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At the annual Nokia Capital Market Days in New York, Nokia presented its expectations for overall industry developments and set out its targets for the next one to two years. In their presentations, Nokia senior executives highlighted the company's broader product portfolio and renewed customer focus. They showed how Nokia's products, scale, manufacturing capability, logistics network and IPR portfolio are expected to continue to drive its leadership and market share gains in an increasingly complex and consolidating industry environment.
Nokia now expects:
- mobile device industry volumes in 2006 to grow more than 10% from the 780 million units we estimate 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 we stated in February this year
- slight to moderate growth in the mobile infrastructure market in 2006
Nokia financial targets for the next one to two years:
- Nokia operating margin target remains at 17%
- an operating margin of 17%-18% for Mobile Phones and Multimedia devices combined
- an infrastructure operating margin of 13%, rather than 14% as we stated last year
- as we said last year, by the end of 2006 to reduce overall R&D expenditure to 9%-10% of net sales; reduce Nokia mobile device R&D expenditure to 8% of net sales; and reduce Nokia 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 device portfolio offers a variety of form factors and competitive feature sets at all price points. The company's objective now is to broaden its 3G product portfolio, as evidenced by its release of 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 with applications and hardware for music, imaging and business.
Increasing the range of choice for consumers is key to Nokia's brand renewal strategy. By giving people the products they want, addressing early adopters and improving the retail experience, the company aims to further elevate the Nokia brand - the sixth most valuable in the world today*. This brand renewal strategy comes at a time when the dynamics of the mobile communications industry are shifting, as Nokia President and COO Olli-Pekka Kallasvuo outlined in his keynote address.
"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 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."
* Source: Interbrand
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Posted: 2005-12-02 16:54:33
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