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Nokia

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UBS Investment Research Nokia
Here we go again…
Following negative pre-announcement we downgrade from Buy to Neutral We believe the main issue behind Nokia’s profit warning has been increased pricing pressure in the high-end due to lack of competitive product. We believe investors will be unwilling to put faith in the execution on new devices. We downgrade to Neutral and will revisit when visibility emerges on new products. Do risks still remain on lowered expectations? To reach low-end of FY margin guidance, Nokia requires >34% GM or c.460bps seq improvement in Q4 which appears challenging. To achieve our 2010E revenue we estimate new high-end devices will need to contribute c.€1.3bn in H2 or >4m units. Given the magnitude of improvement required, lack of reassurance on new products, and increased competition, we believe downside risks still exist. Has value now emerged? On a one-year reverse DCF, current price implies 0% rev growth in perpetuity at 4m of incremental volumes. Alternatively, overall volumes will have to be significantly better than expected.

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Table 2: Nokia Devices – volumes (m) by category
Volumes (m) N series E series X series C series 5000 series Other smartphones Converged Devices FY '09 18.9 18.5 0.0 0.0 17.2 13.2 67.8 Q1 '10 2.9 6.3 1.0 0.0 7.9 3.4 21.5 Q2 '10E 1.5 6.9 1.7 3.2 9.2 3.2 25.7 Q3 '10E 1.4 6.9 2 6.0 8.6 2.8 27.7 Q4 '10E 2.1 7.8 2.2 6.8 6.8 3.0 28.7 FY '10E 7.9 27.9 6.9 16.0 32.5 12.4 103.6

Mid-end Low-end (€30-50) ULC (sub-€30) Mobile Devices Source: UBS estimates

115.0 54.7 194.4 364.0

27.0 12.9 46.4 86.3

24.5 14.0 52.8 91.3

24.0 14.7 55.3 94.0

23.0 12.9 64.7 100.6

98.5 54.6 219.1 372.2

Table 3: Nokia Devices – revenues (€m) by category
Revenues (€m) N series E series X series C series 5000 series Other smartphones Converged Devices FY '09 5,548 2,860 0 0 2,893 1,476 12,777 Q1 '10 895 891 250 0 963 340 3,339 Q2 '10E 427 937 396 332 1,005 294 3,392 Q3 '10E 363 893 435 586 893 242 3,412 Q4 '10E 541 1,000 453 614 681 246 3,535 FY '10E 2,225 3,721 1,534 1,533 3,541 1,123 13,677

Mid-end Low-end (€30-50) ULC (sub-€30) Mobile Devices

7,602 2,587 4,889 15,078

1,709 559 1,058 3,326

1,507 595 1,180 3,282

1,429 611 1,211 3,251

1,355 526 1,389 3,270

6,001 2,291 4,838 13,130

Total Devices & Services % change Source: UBS estimates

27,855 -21%

6,665 8%

6,674 1%

6,663 -4%

6,805 -17%

26,807 -4%

High-end competition continues to increase: With Nokia continuing to take time in launching a competitive high-end smartphone (it’s been three years since the launch of the original iPhone), its competitors have continued rapid development of their platforms. Apple is about to start shipping the iPhone 4 that addresses several of the complaints levelled at the iPhone and Android is seeing continuing strong traction among vendors. We believe the competitive bar is continually being raised, making it more difficult for Nokia to compete at the high end of the market and raising the execution
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risk. Below we highlight the numerous Android device launches from competitors while only one Symbian^3 device has so far been announced and Symbian^4 devices not expected until early 2011 at the earliest.
Table 4: List of recent/upcoming Android launches
Vendor HTC HTC HTC/T-Mobile HTC/Sprint HTC Motorola Motorola Motorola Motorola Motorola Samsung Sony Ericsson Sony Ericsson Sony Ericsson LG LG Google Acer Acer Acer Acer Huawei Huawei Huawei Huawei Dell Dell Kyocera TCL Garmin Asus ZTE ZTE ZTE ZTE Source: Company data Model Legend Desire T-mobile my touch 3G slide sprint Evo 4g Wildfire XT 720/ MOTOROI Backflip Devour Cliq XT / Quech i1 Beam I8520 Xperia X10 Xperia X10 mini Xperia X10 mini pro GT540 (Europe) Ally/Aloha Nexus One Liquid E (upgraded A1) A10 E110 E400 U8800 U8300 U8110 U8100 Aero Smoke Zio M6000 Vodafone 845 A50 Blade Racer Mercury Smooth $529 500 $500 Price $700 $879 Announced Feb-10 Feb-10 May'10 May'10 May'10 Jan-10 Jan-10 Feb-10 Feb-10 Mar'10 Feb-10 Nov-09 Feb-10 Feb-10 Jan-10 Apr-10 Jan-10 Feb-10 Apr-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 May'10 Apr'10 Mar'10 Apr'10 Apr'10 May'10 May'10 May'10 May'10 Launch date Apr-10 Apr-10 Q2'10 June'10 Q3'10 Jan-10 Q1 '10 Mar-10 Q2 '10 Q2 '10 na Q1 '10 Q2'10 Q2'10 Apr-10 May-10 Jan-10 na Mid-2010 Mar-10 Apr-10 Q3 '10 Q2 '10 Q2 '10 Q2 '10 Q2' 10 Q2 '11 Q2' 10 May-10 Q2'10 Q3'10 Q3'10 Q3'10 Aug'10

Sensitivity scenarios on 2011E EPS: If we vary the inputs to our Nokia model to look at the potential downside and upside to 2011E EPS it is clear that with current execution risks there is significant potential downside to 2011. Similarly while the absolute blue-sky scenario suggests significant upside we believe the balance of probability on achieving a combination of market share growth, significant margin improvement and benign ASP decline is rather low.

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Table 5: Scenario analysis for Nokia 2011E EPS
Bear Market units % growth Nokia units % share Nokia ASP % change D&S Revenues Gross margin Opex D&S EBIT D&S EBIT margin EPS Multiple Share Price Source: UBS estimates 1,464 5.0% 469 32.0% 54 -8.0% 26,015 30.0% 5,700 2,104 8.1% 0.39 12 4.7 Base 1,519 8.9% 509 33.5% 54 -8.0% 28,188 30.5% 5,632 2,965 10.5% 0.57 12 6.8 Bull 1,520 9.0% 532 35.0% 56 -5.0% 30,372 32.0% 5,888 3,831 12.6% 0.75 12 8.9

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Forecast Changes
As shown in the tables below, we have lowered our near-term forecasts in Devices & Services significantly to reflect the new guidance.
Chart 3: Nokia – UBS divisional forecast changes
2010E 28,056 904 12,378 -112 41,226 0.6 New 2011E 28,186 1,000 12,007 -41 41,152 -0.2 2012E 28,526 1,070 12,247 -42 41,801 1.6 2010E 28,999 904 12,378 -113 42,168 2.9 Old 2011E 29,944 1,000 12,007 -43 42,907 1.8 2012E 30,873 1,070 12,247 -44 44,146 2.9 2010E -3.3 0.0 0.0 -2.2 Change % 2011E -5.9 0.0 0.0 -4.1 2012E -7.6 0.0 0.0 -5.3

Devices & services Navteq NSN Other Total Net Sales % change

Devices & services ex specifics margin % Navteq ex PPA margin % NS Networks ex specifics/PPA margin % Other elims EBIT pre specs/PPA margin %

2,830 10.1 215 23.7 194 1.6 -215 3,024 7.3

2,965 10.5 244 24.4 303 2.5 -217 3,294 8.0

3,143 11.0 285 26.6 367 3.0 -218 3,576 8.6

3,546 12.2 215 23.7 194 1.6 -217 3,739 8.9

4,047 13.5 244 24.4 303 2.5 -221 4,374 10.2

4,327 14.0 285 26.6 367 3.0 -223 4,756 10.8

-20.2 0.0 0.0

-26.8 0.0 0.0

-27.4 0.0 0.0

-19.1

-24.7

-24.8

Source: UBS estimates

Chart 4: Nokia – UBS forecast changes
2010E 41,226 12,936 31.4 3,849 3,024 7.3 1,846 964 0.49 0.32 3,949 -590 -136 3,003 7.3 3,690 New 2011E 41,152 12,954 31.5 4,117 3,294 8.0 2,188 1,291 0.57 0.31 4,061 -700 -171 2,846 6.9 3,134 2012E 41,801 13,087 31.3 4,427 3,576 8.6 2,520 1,857 0.71 0.32 4,403 -711 -164 2,913 7.0 2,771 2010E 42,168 13,718 32.5 4,602 3738.6 8.9 2,561 1,493 0.64 0.41 4,760 -604 -136 3,614 8.6 4,301 Old 2011E 42,907 14,238 33.2 5,269 4373.7 10.2 3,268 2,090 0.79 0.43 5,243 -729 -173 3,714 8.7 4,273 2012E 44,146 14,586 33.0 5,705 4756.3 10.8 3,900 2,878 1.01 0.46 5,644 -750 -169 3,750 8.5 4,520 2010E -2.2 -5.7 -16.4 -19.1 -27.9 -35.4 -22.4 -22.4 -17.0 -2.3 -0.1 -16.9 -14.2 Change % 2011E -4.1 -9.0 -21.9 -24.7 -33.0 -38.2 -28.2 -28.2 -22.5 -4.1 -1.6 -23.4 -26.6 2012E -5.3 -10.3 -22.4 -24.8 -35.4 -35.5 -29.7 -29.7 -22.0 -5.3 -2.7 -22.3 -38.7

Total Net Sales Gross profit margin % EBITDA pre specifics EBIT pre specifics/PPA margin % PBT pre specifics Net profit ex specifics EPS - diluted pre specifics ex PPA DPS - proposed not paid (/share) Cashflow from ops Capex Capitalised devpt additions FCF - Nokia margin % Net cash (debt)

Source: UBS estimates

Below we highlight our forecast changes against Nokia’s guidance.

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Table 6: UBS forecast changes vs. Nokia guidance changes
Q2 - Old Guidance Industry unit growth Nokia unit market share Nokia value market share D&S revenues D&S EBIT margin €6.7 - 7.2bn 9% to 12% €6.82bn 10.7% low-end/slightly below prior guidance low-end/slightly below prior guidance €6.62bn 8.5% 11% to 13% UBS-e 13.3% 35.0% Q2 - New Guidance UBS-e 13.3% 33.6% 2010 - Old Guidance c.10% flat UBS-e 10.4% 34.3% Guidance c.10% flat 2010 - New UBS-e 10.4% 33.5% 390bps decrease €28.1bn low-end/below prior guidance 10.1%

Slight increase 320bps decrease Slight decrease €29.0bn 12.2%

Source: Company, UBS estimates

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Valuation
After a 10% drop in the share price on the day, and significant under performance over the past year, the natural tendency for analysts is to be positively biased and highlight the deep value the shares now represent. While it is indeed the case that on DCF-based metrics the stock looks attractive, but we believe that it lacks short-term momentum and investors will not be willing to put faith in the execution or success of promised new high-end devices in H2. As the company works through its product transition and potentially management change, we believe the stock is likely to keep drifting lower in the short-term. As a result, we downgrade our rating to Neutral from Buy and will revisit when there is greater visibility on the new products. With the European markets trading on 11.6x 2010E P/E and 9.6x 2011E we believe there is much better value (with structural growth and good yield) elsewhere in the market and indeed in our own sector. We continue to prefer telecom equipment over semis and highlight our preference for Ericsson and Alcatel-Lucent in the short-term – both beneficiaries of a late cycle capex pickup and mix improvement. As such we have lowered our DCF-based fair value to €8.8 (long-term assumptions laid out below) but disconnect our price target from this fair value given the lack of short-term momentum and increased execution risks. Our new price target of €7.2 is based on 6.0x EV/EBITDA. This compares to the sector currently trading on 7.7x with Nokia’s execution risks and arguably lower growth profile warranting this discount. In our DCF, we have lowered our terminal margin assumption for Devices to 9% from 13% previously.
Table 7: DCF assumptions
Revenue growth % Fade start Devices NSN (50%) Navteq Source: UBS estimates 2016 2016 2016 Length 10 10 10 Last -20.6% -17.9% 1.5% End expl. -1.6% 0.0% 5.0% Target 2% 0% 3% EBIT margin % Last 12.5% -3.5% 18.5% End expl. 11.0% 3.0% 28.0% Target 9% 5% 15% Capex/sales % Last 0.9% 1.2% 6.3% End expl. 1.4% 1.8% 6.3% Target 1.5% 1.0% 6.0% WACC 8% 8% 8% Tax rate -25% -25% -28%

What is implied at these levels?

Following the 10% move today following the pre-announcement we have conducted a one year DCF (eliminating any explicit forecasting error beyond 2010) analysis based on our 2010 forecasts to see both what is implied at the current level and provide a sensitivity to various assumptions for terminal EBIT margins and revenue growth. The analysis just looks at the Devices and Services business, taking the value for NSN at €1.9bn (0.3x EV/Sales) and Navteq at €2.5bn (2.7x EV/Sales). This shows that the current share price implies 0% revenue growth in perpetuity at 6% below the MRA. Definition Buy: Stock price expected to rise within three months from the time the rating was assigned because of a specific catalyst or event. Sell: Stock price expected to fall within three months from the time the rating was assigned because of a specific catalyst or event.

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KEY DEFINITIONS Forecast Stock Return (FSR) is defined as expected percentage price appreciation plus gross dividend yield over the next 12 months. Market Return Assumption (MRA) is defined as the one-year local market interest rate plus 5% (a proxy for, and not a forecast of, the equity risk premium). Under Review (UR) Stocks may be flagged as UR by the analyst, indicating that the stock's price target and/or rating are subject to possible change in the near term, usually in response to an event that may affect the investment case or valuation. Short-Term Ratings reflect the expected near-term (up to three months) performance of the stock and do not reflect any change in the fundamental view or investment case. Equity Price Targets have an investment horizon of 12 months. EXCEPTIONS AND SPECIAL CASES UK and European Investment Fund ratings and definitions are: Buy: Positive on factors such as structure, management, performance record, discount; Neutral: Neutral on factors such as structure, management, performance record, discount; Sell: Negative on factors such as structure, management, performance record, discount. Core Banding Exceptions (CBE): Exceptions to the standard +/-6% bands may be granted by the Investment Review Committee (IRC). Factors considered by the IRC include the stock's volatility and the credit spread of the respective company's debt. As a result, stocks deemed to be very high or low risk may be subject to higher or lower bands as they relate to the rating. When such exceptions apply, they will be identified in the Company Disclosures table in the relevant research piece.

Research analysts contributing to this report who are employed by any non-US affiliate of UBS Securities LLC are not registered/qualified as research analysts with the NASD and NYSE and therefore are not subject to the restrictions contained in the NASD and NYSE rules on communications with a subject company, public appearances, and trading securities held by a research analyst account. The name of each affiliate and analyst employed by that affiliate contributing to this report, if any, follows. UBS Limited: Gareth Jenkins; Anuj Krishan. UBS Securities LLC: Maynard J. Um.

Company Disclosures
Company Name 6c, 8, 16 Alcatel-Lucent 15, 16 Ericsson 4, 5, 6a, 6b, 6c, 7, 15, 16 Nokia Reuters ALUA.PA ERICb.ST NOK1V.HE 12-mo rating Short-term rating Neutral Buy Neutral Buy Buy (UR) N/A Price €2.24 SKr86.70 €7.22 Price date 16 Jun 2010 16 Jun 2010 16 Jun 2010

Source: UBS. All prices as of local market close. Ratings in this table are the most current published ratings prior to this report. They may be more recent than the stock pricing date 4. 5. 6a. 6b. 6c. 7. 8. 15. 16. Within the past 12 months, UBS AG, its affiliates or subsidiaries has received compensation for investment banking services from this company/entity. UBS AG, its affiliates or subsidiaries expect to receive or intend to seek compensation for investment banking services from this company/entity within the next three months. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investment banking services are being, or have been, provided. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-investment banking securities-related services are being, or have been, provided. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-securities services are being, or have been, provided. Within the past 12 months, UBS Securities LLC has received compensation for products and services other than investment banking services from this company/entity. The equity analyst covering this company, a member of his or her team, or one of their household members has a long common stock position in this company. UBS AG, its affiliates or subsidiaries has issued a warrant the value of which is based on one or more of the financial instruments of this company. UBS Securities LLC makes a market in the securities and/or ADRs of this company.

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Unless otherwise indicated, please refer to the Valuation and Risk sections within the body of this report.

Alcatel-Lucent (€)
Price Target (€) 15.0 Stock Price (€)

10.0

5.0

0.0 01-Apr-05 01-Apr-06 01-Apr-07 01-Apr-08 01-Apr-09 01-Jan-06 01-Jan-07 01-Jan-08 01-Jan-09 01-Jan-10
01-Jan-10

Buy 2 Neutral 2 Buy Neutral No Rating Short-term Buy Short-term Sell

Source: UBS; as of 16 Jun 2010

Ericsson (SKr)
Price Target (SKr) 200 150 100 50 0 01-Jan-06 01-Jan-07 01-Jan-08 01-Jan-09 01-Apr-05 01-Apr-06 01-Apr-07 01-Apr-08 01-Apr-09 01-Apr-10 01-Oct-05 01-Oct-06 01-Oct-07 01-Oct-08 01-Oct-09 01-Jul-05 01-Jul-06 01-Jul-07 01-Jul-08 01-Jul-09 Stock Price (SKr)

Buy 2 Neutral 2 Neutral Sell No Rating Short-term Buy

Source: UBS; as of 16 Jun 2010

01-Apr-10

01-Jul-05

01-Jul-06

01-Jul-07

01-Jul-08

01-Oct-05

01-Oct-06

01-Oct-07

01-Oct-08

01-Jul-09

01-Oct-09

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Nokia (€)
Price Target (€) 40.0 30.0 20.0 10.0 0.0 01-Apr-05 01-Apr-06 01-Apr-07 01-Apr-08 01-Apr-09 01-Jan-06 01-Jan-07 01-Jan-08 01-Jan-09 01-Jan-10 01-Apr-10 01-Jul-05 01-Jul-06 01-Jul-07 01-Jul-08 01-Oct-05 01-Oct-06 01-Oct-07 01-Oct-08 01-Jul-09 01-Oct-09 Stock Price (€)

Buy 1 Buy 2 Neutral 2 Buy Neutral No Rating Short-term Buy

Source: UBS; as of 16 Jun 2010 Note: On August 4, 2007 UBS revised its rating system. (See 'UBS Investment Research: Global Equity Rating Definitions' table for details). From September 9, 2006 through August 3, 2007 the UBS ratings and their definitions were: Buy 1 = FSR is > 6% above the MRA, higher degree of predictability; Buy 2 = FSR is > 6% above the MRA, lower degree of predictability; Neutral 1 = FSR is between -6% and 6% of the MRA, higher degree of predictability; Neutral 2 = FSR is between -6% and 6% of the MRA, lower degree of predictability; Reduce 1 = FSR is > 6% below the MRA, higher degree of predictability; Reduce 2 = FSR is > 6% below the MRA, lower degree of predictability. The predictability level indicates an analyst's conviction in the FSR. A predictability level of '1' means that the analyst's estimate of FSR is in the middle of a narrower, or smaller, range of possibilities. A predictability level of '2' means that the analyst's estimate of FSR is in the middle of a broader, or larger, range of possibilities. From October 13, 2003 through September 8, 2006 the percentage band criteria used in the rating system was 10%.

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Nokia 17 June 2010

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...issues: Nokia has been one of the best companies who have innovatively grown in the telecommunications industry for a while now but this era has seen to be slowly declining because of how the leader of ‘Nokia’ couldn’t cope up with the ever changing market and demand of consumers leading the shares of Nokia to decline. Nokia’s management wasn’t able to move with the changing of demand and invent new product ideas in the market where their competitors invented and reinvented and overthrew Nokia in just few years. The management didn’t take appropriate feedback from the consumer adjusting to their needs and suggestions. Nokia’s ‘Research and Development’ department is or rather has been inefficient, their jobs were to develop advanced ‘smartphones’ before their competitors. Nokia has been losing market shares and bankrupt due to poor management and a poor R&D team. “Nokia's approach to innovation will require radical changes. This company that achieved so much with its product design skills in the previous decade must develop an entirely new set of innovation skills in order to create, develop, and manage a platform” (Chesbrough, Nokia's real problem: The commodity trap 20122). 2.2 Human Resources Issue: The reason of decline of successful company like Nokia is purely caused by slow, inefficient and deterred people on the “bus”. They have repeatedly been unable to come up with new ideas or be able to enhance their technology in cell phones. The marketing team of Nokia has......

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Nokia

...Nokia Introduction Nokia is the world leader in mobility. They make a wide range of mobile devices, services and software that enable people to go beyond communications to navigation, music, video and more. Nokia is not only the world leader in mobile phones. They are also the world’s largest camera manufacturer and a leader in digital music. Mobility has the power to help economies grow and societies develop. It is changing the world, in developed and developing countries alike. Their vision is to release this potential by extending mobile access and allowing people to do more on their mobile devices. Nokia is a truly global company, headquartered in Finland. They have sales in more than 150 countries. Nokia has worked in partnership with WWF since 2003 to raise environmental awareness among our employees and on other environmental activities. Nokia joined several other major mobile manufacturers in 2007 to sign a voluntary agreement based on the results of the European Commission’s Integrated Product Policy pilot project on mobile phones. The project focused on finding how the mobile phone industry can reduce the environmental impact of its products throughout their lifecycle. The agreement includes three key commitments: • Produce an index of environmental facts for each mobile product to enable consumers to compare products easily. • Increase consumer communications about unplugging the chargers and safe disposal of phones. • Include a default on-screen......

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Nokia

...This article is about the telecommunications corporation. For other uses, see Nokia (disambiguation). Nokia | | Type | Julkinen osakeyhtiö (Public) | Traded as | * OMX: NOK1V * NYSE: NOK | Industry | * Telecommunications equipment * Internet * Computer software | Founded | Tampere, Grand Duchy of Finland (1865) incorporated in Nokia (1871) | Founder(s) | * Fredrik Idestam * Leo Mechelin | Headquarters | Espoo, Finland | Area served | Worldwide | Key people | Risto Siilasmaa (Chairman) Stephen Elop (President & CEO) | Products | * Mobile phones * Smartphones * Mobile computers * Networks * (See products listing) | Services | Maps and navigation, music,messaging and media Software solutions (See services listing) | Revenue |  €38.659 billion (2011)[1] | Operating income |  €−1.073 billion (2011)[1] | Net income |  €−1.164 billion (2011)[1] | Total assets |  €36.21 billion (2011)[1] | Total equity |  €11.87 billion (2011)[1] | Employees | 105,265 (2012)[2] | Divisions | Mobile Solutions Mobile Phones Markets | Subsidiaries | Nokia Siemens Networks(50.1%) Navteq | Website | Nokia.com | Nokia Corporation[3] (Finnish: Nokia Oyj, Swedish: Nokia Abp; Finnish pronunciation: [ˈnokiɑ], English /ˈnɒkiə/) (OMX: NOK1V, NYSE: NOK) is aFinnish multinational communications and information technology corporation headquartered in Keilaniemi, Espoo, Finland.[4] Its principal products aremobile telephones and......

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...Nokia: The Once and Future (?) King This is a case study I found from the Direct Marketing News. Nokia was still very popular when I was home in the summer of 2009; however, it fell down so hard within a short period after the iPhone came on the market. Nokia made the same mistake as Blockbuster when they responded to Netflix when Netflix initially emerged in the DVD market. Nokia did not consider the iPhone as a threat when Apple initially released its iPhone until it was too late to respond on its losing market and fight back to Apple. The reason for this assumption was Nokia claimed that it is too expensive to make an iPhone, and consumers won’t really go after this expensive market (Troianovski & Grundberg, 2012). Nokia was wrong. And now, Nokia is working very hard trying to rebrand itself with its latest smartphones to consumers by using social marketing. In 2011, Nokia created Nokia Gift Machine with the incentive that attendees might win a reward ranging from chocolates to actual Nokia smartphones. The attendees simply just need to check in via Foursquare on the machine. I thought that this was a very innovative promotion idea to target audiences and market its products. Consumers are giving incentive with the rewards and also curious of what the machine can do, in the meantime, they learn its products as well. That was a huge success. Nokia also created a landing page, Switch Hub, for its current users that allows them to post contents with Nokia’s Lumia......

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Nokia

...Strengths, Weaknesses, Opportunities, and Threats Analysis Strengths The strengths that Nokia could be gaining from the acquisition would be total control of the company, acquiring stock for a minimal price and reducing the overall cost. There are also other factors to include with regards to the acquisition. Nokia could block their major competitors with this acquisition and bring in a higher net project through the acquisition. Whether the acquired firm is left independent or dissolved within Nokia operation, the takeover can be a win-win situation. End-to-end solutions. Acquisition of a parallel unit will greatly augment Nokia's Consumer Electronic and Cable manufacturing portfolio and allows it to offer end-to-end manufacturing and warehousing solutions. Dominance over market share. Acquisition can bring in a positive cash flow, untapped lines of credit, and the customer base of the acquired firm. Acquisition also provides added support to N仗Nokia's operations and enhances market share in different aspect. Assets control. Nokia can control more assets for less money through the merger than if it was to acquire those assets any other way. Weaknesses The weaknesses in business acquisitions mostly comes from risk's taken within the merged company or through external factors. As lucrative the deal may be, facing problems are much of reality that Nokia has to encounter. A serious opposition to the merger can be the management, labor unions, the......

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Nokia

... Executive Summary Nokia’s reign as the world’s biggest seller of mobile telephones is under serious threat from its competitors such Apple and the introduction of new Android based mobile phones. The company fell short in the smartphone era and its position as the number-one phone seller in the global market is under threat. The case study provides a brief analysis of what transpired at Nokia and how the strategy implemented by the management team from the period of the 1990s up to the 2010 led to the company losing its market shares at both ends of the mobile phone industry. During the period of 1991 and 1992 the company lost FM482million ($120 million) on its major business activities. In 1992 a new group chief executive, Jorma Ollila was appointed. Jorma Ollila’s mission was to formulate a strategy that was going to rescue the company from its losses, into a profitable organisation. The report focus on Nokia’s reason to select one area of development out of four, the significance of the introduction of new Android software for Nokia’s chosen strategy and the importance of management teams to strategic choice. In dealing with the first section on the study case , the author analysed the three elements of the strategy context used by the management team and then discussed strategic risks associated with focusing on the single development area out of four. Lynch (2012:421) defines strategy context as being concerned with the circumstances surrounding and influencing......

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...Struggling Nokia aims high with low-end phone Bargain-basement handset touted as cash spinner in battle to catch upmarket rivals Tuesday, 30 April, 2013, 5:32am * The Nokia 105 has been released in some Asian markets. As Nokia battles to catch Apple and Samsung Electronics in the market for smartphones costing US$500 or more, it's counting on a bare-bones handset that sells for just US$20 to give it an edge. Priced 97 per cent below the latest iPhone, the Nokia 105 features preloaded games, a colour screen, a radio, a speaking clock and a torch. The phone, Nokia's cheapest, has been available for a few weeks in India and Indonesia and will soon start selling in Europe. Even with its bargain-basement price, the 105 is critical to Nokia's entire handset business. Nokia reported on April 18 that it sold about 11 million fewer mobile phones in the first quarter than analysts had projected, with sales of basic phones plunging 21 per cent to 55.8 million units. A failure to revive the low-end business would leave Nokia without an important source of cash as it seeks to develop challengers to the iPhone and Samsung handsets that run Android. Falling sales of simpler phones were "definitely worrisome", said Mika Heikkinen, a fund manager at FIM Asset Management in Helsinki."They have to get this under control." Nokia chief executive Stephen Elop points to the 105 as a signal that the low-end business can recover after a difficult quarter. While demand for the iPhone...

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Nokia

...Nokia: Nokia Corporation is a multinational communications and information technology corporation (originally a paper production plant) that is headquartered in Espoo, Finland. Its principal products are mobile telephones and portable IT devices. It also offers Internet services including applications, games, music, media and messaging, and free-of-charge digital map information and navigation services through its wholly owned subsidiary Navteq. Nokia owns a company named Nokia Solutions and Networks, which provides telecommunications network equipment and services. As of 2012, Nokia employs 101,982 people across 120 countries, conducts sales in more than 150 countries, and reports annual revenues of around €30 billion. By 2012, it was the world's second-largest mobile phone maker in terms of unit sales (after Samsung), with a global market share of 18.0% in the fourth quarter of that year. Now, Nokia only have 3 per cent market share in smart phones. They lost 40 per cent of their revenue in mobile phones in Q2 2013. Nokia is a public limited-liability company listed on the Helsinki Stock Exchange and New York Stock Exchange. It is the world's 274th-largest company measured by 2013 revenues according to the Fortune Global 500. Nokia was the world's largest vendor of mobile phones from 1998 to 2012. However, over the past five years its market share declined as a result of the growing use of touch screen smart phones from other vendors—principally the iPhone, by Apple,......

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Nokia

...Nokia N8–00 User Guide Issue 1.1 2 Contents Search in your device and on the internet Use your device offline Prolong battery life Personalisation Profiles Change your theme Home screen Organise your applications Telephone Call a phone number Search for a contact Call a contact Make a video call Make a conference call Use speed dial Use your voice to call a contact Make calls over the internet Call the last dialled number Record a phone conversation Turn to silence View your missed calls Call your voice mailbox Divert calls to your voice mailbox or another phone number Prevent making or receiving calls Allow calls only to certain numbers Video sharing Contacts About Contacts Save phone numbers and mail addresses Save a number from a received call or message Contact your most important people quickly Set a ringing tone for a specific contact 31 31 31 33 33 34 34 37 37 37 37 38 38 40 41 41 42 42 43 43 43 44 44 44 45 46 47 47 47 48 48 49 Contents Safety 5 Get started 7 Keys and parts 7 Change the volume of a call, song, or video 9 Lock or unlock the keys and screen 9 Insert or remove the SIM card 10 Insert or remove the memory card 12 Charging 13 Antenna locations 15 Attach the wrist strap 16 Headset 16 Switch the device on or off 16 Nokia account and Nokia's Ovi services 17 Copy contacts or pictures from your old device 17 Device set-up 18 Use the in-device user guide 19 Install Nokia Ovi Suite on your PC Explore Nokia's Ovi internet services Ovi by Nokia About...

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...BIRKBECK UNIVERSITY OF LONDON Marketing Analysis Nokia Gabriel Fernando Scherer The Marketing Challenge - FFMN012H4 Neil Coade 18/11/2014 BRIEF HISTORY Nokia is a Finnish company with over a hundred years of history. When funded in 1871 the company used to produce a range of different products, such as tires, boots and cables. In 1967 Nokia merged with the Finnish Cable Networks and the Finnish Rubber, becoming a company dedicated to telecommunications, and was the first company to lunch a mobile phone in a car in 1982. After 10 years, in 1994 Nokia concentrated itself in the telecommunications with the GSM technology, launching the 2100 series. The company predicted to sell four hundred thousand phones, but the sales reached twenty millions. Nokia became a world leader for the next 10 years, when in 2004 started to lose market quotes, losing 35% of the world market. It’s in 2007 when Apple lunched its first Iphone that the loss of Nokia leadership was consolidated, since there only drops in the market and profits. In 2011 the process of Nokia being bought by Microsoft started and nowadays Nokia Mobile is part of Microsoft group. NOKIA’S VISION AND MISSION Nokia’s vision has been the same for about 20 years and it is simple: Connecting people. Its vision is to transform the whole world in a small village, making possible a small farmer in Africa to connect with the world as well as facilitating the communication of a big CEO in New York. Their......

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...History of company Nokia Company was founded in Finland in year 1865 and was a pioneer manufacturer of pulp and paper. Nokia set up a division to develop design and manufacturing capabilities in data processing, industrial automation, and communications systems in 1967 (Nokia, n.d.). By 1987, Nokia introduced their first handheld phone for GSM, the European standard for digital mobile technology (Fundinguniverse, n.d.). Nokia started to focus on mobile phones and network infrastructure. The world’s most popular phone was launched in year 2003 which is Nokia 1100 (Refer to Image 1.1). The total sales are over 250 million units, even more than iPhone and Samsung Galaxy (Allsopp, 2014). Image 1.1 Nokia 1100 Current Company Previously, Nokia smartphone was used the Symbian operating system and performing well in the global market. Since 2010, Android system and Apple’s iOS were getting into the phone market actively. Nokia made an announcement which switched to the Microsoft Window OS in February 2011 (Nokia, n.d.). After switching to Microsoft operating system, Nokia and Microsoft launched the first Windows Phone 7 which called Lumia in 26 October 2011 (Weber, 2011). The company wish to lead the smartphone market, but when compared to the previous 2 years, the sales was another declines. Nokia net income has shown a negative sign in second-quarter of 2011 to fourth-quarter of 2013, only fourth-quarter of 2012 made profit (Refer to Image 1.2). Image1.2 Nokia Net Profit......

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Nokia

... Company- Nokia Background of the study: Pricing Techniques: are the methods adopted by a firm to set its selling price. It usually depends on the firm's average costs, and on the customer's perceived value of the product in comparison to his or her perceived value of the competing products. Different pricing methods place varying degree of emphasis on selection, estimation, and evaluation of costs, comparative analysis, and market situation. It takes into view factors such as a firm's overall marketing objectives, consumer demand, product attributes, competitors' pricing, and market and economic trends. The term pricing technique is also called cost plus because it attempts to secure the firm against a loss by imbedding marginal and fixed costs into the price consumers pay. The term plus refers to markup, which may ensure some strictly positive profit. If, the firm sets markup = 0, the firm breaks even because the price equals the average total cost. Objective of the study: The objective of the study is to see the different pricing strategies used by Nokia for its different products. Nokia started by making paper – the original communications technology Nokia was founded in 1865 by Fredrik Idestam in Finland as a paper manufacturing company. In 1920, Finnish Rubber Works became a part of the company, and later on in 1922, Finnish Cable Works joined them. All the three companies were merged in 1967 to form the Nokia Group. In the late 1970s, Nokia started......

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Nokia

...Executive Summary Within two decades, Nokia, a company that started as a wood pulp mill in 1967, became a leader in electronics manufacturing. Nokia has a complex supply chain making over 900,000 devices daily with 100 billion components from 60 different suppliers. (Nokia India: Battery Recall Logistics, 2011) During the company’s peak they experienced a defect with one of their batteries that challenged the company is ways they didn’t expect. What they initially thought would be a simple minimal recall of the affected batteries turned into a reverse logistic nightmare that put a strain on their resources. Once the media released the recall and headlined the potential of an exploding battery, Nokia was overwhelmed with requests for replacement batteries. As the company tried to devise a plan for the consumer to check if their battery was affected they ran into many logistic issues on access to internet, inability to deliver replacements due to topography conditions and unnecessary widespread panic. A well-defined media plan and recall process would have aided Nokia in being able to be proactive should a recall situation arise. Background Prior to venturing into the telecommunications industry in 1967, Nokia, named for its location on the banks of Nokianvirta River, was simply a wood pulp mill. The founder, Fredrik Idestam opened this location as a follow-up to his first paper mill near the Tammerkoski rapids in southern Finland. In 1967 Nokia AB, Finnish Rubber Works......

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Nokia

...1.Executive Summary Nokia is one of the world’s largest cell phone companies who follow a particular customer driven marketing strategy, which can be considered as a model for other company. Nokia segmented the market of world according to their economic condition and then try to targeting as much as they can. Suppose, Nokia itself launch varieties models of mobiles at varieties prices and positioning itself as more for more, the same for less and less for much less. They also try to bring their product differentiation, service differentiation provide new classic models, features and long lasting batteries. We hopefully say that, this particular customer driven marketing strategy should be widely followed to achieve the unified whole. 2.Introduction The company I have chosen to analyze in my assignment is the mobile phone giant Nokia. This assignment tells us briefly what Nokia actually is, its Customer driven marketing strategy, how they create value for target customer view on the size and sales of the company and also the Various Market segmentation Strategies, target market strategies and differentiation and positioning their products to desired market with customer satisfaction. Since January 2004, Nokia Group has consisted of four different business groups: Mobile Phones, Multimedia, Enterprise Solutions and Networks. “In addition, there are two horizontal groups that support the mobile device business groups: Customer and Market Operations and Technology......

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