Nearly a quarter of new global mobile subscriptions in next five years estimated to be in China
Beijing, China - At a press conference in Beijing today, Nokia marks 20 years in China and reaffirms its strong, long-term commitment to the world's largest mobile phone market. Since the outset, Nokia has grown its presence in China from an original staff of five in 1985 to more than 4,700 employees, working predominantly in global manufacturing and R&D.
As demonstration of Nokia's localization strategy in China, the company has also worked to maximize growth and global competitiveness for all parties in the value chain, which has so far contributed to the creation of an estimated 25,000 jobs among the company's cooperation partners and local sub-contractors and suppliers.
Jorma Ollila, Nokia Chairman and CEO said: "In 2004, Nokia not only retained, but clearly extended, its position as the number one player in the Chinese mobile device market. This is thanks to the strong Nokia brand here, our leading technology and quality products, as well as the recent hard work done in driving the efficiency and reach of our distribution system, particularly in more rural areas.
"It was also an excellent year for exports. We were again ranked the largest telecom exporter in China, a position held since 2000, with our export sales growing 56% year on year in 2004 to reach a record USD 3.3 billion*."
Strategically, China is very important for Nokia. As the company's second largest market, China 2004 net sales rose sharply to USD 3.6 billion, representing growth of 44% on the previous year. China also plays a major part in Nokia's global manufacturing base as a logistics hub and in its global R&D network. During 2005, in meeting growing market demand, Nokia plans to add further capacity to its manufacturing facilities in China, as well as expand its activities in R&D.
Mobile subscriber growth in China is expected to almost double over the next five years, driven by a strong replacement market in urban areas and more and more users in rural China gaining access to mobile communications. Nokia estimates the total global mobile subscriber base, which hit 1.7 billion at the end of last year, to reach three billion by 2010. Of these new subscriptions, nearly one quarter are expected to be in China.
"This represents a tremendous opportunity for Nokia," said Ollila. "Our aim is to maintain our leading position in China and to continue to grow as the most preferred partner within the Chinese mobile communications industry.
"We target strengthening our market share in China again this year, with growth largely on the strength of ongoing expansion into non-urban areas and our ability to keep coming up with the quality, tailored high-tech products that our Chinese customers want. The expected roll-out of 3G networks and related services also represent an opportunity to improve our position in the Chinese market. During the next three years, I would not be surprised to see China become Nokia's largest market in net sales terms."
About Nokia
Nokia is committed to long-term development and preferred partnership in China. With innovative technology, Nokia has continuously strengthened its market position in China as a leading supplier of mobile and broadband network systems and mobile phones. Nokia is the largest exporter in the Chinese mobile telecommunications industry. China is also an important part of Nokia's global manufacturing and R&D networks. Nokia has five R&D units, four manufacturing sites and widespread operations in China. The total number of Nokia employees in China is over 4,700.
Nokia is a world leader in mobile communications, driving the growth and sustainability of the broader mobility industry. Nokia connects people to each other and the information that matters to them with easy-to-use and innovative products like mobile phones, devices and solutions for imaging, games, media and businesses. Nokia provides equipment, solutions and services for network operators and corporations. www.nokia.com
*2003: EUR 1 = USD 1.2274
2004: EUR 1 = USD 1.335
It should be noted that certain statements herein which are not historical facts, including, without limitation, those regarding: A) the timing of product and solution launches and deliveries; B) our ability to develop, implement and commercialize new products, solutions and technologies; C) expectations regarding market growth, developments and structural changes; D) expectations and targets for our results of operations; E) the outcome of pending and threatened litigation; and F) statements preceded by ''believe,'' ''expect,'' ''anticipate,'' ''foresee'',"target" or similar expressions are forward-looking statements. Because these statements involve risks and uncertainties, actual results may differ materially from the results that we currently expect. Factors that could cause these differences include, but are not limited to: 1) developments in the mobile communications industry and the broader mobility industry, including the development of the mobile software and services market, as well as industry consolidation and other structural changes; 2) timing and success of the introduction and roll out of new products and solutions; 3) demand for and market acceptance of our products and solutions; 4) the impact of changes in technology and the success of our product and solution development; 5) the intensity of competition in the mobility industry and changes in the competitive landscape; 6) our ability to control the variety of factors affecting our ability to reach our targets and give accurate forecasts; 7) pricing pressures; 8) the availability of new products and services by network operators and other market participants; 9) general economic conditions globally and in our most important markets; 10) our success in maintaining efficient manufacturing and logistics as well as the high quality of our products and solutions; 11) inventory management risks resulting from shifts in market demand; 12) our ability to source quality components without interruption and at acceptable prices; 13) our success in collaboration arrangements relating to technologies, software or new products and solutions; 14) the success, financial condition, and performance of our collaboration partners, suppliers and customers; 15) any disruption to information technology systems and networks that our operations rely on; 16) our ability to have access to the complex technology involving patents and other intellectual property rights included in our products and solutions at commercially acceptable terms and without infringing any protected intellectual property rights; 17) developments under large, multi-year contracts or in relation to major customers; 18) the management of our customer financing exposure; 19) exchange rate fluctuations, including, in particular, fluctuations between the euro, which is our reporting currency, and the US dollar, the UK pound sterling and the Japanese yen; 20) our ability to recruit, retain and develop appropriately skilled employees; 21) our ability to implement our new organizational structure; and 22) the impact of changes in government policies, laws or regulations; as well as 23) the risk factors specified on pages 12 to 21 of the company's Form 20-F for the year ended December 31, 2003 under "Item 3.D Risk Factors."
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