manufacture products for competitors as a subcontractor.
Nokia manufactured items for Hitachi in France, Ericsson in Sweden, Northern Telecom in Canada,
and Granada and IBM in Britain. In doing so it was able to increase its production capacity stability.
There were, however, several risks involved, those inherent in any OEM arrangement. Nokia's sales
margins were naturally reduced, but of greater concern, production capacity was built up without a
commensurate expansion in the sales network. With little brand identification, Nokia feared it
might have a difficult time selling under its own name and become trapped as an OEM.
In 1986 Nokia reorganized its management structure to simplify reporting efforts and improve
control by central management. The company's 11 divisions were grouped into four industry
segments: electronics; cables and machinery; paper, power, and chemicals; and rubber and
flooring. In addition, Nokia won a concession from the Finnish government to allow greater foreign
participation in ownership. This substantially reduced Nokia's dependence on the comparatively
expensive Finnish lending market. Although there was growth throughout the company, Nokia's
greatest success was in telecommunications.
Having dabbled in telecommunications in the 1960s, Nokia cut its teeth in the industry by selling
switching systems under license from a French company, Alcatel. The Finnish firm got in on the
cellular industry's ground floor in the late 1970s, when it helped design the world's first
international cellular system. Named the Nordic Mobile Telephone (NMT) network, the system
linked Sweden, Denmark, Norway, and Finland. A year after the network came on line in 1981,
Nokia gained 100 percent control of Mobira, the Finnish mobile phone company that would later
become its key business interest as the Nokia Mobile Phones division. Mobira's regional sales were
vastly improved, but Nokia was still limited to OEM production on the international market; Nokia
and Tandy Corporation, of the United States, built a factory in Masan, South Korea, to manufacture
mobile telephones. These were sold under the Tandy name in that company's 6,000 Radio Shack
stores throughout the United States.
In 1986, eager to test its ability to compete openly, Nokia chose the mobile telephone to be the
first product marketed internationally under the Nokia name; it became Nokia's 'make or break'
product. Unfortunately, Asian competitors began to drive prices down just as Nokia entered the
market. Other Nokia products gaining recognition were Salora televisions and Luxor satellite dishes,
which suffered briefly when subscription programming introduced broadcast scrambling.
The company's expansion, achieved almost exclusively by acquisition, had been expensive. Few
Finnish investors other than institutions had the patience to see Nokia through its long-term plans.
Indeed, more than half of the new shares issued by Nokia in 1987 went to foreign investors. Nokia
moved boldly into Western markets; it gained a listing on the London exchange in 1987 and was
subsequently listed on the New York exchange.
Crises of Leadership, Profitability in the Late 1980s and Early 1990s
Nokia's rapid growth was not without a price. In 1988, as revenues soared, the company's profits,
under pressure from severe price competition in the consumer electronics markets, dropped.
Chairman Kari Kairamo committed suicide in December of that year; not surprisingly, friends said it
was brought on by stress. Simo S. Vuorileto took over the company's reins and began streamlining
operations in the spring of 1988. Nokia was divided into six business groups: consumer electronics,
data, mobile phones, telecommunications, cables and machinery, and basic industries. Vuorileto
continued Kairamo's focus on high-tech divisions, divesting Nokia's flooring, paper, rubber, and
ventilation systems businesses and entering into joint ventures with companies such as Tandy
Corporation and Matra of France (two separate agreements to produce mobile phones for the U.S.
and French markets).
In spite of these efforts, Nokia's pretax profits continued to decline in 1989 and 1990, culminating
in a loss of US$102 million in 1991. Industry observers blamed cutthroat European competition, the
breakdown of the Finnish banking system, and the collapse of the Soviet Union. But,
notwithstanding these difficulties, Nokia remained committed to its high-tech orientation. Late in
1991, the company strengthened that dedication by promoting Jorma Ollila from president of
Nokia-Mobira Inc. (renamed Nokia Mobile Phones Ltd. the following year) to group president.
Leading the Telecommunications Revolution: Mid-1990s and Beyond
Forbes's Fleming Meeks credited Ollila with transforming Nokia from 'a moneylosing hodgepodge of
companies into one of telecommunications' most profitable companies.' Unable to find a buyer for
Nokia's consumer electronics business, which had lost nearly US$1 billion from 1988 to 1993, Ollila
cut that segment's workforce by 45 percent, shuttered plants, and centralized operations. Having
divested Nokia Data in 1991, Nokia focused further on its telecommunications core by selling off its
power unit in 1994 and its television and tire and cable units the following year.
The new leader achieved success in the cellular phone segment by bringing innovative products to
market quickly with a particular focus on ever-smaller and easier-to-use phones featuring sleek
Finnish design. Nokia gained a leg up in cellphone research and development with the 1991
acquisition of the United Kingdom's Technophone Ltd. for US$57 million. The company began selling
digital cellular phones in 1993.
Ollila's tenure brought Nokia success and with it global recognition. The company's sales more than
doubled, from Fmk 15.5 billion in 1991 to Fmk 36.8 billion in 1995, and its bottom line rebounded
from a net loss of Fmk 723 million in 1992 to a Fmk 2.2 billion profit in 1995. Securities investors
did not miss the turnaround: Nokia's market capitalization multiplied ten times from 1991 to 1994.
In late 1995 and early 1996, Nokia suffered a temporary setback stemming from a shortage of chips
for its digital cellular phones and a resultant disruption of its logistics chain. The company's
production costs rose and profits fell. Nokia was also slightly ahead of the market, particularly in
North America, in regard to the shift from analog to digital phones. As a result, it was saddled with
a great number of digital phones it could not sell and an insufficient number of analog devices.
Nevertheless, Nokia had positioned itself well for the long haul, and within just a year or two it was
arch-rival Motorola, Inc. that was burdened with an abundance of phones it could not
sell&mdashålog ones&mdash Motorola was slow to convert to digital. As a result, by late 1998,
Nokia had surpassed Motorola and claimed the top position in cellular phones worldwide.
Aiding this surge was the November 1997 introduction of the 6100 series of digital phones. This line
proved immensely popular because of the phones' small size (similar to a slim pack of cigarettes),
light weight (4.5 ounces), and superior battery life. First introduced in the burgeoning mobile
phone market in China, the 6100 soon became a worldwide phenomenon. Including the 6100 and
other models, Nokia sold nearly 41 million cellular phones in 1998. Net sales increased more than
50 percent over the previous year, jumping from Fmk 52.61 billion (US$9.83 billion) to Fmk 79.23
billion (US$15.69 billion). Operating profits increased by 75 percent, while the company's
skyrocketing stock price shot up more than 220 percent, pushing Nokia's market capitalization from
Fmk 110.01 billion (US$20.57 billion) to Fmk 355.53 billion (US$70.39 billion).
Not content with conquering the mobile phone market, Nokia began aggressively pursuing the
mobile Internet sector in the late 1990s. Already on the market was the Nokia 9000 Communicator,
a personal all-in-one communication device that included phone, data, Internet, e-mail, and fax
retrieval services. The Nokia 8110 mobile phone included the capability to access the Internet. In
addition, Nokia was the first company to introduce a cellular phone that could be connected to a
laptop computer to transmit data over a mobile network. To help develop further products, Nokia
began acquiring Internet technology companies, starting with the December 1997, US$120 million
purchase of Ipsilon Networks Inc., a Silicon Valley firm specializing in Internet routing. One year
later, Nokia spent Fmk 429 million (US$85 million) for Vienna Systems Corporation, a Canadian firm
focusing on Internet Protocol telephony. Acquisitions continued in 1999, when a further seven deals
were completed, four of which were Internet-related. Meanwhile, net sales increased a further 48
percent in 1999, while operating profits grew by 57 percent; riding the late 1990s high tech stock
boom, the market capitalization of Nokia took another huge leap, ending the year at EUR 209.37
billion (US$211.05 billion). Nokia's share of the global cellular phone market increased from 22.5
percent in 1998 to 26.9 percent in 1999, as the company sold 76.3 million phones in 1999.
Nokia's ascendance to the top of the wireless world by the end of the 1990s could be traced to the
company being able to consistently, over and over again, come out with high-margin products
superior to those of its competitors and in tune with market demands. The continuation of this
trend into the 21st century was by no means certain as the increasing convergence of wireless and
Internet technologies and the development of the third generation of wireless technology (which
followed the analog and digital generations and which was slated to feature sophisticated
multimedia capability) were predicted to open Nokia up to new and formidable competitors.
Perhaps the greatest threat was that chipmakers such as Intel would turn mobile phones into
commodities just as they had previously done with personal computers; the days of the $500 Nokia
phone were potentially numbered. Nevertheless, Nokia's 25 percent profit margins were enabling it
to spend a massive US$2 billion a year on research and development and continue to churn out
innovative new products, concentrating on the various standards being developed for the third
generation wireless networks.
Principal Subsidiaries: Nokia Matkapuhelimet Oy; Nokia Mobile Phones Inc. (U.S.A.); Nokia
Networks Oy; Nokia GmbH (Germany); Nokia UK Limited; Nokia TMC Limited (South Korea); Beijing
Nokia Mobile Telecommunications Ltd. (China); Nokia Finance International B.V. (Netherlands).
Principal Operating Units: Nokia Networks; Nokia Mobile Phones; Nokia Venture Organization;
Nokia Research Center.
Principal Competitors: Alcatel; Telefonaktiebolaget LM Ericsson; Harris Corporation; Kyocera
Corporation; Lucent Technologies Inc.; Matsushita Communication Industrial Co., Ltd.; Mitsubishi
Electric Corporation; Motorola, Inc.; NEC Corporation; Nortel Networks Corporation; Oki Electric
Industry Company, Limited; Koninklijke Philips Electronics N.V.; Pioneer Corporation; Qualcomm
Incorporated; Robert Bosch GmbH; Samsung Group; Sanyo Electric Co., Ltd.; Siemens AG; Sony
Corporation; Tellabs, Inc.; Toshiba Corporation.

Nokia losing market share is no big news, but its a big news when the story is happening
in India or any other emerging market, where Nokia always had a strong hold.

We earlier shared a report by IDC India on the growth of mobile sales in India (for 2009)
and some of the key numbers from the report were:
 Nokia market share in India fell from 56.2% share in 2008 to 54.1% in 2009.
 Local players have grabbed 17.5% market share [from 0.9%, a year back]
 Only 5 local manufacturers in 2008 and the number stands at 28 now!
 Samsung’s share rose marginally to 9.7% from 9.5%
Nothing much has changed in 2010 and here are the latest figures (comparison between
‘08-09 and ‘09-10, from Voice&Data)

 Nokia market share dipped from 64% in ‘08-09 to 52.2% in ‘09-10.

 Samsung gained the market share – 10% to 17.4% in ‘09-10.
 LG’s market share increased marginally from 4.5% to 5.9%.
 Losers include Sony Ericsson (market share fell from 6% to 3%), Motorola (3.5%
to 1%), ZTE (5.6% to 1.9%).
 Micromax has been one of the major winners, from nothing to 4.1% [drive by
huge advertising during IPL].
 Karbonn’s market share too increased to 3%  – via
As per Industry estimates, 108 million mobile phones were sold in the country in 2009-
10, 

Nokia’s revenue too fell from Rs16,567 crore to Rs14,100 crore and the company is now
betting big on services like messaging, life tools and digital music.

Quick snapshot of Nokia’s presence in India

 Launched 22 devices during FY 2009-10 (Nokia N8,N9..How many phones will

Nokia Launch to combat an iPhone?)
 45% of its 2 lakh retail outlets are in the rural areas
 Crossed production of 350 mn handsets in April 2010
In India, Nokia is betting big on life tools products even though the company seems to be
losing the smartphone war.

We have been quite vocal in talking about the loss of strategy at Nokia and even though
the above market share numbers need not be truly correct, the writing is on the wall.

Not just market share, Nokia is losing mind share too and is desperately looking for 1100
magic (Nokia enters Dual SIM Phone Market with C2).
What’s your take on Nokia? Is it ‘cool‘ to own a Nokia phone these days
India, with its 706.69 million mobile phone subscribers, has become a battle ground for handset
manufacturers.

NOKIA STATEGIES
Nokia’s mission is simple, Connecting People.
Our strategic intent is to build great mobile products.
Our job is to enable billions of people everywhere to get more of life’s opportunities through mobile.
News - new strategy, new leadership, new operational structure
 Nokia has recently outlined its new strategic direction, including changes in leadership and operational structure
to accelerate the company’s speed of execution in a dynamic competitive environment.

Major elements of the new strategy include:

 Plans for a broad strategic partnership with Microsoft to jointly build a new winning mobile ecosystem.
 A renewed approach to capture volume and value growth to connect ”the next billion” to the Internet in
developing growth markets
 Focused investments in next-generation disruptive technologies
 A new leadership team and organizational structure with a clear focus on speed, results and
accountability
“Nokia is at a critical juncture, where significant change is necessary and inevitable in our journey forward,” said
Stephen Elop, Nokia President and CEO. “Today, we are accelerating that change through a new path, aimed at
regaining our smartphone leadership, reinforcing our mobile device platform and realizing our investments in the
future.”

The strategy
Nokia’s strategy is about investing in and ensuring Nokia’s future. “I have incredible optimism 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,” Elop said. “We are going forward. We are not
going backwards. We have a strategy. We have a path. We have a future. And we can deliver great mobile
products. And despite all of these changes, we remain true to our mission, that of Connecting People.”

Regaining our leadership in the smartphone space

Nokia plans to form a broad strategic partnership with Microsoft to jointly build a global ecosystem that creates
opportunities beyong anything that currently exists. It brings together highly complementary assets and
competences. The Nokia-Microsoft ecosystem targets to deliver differentiated and innovative products with
unrivalled scale in product breadth, geographical reach, and brand identity.

Nokia would adopt Windows Phone as its primary smartphone platform, helping drive and define the future of the
platform by leveraging its expertise on hardware optimization, software customization, and language support.
Nokia and Microsoft would also combine services assets to drive innovation. Nokia Maps, for example, would be
at the heart of key Microsoft assets such as Bing and AdCenter, and Nokia’s application and content store would
be integrated into Microsoft Marketplace. Under the proposed partnership, Microsoft would provide developer
tools, making it easier for application developers to leverage Nokia’s global scale.

While Nokia transitions to the Windows Phone platform, Symbian will continue to offer considerable value to
Nokia, to our customers, developers and consumers. 200 million people use Symbian globally, and Nokia will
modernize the platform through investments in completely new devices with new features, hardware
improvements such as GHz+ processing capabilities and significantly increased graphics speed, as well as
software improvements.

Maintaining our volume and value leadership in the mobile phones

space
In feature phones, Nokia’s strategy is to leverage its innovation and strength in growth markets to connect the
next billion people to their first Internet and application experience. By providing compelling and affordable,
localized mobile experiences, particularly to the emerging markets, our ambition is to bring the next billion online.
We will continue the renewal of our Series 40 platform in QWERTY, touch&type, dual SIM, Nokia services,
including Maps, Browser, Life Tools, Web apps and Money. We are also investing in the future; developing
assets (platform, software, apps), which will bring a modern mobile experience to the mobile phone consumers
and enable business opportunities for developers. These investments will be especially focused on growth
economies.

Sustaining our future as the world’s leading mobile manufacturer

To make sure we get ahead of the game on industry innovation evolution, our MeeGo efforts will transition into
an ongoing long-term market exploration of the next generation of devices, platforms and user experiences.

New leadership team, operational structure and governance to

drive the change in strategy
This new strategy is supported by significant changes in Nokia’s leadership, operational structure and approach.
The renewed governance will expedite decision-making and improve time-to-market of products and innovations,
placing a heavy focus on results, speed and accountability. The new strategy and operational structure are
expected to have significant impact to Nokia operations and personnel.

Traded as OMXNOK1VNYSENOKFWBNOA3

Stephen Elop, who took over as Nokia's chief executive last September, is expected to report a
24 percent drop in underlying earnin (Reuters)
- Nokia is expected to report its
third profit fall in a row as the mobile phone company struggles to
compete against high-end smartphones of Apple and Samsung,
while also losing share at the cheaper end of the market.
gs per share for the October-to-December quarter to 0.19 euros.
The phone market has recovered from a slump in 2009 when the global economic slowdown
dampened demand for the latest gadgets. Demand this year has surged for new smartphones
like iPhone 4 and Samsung's Galaxy S.
Apple said late on Tuesday it sold 16.2 million iPhones in the December quarter, 86 percent
more than a year ago and its highest ever quarterly sales, and said it saw strong demand
continuing.
"Another stellar quarter for the iPhone is a clear sign of demand but Apple's strength will
undoubtedly have had repercussions for others struggling to gain traction in an extremely
competitive and over supplied high-tier segment," said CCS Insight analyst Geoff Blaber.
Nokia has lacked a hit smartphone since the N95, which was launched in 2006, before Apple
entered the cellphone market.
"The N95 was a big hit. Ever since they have struggled," said Canaccord analyst Michael
Walkley. "The new CEO is getting challenged on both ends. They are very much pressured in
the low end of the market."
Nokia's market share in India has halved in just few quarters. The company controls around 30
percent of this vast market, according to research firm Gartner, compared with around 60 percent
market share in the previous year.
"We remain concerned about market share issues in the low-end due to local competition in
emerging markets such as India and Middle East and Africa," said UBS analysts in a note.
One of Nokia's key rivals in the lower end of the market, China's ZTE Corp, saw its phone sales
rising 34 percent last year. In stark contrast, Nokia's sales of basic cellphones slipped slightly in
January-September last year from a year earlier.
WEAKER Q1, OLLILA SUCCESSOR?
Globally, Nokia is expected to have sold 130 million phones in the quarter, only 2 percent more
than a year ago, losing market share to Samsung and Apple.
But despite shrinking market share, Nokia's newer models have seen good demand in the
quarter, analysts said, forecasting on average underlying operating profit margin at Nokia's
phone unit to rise to 11.3 percent, in line with company's 10-12 percent target range.
"Most importantly we see that Nokia's new devices are facing a very robust demand including the
C3 and the N8," said Swedbank analyst Jari Honko, who noted component shortages still
hindered Nokia's shipments in the quarter.

REASONS FOR DECLINE NOKIA MARKET SHARE AND PROFIT

The world's largest mobile handset maker Nokia has suffered a devastating drop in
earnings and market share in the fourth quarter of 2008, blaming its dismal set of figures
on the global downturn

Net sales of €12.662 billion in Q4 2008 was a hefty 19.4% drop on sales for the corresponding
of 2007, with Nokia's bread and butter devices and services business, which includes mobile
handsets, responsible for most of the decline. The number of mobile devices sold for the
quarter - 113.1 million - was down 15% on the previous corresponding quarter.

Devices and services was also responsible for most of a massive 80.3% year on year decline
in operating profit, which dropped from €2.492 billion in Q4 2007 to just €492 million in Q4
2008.

The annual figures did not give much cause for cheer either, with sales of €50.71 billion in
2008 down 0.7% on the previous year and operating profit of €4.966 billion down 37.8% on
2007.

Nokia's dismal set of numbers for the final quarter of 2008 add up to a marked decline in
market share from 40% in Q4 2007 to 37% in 2008.

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Nokia disputes IDC report showing decline in its market

share
New Delhi, Sep 29 (PTI):

Mobile handsets maker Nokia today challenged the findings of a report by research firm
IDC, which said that the Finnish company has drastically lost its market share in India.
"The company highlights serious flaws in the IDC second quarter calendar year 2010 report and
disputes the findings," Nokia said in a statement.
Nokia said, "the IDC report does not include shipments from Nokia's manufacturing facility in
Chennai."

IDC has said that Nokia's share in the Indian cellphone market plunged to 36.3 per cent at the end
of June, from 54 per cent at the end of 2009.
The global cellphone maker also disputed IDC's shipment figures from its Chennai factory. It said
the report's claim that most of the shipments from the Chennai facility were exports was "inaccurate
and untrue".

Instead, the company said, 50 per cent of the production from Chennai is delivered in India and the
facility, Nokia's largest in the world, has to date produced 350 million mobile handsets.

Nokia said it continues to do well in India across all segments on the back of exciting new products
such as the Nokia 2690 for the entry segment.
"We believe IDC's starting point for estimating the Indian market is incorrect –- shipments are not
equivalent to actual sales and market shares," Nokia said.
 According to IDC, the dual-sim category accounted for 38.5 per cent of the overall market.
"As per our estimates the dual-sim segment represents 22 per cent of the Indian handset market
currently," Nokia said.

The report further says that there are a total of 35 brands in the Indian market currently.
Nokia says that while the report lists only 35 brands in the Indian market, in reality there are
anywhere between 80 to 100 players operating at any given point of time. Most of these are
Chinese handset players, which are operational in the market sporadically.

Nokia market strategy need a change

NO DOUBT THAT the products from the Finnish company, Nokia, are some of the very best in the world,
but the company still hasn’t found a profitable way to market its goods. The very reason that other
mobile phone companies are fast eating up Nokia’s market share is their superior (yet simple) marketing
practices.
 
Motorola and Samsung must now be in the FUW (frequently used words) list in Nokia’s board meetings.
These companies have made Nokia pay dearly for its rudimentary approach in marketing its phones. The
aggressive marketing practices followed by Motorola have hit Nokia very hard and it is losing very crucial
global market share every month to its American competitor.
 
Nokia, quite alarmed by the dropping sales of its phones, is now putting all its weight behind the N-
Series range. The N-Series is packed with multimedia features and Nokia believes that these phones
might woo the costumers back to the big daddy of the mobile phone world. But Espoo, we have a
problem!! (Nokia is headquartered at Espoo, Finland).
 
While Motorola (quite intelligently) gives a dashy-flashy name to every phone it brings into the market,
Nokia tends to do the exact opposite. Nokia from the very start has relied on numbers rather than
names. This strategy worked very well in the past, but only because there wasn’t much competition back
then. But times have changed. Every month the market sees at least a dozen new handsets from an
equal number of manufacturers. Consumers now have more than they can choose.
 
Consumers are more attracted by names because they can thus easily relate to the features of the
phone. This is evident from the success of the MotoRazr, MotoSlvr, MotoRizr and MotoKrzr. These
phones are not packed with heavy multimedia features like the N-Series; still they are selling like hot
cakes. Just by reading the name of the handset, one gets a broad idea what the phone looks like or
what its features are.
 
Nokia advertises more than Motorola. Still its market share is dropping. Motorola does not need to spend
much money for the promotion of its products and it doesn’t have to worry about the marketing of these
phones; it just simplifies its job by naming its products right. Take the example of Apple. It did not have
to do much to promote its iPhone. Thanks to the leaked photos and technical specifications, it became
the most anticipated gadget of all times.

It is high time that Nokia starts applying some common sense to its marketing strategies. It doesn’t
have to do anything great, other than just naming its phones. A few months ago, a highly placed Nokia
official told Reuters that his company would soon go the Motorola way and start using names for its new
phones. It is in Nokia’s best interest that it takes to this path as early as possible, otherwise the once
market leader might see its market share plummeting to even lower depths.