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Nokia Expects 4 Billion Mobile Phone Subscribers in 2009

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At its annual investor event today, Nokia has presented key targets and forecasts for the next one to two years, while senior company executives described how Nokia's advantages as the leading device company underpin its strategic move into Internet services.

In his keynote address, Nokia President and CEO Olli-Pekka Kallasvuo said: "We have made great strides in strengthening Nokia's device portfolio over the past year. The improvements we've made have driven the profitable growth and market share gains Nokia has enjoyed in 2007, and we aim to continue the good momentum in our device portfolio next year."

Speaking about Nokia's opportunities in Internet services, Kallasvuo said: "Nokia's goal is to be the world #1 in bringing the Internet to mobile devices. We estimate that in 2010, the total Internet services market will be approximately 100 billion euros."

In brief:

Nokia financial targets (excluding special items, purchase price accounting, and the pending acquisition of NAVTEQ)

  • Nokia Group operating margin of 16-17% targeted within the next one to two years. This target is revised from the one to two year 15% operating margin target Nokia gave in November 2006.
  • Nokia Devices & Services operating margin targeted to be approximately 20% during the next one to two years.* (see reconciliation below).
  • Nokia Siemens Networks' target operating margin increasing to 10% by the end of 2009.
  • Nokia targets an improvement in the ratio of Nokia Group gross margin to R&D expenses and an improvement in the ratio of Nokia Group gross margin to sales and marketing expenses in 2008, compared to 2007.

Targets and forecasts for Nokia and the industry

Nokia expects:

  • Industry mobile device volumes in 2008 to grow approximately 10% from the approximately 1.1 billion units Nokia estimates for 2007.
  • Industry mobile device volume growth in 2008 to be above 15% in Asia-Pacific, China and Middle East & Africa, and below 10% in North America, Europe and Latin America.
  • Nokia expects the device industry to experience value growth in 2008, but expects some decline in industry Average Selling Prices (ASPs) primarily reflecting the increasing impact of the emerging markets and competitive factors in general.
  • The four billion mobile subscriptions mark to be reached in 2009, rather than in 2010 as previously forecasted.
  • The converged device market to reach approximately 120 million units in 2007 and 180 million units in 2008.
  • To ship approximately 200 million Nokia devices with an integrated digital camera in 2007 and more than 250 million units in 2008.
  • To ship approximately 145 million Nokia music-enabled devices in 2007 and more than 180 million units in 2008.

Nokia and Nokia Siemens Networks forecasts and targets for the infrastructure market and Nokia Siemens Networks

  • Nokia expects very slight growth for the mobile and fixed infrastructure and related services market in euro terms in 2008.
  • Nokia Siemens Networks aims to grow faster than the market in 2008.

* Devices & Services is not comparable to the current definition of "Devices", consisting of Mobile Phones and Multimedia combined, but is based on what will be the reportable business segment under our new organizational structure starting January 1, 2008. Devices & Services will be comprised of the totality of the existing Mobile Phones, Multimedia and Enterprise Solutions business groups - and will also include expenses previously reported under "Common Group Functions". A comparable figure for Devices & Services operating margin for the period Q1-Q3 2007 was approximately 19%.

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Tags: nokia siemens networks  olli-pekka kallasvuo