NokiaConvergenceStrategy

MUMMConferenceDay2007Rome,9thMay

BackgroundscenarioLowerGlobalAverageSellingPrice=>lowerMarginsMatureMarkets(EuropeandNorthAmerica):onedigitgrowth=>toughcompetitionforBrandswitchoverandinvestmentsforloyaltyHighSubsidybyTelecomOperators=>toughnegotiationsandstrongconsumers’attitudetolowerpricesBoomingMarkets(China,IndiaandLatinAmerica)

butlowrangeproducts=>lowMarginsFastercommercialproductlifecycle=>highInvestmentsinR&DMixoffinancialinvestmentscomingfromMulti-BusinessesCompaniesQuitestrongConvergencedemandcomingfromMobileandFixedOperatorsActualBusinessModelsarestilleffectivetohavetwodigitsOperatingMargininMPIndustry?No!NewValueAddedBusinessesarenecessaryConvergenceisthemaindrivertoenterinnewBusinessesConvergenceisnotapuresumoftwodifferentneeds/industriesConvergenceissomethingmore:newCategories,newBusinesses,newExperiences,newBenefits,newMarketsDigitalContentsHighcapacityMemories,fastProcessors,longlastingbatteriesStableandfastOperatingSystemforMobilePhonesWiderTransmissionBand(GPRS,UMTS,HSPA,…)TechnologyConsumersLegislationCompetition“everything,everytime,everywhere”Needsofcustomization(ringtones,wallpapers,UI,cover,etc..):EverybodyhasaMPDeregulationLiberalizationMarginerosionToughNegotiationsDriversforConvergenceWhat’sConvergenceNokiaConvergenceStrategy:GeneralApproachNetworksExperiencesTechnologyMobileBusinessWi-Fi/Wi-MaxPushe-mailVoIPUMAMultimediaMPixMPEG4MP3CarlZeissHighTouchDesignNewMaterialFormFactorSportNewMaterialSWFeaturesConvergenceStrategy:NewRequisitesComplementaryStrategy=>Experiencecompletion:HighEndUserPriceNotcompellingFeaturesNotrecognizedBrandinthenewBusinessFrontalAttackStrategy=>ProductsubstitutionStrategiesCompetitionPartnershipsAcquisitionsCompetitornowPartner:SiemensNewCompetitors:Apple,SonyPSP,Nintendo,Nikon,etc…Co-Opetitors:Microsoft,Canon,HP,BleckBerry,TomTom,Yahoo

FundamentaltocompletethenewBusinessValuePropositionandtogaincredibility:CarlZeiss,GamingPublishers,Epson,Kodak,Adobe,IBM,Oracle,JBL,Sennheiser,Bose,TopofthePops,TomTom,Route66,Skype,Flickr,GoogleLoudeye(OD2),Gate5,Intellisync.....andmoretocomeWhatisour

startingpoint?VisionandMissionInaworldwhereeveryonecanbeconnected,

wetakea

veryhuman

approach

to

technology.TowardsthefourbillionmilestoneSource:GlobalbrandtrackingdataexJapan-Korea.Brandpreferenceweightedbypopulation.#2CompetitorNokiaOthers20042005Q2’06GlobalBrandPreference%BrandPreferencebyAreaChinaAPACLatinAmericaN.AmericaMEAEurope394345Nokiawinsconsumershearts

andmindsby4:1margin…ItalySource:InterbrandCorp,BusinessWeek,July200..10.ValueChange2005vs.’06-1%-5%+5%+4%-9%+14%+12%+5%+6%+9%6.…andisoneofthemostlovedandfastest

growingbrandsintheworld.Nokia:BrandNumber6FirstEuropeanBrandFirstnon-USBrandFirstTelcoBrandWhyisthisimportant?Becausegreatbrandshelpgrowgrossmargin…ASPVolumeMarketPressure…whilebuildinglongtermbrandequity.?…andwhileweareallthesame……wehavedifferentneeds

“Iexpectthenewglobalconsumersegmentationmodeltore-installourreputationashavingthebestconsumerunderstandingintheindustry”O(jiān)lli-PekkaKallasvuo––August2005Nokia’sConsumerSegmentationisofkeystrategicimportanceNokia’ssegmentationmodelPortfolioPlanningProductCreationCampaignDevelopmentSalesPortfolioManagementCategoryManagementDesignProductManagersProgrammeManagersTPOManagersCampaignManagementCampaignPlanningCountryMarketingMarketingplanningCountryManagementAccountTeamsSalesTeamQuantifiableActionableOnemodelinplacefromplanningthroughtosalesensuringacommonlanguageTargetingconsumerswiththerightmessagesQuantificationofnewsolutionopportunitiesSellingsolutionstocustomerstoaddressspecificconsumersSolutiontargetingspecificdesiresofspecificconsumersGlobalsegmentationContinuouslyrefreshableresearch10billiondatapoints77,000Consumersx1.5hourinterview21countries122questionsUnderstandingof:Values,Beliefs,Attitudes,LifestyleNokiaConsumerSegmentation:atwodimensionalspace-theAxisRationalAspirationalHighInvolvementLowInvolvementVerticalAxis–basedonbehaviorHighInvolvementLowInvolvementHowdoconsumersactuallybehave?Replacephoneevery6monthsTendtopayhigherpriceformobileTendtobuyfromwellknownbrandsMoredesigndrivenpurchasingbehaviorHorizontalAxis––basedonattitudeRationalAspirationalWhatdoconsumerswant?IusemyMobilePhoneasafashionaccessoryIwouldpreferamobilephonethatisgreatlookingratherthanhavingthelatestfeaturesIwouldbewillingtoowndifferentMobilePhoneindifferentsituationsIamembarrassedifmyMobilePhonelooksoutdatedIwouldliketokeepuptodatewiththelatestfashiontrendsKeyAttitudes:thequadrantsRationalAspirationalHighInvolvementLowInvolvementMobilePhoneasempowermenttoolMobilePhonetrendleadersMobilePhonetrendfollowersMobilePhoneonlywhennecessaryItalianSegmentationModelYoungExplorers(10.3%)TechnologyStylists(5.2%)StyleLeaders(5.3%)StyleFollowers(6.3%)FamilyProviders(12.5%)LifeJugglers(6.3%)PragmaticLeaders(3.4%)LifeBuilders(8.9%)ImageSeekers(0.0%)HIGHERINVOLVEMENTSimplicitySeekers(34.3%)MatureAcceptors(5.6%)TechnologyLeaders(3.4%)LOWERINVOLVEMENTRATIONALASPIRATIONAL(non-existentinEurope)Keyconsumerneedaroundmodernitythelatestandbest–technologyisakeydriver.Keyconsumerneedaroundstyle/fashion.Designconsciousconsumers.RequirewelldesignedstylishproductsMoremainstreamsegments,buttendtobeyoungerindemographics.SlowertechnologyadoptionMorerationalattitudes.KeyconsumerneedisthedeviceasatoolforempowermentLessinvolvedwithmobiletelephonyandconsumerneedisaroundabasiccommunicationdeviceGlobalSegmentSizesItalyWave1ItalyWave2YoungExplorers(7.9%)6.9%10.3%TechnologyLeaders(6.1%)3.6%3.4%TechnologyStylists(6.4%)1.1%5.2%StyleLeaders(10.6%)4.5%5.3%ImageSeekers(7.2%)NENEStyleFollowers(6.3%)6.7%4.8%FamilyProviders(10.3%)21.6%12.5%SimplicitySeekers(13%)28.1%34.3%MatureAcceptors(7.6%)1.9%5.6%LifeJugglers(3.8%)7.1%6.3%PragmaticLeaders(7.1%)6%3.4%LifeBuilders(13.9%)12.4%8.9%ItalyRe-FreshSegmentationMapYoungExplorersTechnologyLeadersTechnologyStylistsStyleLeadersStyleFollowersFamilyProvidersSimplicitySeekersMatureAcceptorsLifeJugglersPragmaticLeadersLifeBuildersImageSeekersSI=StatisticallyInsignificant NE=NonExistentGlobally,11.1%ofmarkethasmovedontoorabovehorizontalinvolvementaxis(=mostsegmentsaboveaxishavegrown)FourcategoriestohelppeoplenavigateYoungExplorers(7.9%)TechnologyStylists(6.4%)StyleLeaders(10.6%)StyleFollowers(6.3%)FamilyProviders(10.3%)LifeJugglers(3.8%)PragmaticLeaders(7.1%)LifeBuilders(13.9%)ImageSeekers(7.2%)SimplicitySeekers(13%)MatureAcceptors(7.6%)TechnologyLeaders(6.1%)RATIONALASPIRATIONALSmartandcollaborativebusinesssolutionsAchieveNokiaEseriesAchievingtogetherLiveDesignandstyleleadershipInspiring

thesensesConnectEssenceofNokiathroughbalanceofstyleandprovenbenefitsConnectingsimplyInnovationandtechnologyleadershipExploreNokiaNseriesSharingdiscoveriesImprovemarketingyieldSharingDiscoveriesAchievingTogetherConnectingSimplyNokiaconnectspeoplethroughveryhumantechnologytohelpthemfeelcloseWebelievelifeisbetterwhensharedWebelieveeveryoneachievesmorewhenworkingtogetherWebelieveexperiencesaremorevaluablewhensharedWHATWeBelieveWHATWePromise…expressedthroughNokiaConnectingPeopleEXPLOREConnectACHIEVECONNECTLIVEWebelievepeopleneedinspirationtobondevendeeperInspiringSenses…expressedthroughNokiaConnectingPeople1Nokiabrand4Categories2Sub-brandsWithdistincttonalities,notmultiplepersonalities.WhatthismeansforusSustainableindustryleadershipOptimalproductportfolioofferingpercategoryImprovedmarketingyealdbyin-depthunderstandingofconsumerneedspersegmentThankyou9、靜靜夜夜四四無無鄰鄰，，荒荒居居舊舊業(yè)業(yè)貧貧。。。。1月月-231月月-23Wednesday,January4,202310、雨雨中中黃黃葉葉樹樹，，燈燈下下白白頭頭人人。。。。21:41:3321:41:3321:411/4/20239:41:33PM11、以我獨獨沈久，，愧君相相見頻。。。1月-2321:41:3321:41Jan-2304-Jan-2312、故人江海海別，幾度度隔山川。。。21:41:3321:41:3321:41Wednesday,January4,202313、乍見翻疑夢夢，相悲各問問年。。1月-231月-2321:41:3321:41:33January4,202314、他鄉(xiāng)生白白發(fā)，舊國國見青山。。。04一月月20239:41:33下下午21:41:331月-2315、比不了了得就不不比，得得不到的的就不要要。。。。一月239:41下午午1月-2321:41January4,202316、行動動出成成果，，工作作出財財富。。。2023/1/421:41:3321:41:3304January202317、做前，能能夠環(huán)視四四周；做時時，你只能能或者最好好沿著以腳腳為起點的的射線向前前。。9:41:33下下午9:41下下午21:41:331月-239、沒沒有有失失敗敗，，只只有有暫暫時時停停止止成成功功！！。。1月月-231月月-23Wednesday,January4,202310、很多事情努努力了未必有有結(jié)果，但是是不努力卻什什么改變也沒沒有。。21:41:3321:41:3321:411/4/20239:41:33PM11、成成功功就就是是日日復復一一日日那那一一點點點點小小小小努努力力的的積積累累。。。。1月月-2321:41:3321:41Jan-2304-Jan-2312、世間成事，，不求其絕對對圓滿，留一一份不足，可可得無限完美美。。21:41:3321:41:3321:41Wednesday,January4,202313、不不知知香香積積寺寺，，數(shù)數(shù)里里入入云云峰峰。。。。1月月-231月月-2321:41:3321:41:33January4,202314、意志志堅強強的人人能把把世界界放在在手中中像泥泥塊一一樣任任意揉揉捏。。04一一月月20239:41:33下下午21:41:331月-2315、楚塞三三湘接，，荊門九九