Nokia has presented its expectations for overall industry developments and set out its targets for the next one to two years. The company forecast only slight to moderate growth in the mobile infrastructure market, but faster than expected mobile subscription growth. The company also said its policy of introducing more and more phones (it has launched 56 models this year already) would continue.
Nokia said it now expects::
l 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
l the number of mobile subscriptions to surpass three billion in 2008, rather than in 2010 as Nokia stated in February this year
l slight to moderate growth in the mobile infrastructure market in 2006
Nokia’s financial targets for the next one to two years were:
l Its operating margin target to remain at 17%
l An operating margin of 17%-18% for Mobile Phones and Multimedia devices combined
l An infrastructure operating margin of 13%, down from 14% as stated last year
l 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.
Nokia’s objective now is to broaden its 3G product portfolio, and it released 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.