VMS3.info FEATURE ARTICLE

Subject: May 2003 VMS3.info: Nokia Analyzed via the Value Framework™
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Summary - Nokia "Connecting People
The industry of wireless communications changed and evolved throughout the 1990's and it continues to evolve in 2003. In the future, we will see a rapid increase in the many different segments of the wireless communications industry, for which Nokia plans to be the leader.

Nokia is more than a supplier of mobile phones-it is one of the industry leaders in wireless communications. It continues to launch new multi-media products and servicesthat has helped it to successfully capture market share and profitability. Nokia Mobile Phones and Nokia Networks, two of the main business divisions of Nokia, have strengthened its position in the mobile phone and mobile network markets. Nokia Mobile Phones has been a leader and innovator of a wide array of products and applications, while Nokia Networks has delivered 3rd Generation networks by finding and capitalizing on opportunities in new geographic regions.

The Nokia brand name is associated with well-designed, high quality, and technologically advanced products and user-friendly customer services. To keep a strong brand name and to be the preferred provider of mobile communication products and solutions, Nokia has invested considerable resources in cost efficient processes and has fully committed to strong growth, profitability, and a responsible industry leadership.

Nokia has continued to provide cutting-edge technology and with the help of other mobile communication service companies, like Bluetooth and Symbian, it is committed to expanding and innovating the industry. Other alliances with Cingular Wireless and J-Phone have increased its position in the mobile networks business. Nokia Networks continues to concentrate on expanding globally and coming up with network and connectivity solutions of the highest quality, flexibility, and variety of services that will serve the needs of its consumers.

Strategy Deployed
During the 1990's, the mobile phone industry increased rapidly as voice communication became wireless. During this time, Nokia became one of the industry leaders. Today, mobile phone service sales have begun to slow down, while the industry prepares for new multi-media products and services.

In 2002-03, Nokia is one of the world's leaders in wireless communications and is the world's largest mobile phone producer. In the future, Nokia plans to enter different parts of the communication industry. Nokia consists of many departments concentrating on different areas of the communications industry. Its two main departments are Nokia Mobile Phones and Nokia Networks. In 2001, Nokia Mobile Phones made up an average of 76% of Nokia's net sales, while Nokia Networks made up an average of 22% of Nokia's net sales. A smaller department called Nokia Ventures Organization represents the last 2% of Nokia's net sales.

For the fourth consecutive year, Nokia Mobile Phones has increased it market share at 37%. This is double its market share from 1997. Nokia Networks has also become a stronger player in the wireless network department by growing and expanding as operators in new geographic regions have chosen to use its new 3G network. Nokia Ventures Organization main goal is to create and develop new business ideas outside of the company's current activities. The Nokia Research Center concentrates on corporate research and product development.

Nokia Mobile Phones concentrates on staying the world's largest mobile phone producer by continuously releasing a robust product list that covers all consumers' needs. It continues to concentrate on strong brand, logistics, and new product development. While Nokia Networks deals with mobile, broadband and IP networks, and other related services.

Strategy Managed
The main goal for Nokia is to strengthen its position as a leading systems and products provider. It plans to influence wireless communications and create personalized communication technology as a trusted brand. While the mobile phone industry has begun to slow, it has opened a new range of wireless services. Nokia plans to create and develop in all areas of wireless services.

With the recent co-development of an operating system for future Symbian terminals, Nokia continues to contribute to the development of products and systems. Moreover, it has also helped by contributing to short-range wireless connectivity in collaboration with Bluetooth and has helped develop wireless LANs for enabling local mobility in fixed LANs. Additionally, Nokia has also established several alliances with other service providers. These alliances help make mobile access to various services easier for the end user.

The strategy for Nokia Mobile Phone is to keep growing while being profitable. This strategy is broken down into three main goals:

Nokia Networks strategy is based on three areas: growth, efficiency, and profitability. The challenge is to manage short-term market developments cost-effectively without compromising long-term future investments. Its main challenge is to develop network and connectivity solutions that will help operators to serve its customers better. In addition to its progress with the 3G network-though which it has become the first 3G vendor to begin shipping EDGE network equipment in volumes-it has also strengthened its position throughout the world by winning deals with high profile operators in the US and Japan. In the US, Nokia won the largest systems deal ever with Cingular Wireless. The GSM/EDGE deal is valued at well over 1 billion USD. It has also reached an agreement with AWS, a US operator, which makes Nokia Networks a leader in the rapidly expanding GSM/EDGE network infrastructure market. In Japan, J-Phone has chosen Nokia to supply its 3G networks.

The Nokia Ventures Organization basic goal is to help business development so Nokia can expand into new business areas. They develop ideas that are taken in by Nokia Mobile Phones and Nokia Networks. Nokia Internet Communications and Nokia Home Communications are two ventures that have developed into sizeable businesses. Nokia Internet Communications enables companies to send and receive information while conducting business safely, reliably, and quickly, while Nokia Home Communications deals with trying to establish an open standard for home entertainment based on Internet technologies. The Nokia Research Center is a very important part of the company. In a high-tech industry, like wireless communications where change is constant, an R&D department is critical for success. Its main strategy is to work with all the departments to develop new concepts, technologies, and applications.

Strategy Evolved
The future challenges for Nokia are:

Despite the slowing sales of mobile phone subscribers, Nokia continues to evolve and provide new multi-media products and services. Its newer products now not only include voice, but also media, imaging, entertainment, and business applications.

In the years ahead, Nokia plans to continuously release new mobile products that will evolve the way the world communicates wirelessly. It also plans to innovate the new mobile services using the 3G networks all around the world. Having alliances with operators around the world is very important in strengthening its position in the global cellular industry. Teaming with other companies to help co-develop is also very important for Nokia to evolve in the wireless communications industry The key to the future of Nokia, and its leadership position in the industry, is being able to offer products other than phones. Offering accessories like the intelligent Bluetooth devices, applications from Nokia.com for different mobile products, and services offered from Club Nokia provides a diverse selection for all consumers in the wireless communication industry.

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