Nokia has presented its expectations for overall industry developments and set out its targets for the next one to two years at its annual Nokia Capital Market Days in New York. The company forcast only slight to moderate growth in the mobile infrastructure market, but faster than expected mobile subscription growth. The company also said it’s policy of introducing more and more phones (it has launced 56 models this year already) would continue.
In its advice to the markets, Nokia said it now expects:
– mobile device industry volumes in 2006 to grow more than 10% from the 780 million units it estimates for 2005, and the mobile device market to also grow in value in 2006
– the number of mobile subscriptions to surpass three billion in 2008, rather than in 2010 as Nokia stated in February this year
– slight to moderate growth in the mobile infrastructure market in 2006
Nokia’s financial targets for the next one to two years were:
– Its operating margin target to remain at 17%
– An operating margin of 17%-18% for Mobile Phones and Multimedia devices combined
– An infrastructure operating margin of 13%, down from 14% as stated last year
– As the company said last year, by the end of 2006 Nokia wants to reduce its overall R&D expenditure to 9%-10% of net sales; reduce its mobile device R&D expenditure to 8% of net sales; and reduce its infrastructure R&D expenditure to 14% of net sales.
In his keynote address, Nokia Chairman and CEO Jorma Ollila said: “Last year we committed to increasing the competitiveness of our product portfolio and focusing more on our customers. Today, I’m pleased to say that we’ve made excellent progress in both of these key areas,” said Ollila. “I’m particularly happy with advancements in our product portfolio. The competitive features, design, usability and quality of our products mean Nokia will continue to be recognized as a globally-leading brand and the top industry driver.”
Nokia’s objective now is to broaden its 3G product portfolio, and it relased three new WCDMA phones during the Capital Market Days event. This takes the total number of Nokia models launched this year to 56, including 15 WCDMA models.
Nokia views this increasing range of choice for consumers as key to its brand strategy.
“The industry is consolidating around a few key players. At the same time it is increasing in complexity, as both devices and customer demands grow more sophisticated,” said Nokia President and COO Olli-Pekka Kallasvuo. “The winners will be the ones that can master this complexity and offer appealing products to a broad range of customers. On both these counts, we believe Nokia has the elements key to success.”