Nokia to shift proportion of mobile phone manufacturing from U.S. to factories abroad; Action intended to increase market and cost leadership

Nokia today announced it is making significant changes in its manufacturing operations at its North Texas factories to maintain its advantage in the highly competitive mobile phone industry. The world's largest mobile phone supplier will shift some of its mobile phone manufacturing from its U.S-based factories in Texas to its facilities in Korea and Mexico. As a result of this change, Nokia's employment in North Texas will decrease by approximately 800 full-time employees at its two Texas-based manufacturing facilities over the next five months.

During the past year, Nokia has increased production of mobile phones substantially in response to strong demand for its products. However, the majority of increased manufacturing for the Americas region has taken place at its factories in Mexico, Brazil and Korea.

"We continue to grow faster than the market," K-P Wilska, president, Nokia (Americas), said. "In recent months we have increased the capacity of our factories by installing newer machinery and improving our manufacturing processes. This means we can achieve higher volumes than before, with less labor. In the future, as we begin to make new products that were designed for manufacturability as well as performance, we will have even more capacity. Because of this, we are taking actions designed to increase our market and cost leadership."

Manufacturing will be shifted to Korea and Mexico from the Diplomacy Road/Centreport factory in Ft. Worth and it will be subleased.The Alliance factory will be focused on more engineering support for the Americas and fulfillment for the U.S. market, but will continue manufacturing mobile phones. In addition, Nokia plans to consolidate all of its Ft. Worth-based operation at the Alliance facility.

"We are firmly committed to building on our market-leading position as our products and our business evolve. Likewise, we remain firmly committed to our Alliance facility and to the City of Ft. Worth, and we intend to be here for many years to come," Wilska said.

Nokia has occupied the Diplomacy factory since 1991, when the company first began manufacturing operations in the United States. The Alliance factory opened in 1995 to accommodate increased demand for mobile phones. Nokia's regional headquarters for the Americas is located in Irving, Tex. The 'Nokia Campus', as it is commonly called, consists of administrative, sales and marketing and R&D employees. Beginning with a handful of employees in the Dallas-Ft. Worth Metroplex in 1992, Nokia currently employs around 5,500 in the area.

About Nokia
Nokia is the world leader in mobile communications. Backed by its experience, innovation, user-friendliness and secure solutions, the company has become the leading supplier of mobile phones and a leading supplier of mobile, fixed and IP networks. By adding mobility to the Internet Nokia creates new opportunities for companies and further enriches the daily lives of people. Nokia is a broadly held company with listings in six major exchanges.

Further information:

Nokia Mobile Phones
Tapio Hedman, Vice President, Communications
Phone: +358 40 569 3396

Jim Bowman, Vice President Corporate Communications, Nokia (Americas)
Phone: +1 972 894 4213
www.nokia.com