At the company's annual mid-year strategy update in Finland on Wednesday, Nokia top management reiterated its belief in the long-term growth opportunities of the mobile industry.
While general economic uncertainties continue to impact demand, Jorma Ollila, Chairman and CEO, said Nokia believes the market was capable of growing volumes for 2003 by approximately 10%, up from the 405 million units in 2002. The company also raised its estimate for the total number of mobile subscriptions to reach 1.6 billion by the end of 2005.
Mobilizing imaging, games and enterprise
As mobility expands into new business areas like imaging, games and enterprise, Nokia believes the opportunities for value creation increase markedly.
In imaging, camera phones are now being positioned across the mobile market from low to high-end products, with volumes estimated to surpass digital still camera market volumes by the middle of 2003. Nokia has already announced five different camera phones with more to follow in the second half of this year. In order to drive up penetration, the company is also working to bring the integrated camera feature as quickly as possible to lower priced mobile devices.
In entertainment, Nokia sees mobility as the next big thing for the USD 30 billion games market. The Nokia N-Gage, scheduled to be available globally on October 7, will bring on-line and multiplayer games to consumers, independent of time and place.
Mobilization of enterprise processes also presents a big opportunity to expand Nokia's product range. In Europe alone, 50 million mobile professionals already spend at least one day per week outside the office.
Nokia to ship first WCDMA phones
In next generation technologies, the company today reconfirmed the availability of the Nokia 6650 GSM/WCDMA mobile phone to selected operators within this month. During the past 12 months, Nokia has conducted the mobile industry's largest ever field pilot and testing program, using close to 20,000 Nokia 6650 phones in practically every WCDMA network in the world.
Nokia Networks targets WCDMA market leadership
At Nokia Networks, previously announced restructuring continues as planned. The division is moving towards a more focused, flexible organization that reflects current operator spending levels, while matching management objectives of increased market share, sustainable profitability and higher product and process quality.
The company sees strong opportunities in mobile voice, mobile data and the substitution of fixed to mobile infrastructure. In WCDMA, Nokia has already gained more than 30% of the market and currently leads the industry in WCDMA deployment, with over 20,000 base stations shipped globally. Nokia believes it is well on track to achieving its targeted 35% market share in WCDMA networks.
Nokia long-term target to lead CDMA market
In line with Nokia's long-term target to become the leading CDMA mobile device manufacturer globally, the company has already launched seven new 1X products this year. The positive effects of this expanding product range, combined with closer collaboration with CDMA carriers, has enabled Nokia to see an increase in CDMA market share during the second quarter.
The recent announcement with STMicroelectronics (STM) and Texas Instruments (TI) to offer a joint CDMA chip set was also an important step in building a more balanced CDMA business system. In combining their CDMA expertise, the companies will provide new opportunities for handset vendors and carriers, while bringing greater economies of scale to the CDMA market overall.
Nokia makes positive developments in China and India
In China, the company continues to focus on growing market share and leveraging the strong Nokia brand preference there. This year, Nokia has already seen its market share position stabilize. This largely reflects substantial improvements in Nokia's China distribution system as well as continued localization of its mobile phone product portfolio. The recently launched Nokia 6108, a pen-based messaging device designed for texting in Chinese, is a good example of a locally relevant product.
Building a strong presence in CDMA is also an important factor in increasing overall market share in China and India. As previously announced, Nokia last week received an official license to manufacture and market CDMA phones in China. Sales are expected to start during the second half of this year.
Nokia sees market share gains during 2Q in the US
In the US, Nokia is targeting clear leadership, with a primary focus on increasing and sustaining market share gains across all trade customers and all technologies. During the first half, the company has already launched 17 new phones to the Americas market. Early indications in the second quarter point towards significant market share gains in the US market.
It should be noted that certain statements herein which are not historical facts, including, without limitation, those regarding A) the timing of product deliveries; B) our ability to develop and implement new products and technologies; C) expectations regarding market growth and developments; D) expectations for growth and profitability; and E) statements preceded by "believe," "expect," "anticipate," "foresee" or similar expressions, are forward-looking statements. Because these statements involve risks and uncertainties, actual results may differ materially from the results that we currently expect. Factors that could cause these differences include, but are not limited to: 1) developments in the mobile communications market including the continued development of the mobile phone replacement market and the timing and success of the roll-out of new products and solutions based on 3G and subsequent new technologies; 2) demand for our products and solutions; 3) the development of the mobile software and services market in general; 4) the availability of new products and services by network operators; 5) market acceptance of new products and service introductions; 6) the intensity of competition in the mobile communications market and changes in the competitive landscape; 7) the impact of changes in technology; 8) general economic conditions globally and in our most important markets; 9) pricing pressures; 10) consolidation or other structural changes in the mobile communications market; 11) the success and financial condition of the Company's partners, suppliers and customers; 12) the management of the Company's customer financing exposure; 13) the success of our product development; 14) our success in maintaining efficient manufacturing and logistics as well as high product quality; 15) the ability of the Company to source quality components and research and development without interruption and at acceptable prices; 16) our ability to have access to the complex technology involving patents and other intellectual property rights included in our products and solutions; 17) inventory management risks resulting from shifts in market demand; 18) fluctuations in exchange rates, including, in particular, the fluctuations between the euro, which is our reporting currency, and the US dollar and the Japanese yen; 19) the impact of changes in government policies, laws or regulations; as well as 20) the risk factors specified on pages 11 to 18 of the Company's Form 20-F for the year ended December 31, 2002.
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