25 January 2008

Nokia Q1 2008 Results
Profitability strong for the quarter
operating profit up 39% year on year

Based on our preliminary market estimate, Nokia's market share for the first quarter 2008 was 39%, compared with 36% in the first quarter 2007 and 40% in the fourth quarter 2007.

Our year on year market share increase was driven primarily by our strong position in the fastest growing markets globally and by strong share gains in Latin America, Asia-Pacific, China and to a lesser extent in Europe.

Our market share decreased significantly year on year in North America. Our market share in Middle East & Africa was approximately at the same level year on year.

We had strong sequential market share gains in Latin America. Our market share decreased significantly sequentially in Middle East & Africa and North America and to a lesser extent in Europe and Asia-Pacific. Our market share in China was approximately at the same level sequentially.

Our device average selling price (ASP) in the first quarter 2008 was EUR 79, down from EUR 89 in the first quarter 2007 and down from EUR 83 in the fourth quarter 2007. The lower year on year ASP was primarily due to a higher proportion of lower priced products and to a lesser extent the negative impact of the weaker US dollar. The sequential ASP decrease was primarily due to a higher proportion of lower priced products, a mix shift to lower ASP regions and to a lesser extent the negative impact of the weaker US dollar. Starting from the first quarter 2008, our device ASP excludes net sales from our Services & Software business. Prior periods have been reclassified for comparability purposes.

First quarter 2008 Devices & Services net sales grew 13% to EUR 9.3 billion, compared with EUR 8.2 billion in the first quarter 2007. Strong overall volume growth was partially offset by a significant ASP decrease, driven primarily by a higher proportion of lower priced products and to a lesser extent the negative impact of the weaker US dollar on net sales in the first quarter 2008, compared to the first quarter 2007.

Net sales year on year growth was strongest in Latin America, followed by Asia-Pacific, Middle East & Africa, China and Europe. Net sales were down significantly in North America year on year. Of our total Devices & Services net sales, Services & Software net sales were EUR 84 million in the first quarter 2008.

Devices & Services gross profit grew 33% to EUR 3.6 billion, compared with EUR 2.7 billion in the first quarter 2007, with a gross margin of 38.5% (32.8%). Devices & Services operating profit grew 50% to EUR 1.9 billion (including the negative impact of the EUR 81 million special item), compared with EUR 1.3 billion in the first quarter 2007 (including the negative impact of the EUR 57 million special item), with an operating margin of 20.3% (15.3%). First quarter 2008 operating profit included a EUR 81 million facilities impairment and other charges related to the closure of the Bochum site in Germany.

First quarter 2007 operating profit included charges of EUR 57 million primarily related to restructuring. The 50% year on year increase in operating profit for the first quarter 2008 was driven primarily by an improved gross margin, compared to the first quarter 2007. The gross margin improvement was primarily due to newer and more profitable devices shipping in volumes. Excluding the special items, Device & Services first quarter 2008 operating margin was 21.2% (16.0%).

More details and full press release
right here in pdf format.