Nokia sigue en la lucha, prácticamente otro anuncio de resultados que solo mencionan perdidas y se asume que esta temporada de reportes no será la excepción.
La emblemática Nokia reportó por tercer reporte consecutivo, en otras palabras 9 meses corridos cuando las mismas ascienden al billón de dólares, una baja si se comparan los 1.2 billones y los 1.7 del reporte del año pasado.
Nokia Corporation Q2 2012 Interim Report
This is a summary of the second quarter 2012 interim report published today. The complete second quarter 2012 interim report with tables is available at http://www.results.nokia.com/results/Nokia_results2012Q2e.pdf. Investors should not rely on summaries of our interim reports only, but should review the complete interim reports with tables.
FINANCIAL AND OPERATING HIGHLIGHTSNokia net sales in Q2 2012 were EUR 7.5 billion, up from EUR 7.4 billion in Q1 2012
– Nokia Devices & Services Q2 net sales decreased 5% quarter-on-quarter.
– Lumia Q2 volumes increased quarter-on-quarter to 4 million units.
– Mobile Phones Q2 volumes increased quarter-on-quarter and year-on-year to 73 million units.Nokia non-IFRS EPS in Q2 2012 of EUR -0.08, level with Q1 2012; reported EPS EUR -0.38
– Reported EPS adversely affected by non-cash valuation allowances related to deferred tax assets* of EUR 800 million, inventory-related allowances, and restructuring related charges.
– Devices & Services Q2 non-IFRS operating margin negative 9.1%, adversely affected by EUR 220 million of inventory-related allowances for our Lumia, Symbian and MeeGo devices. Smart Devices Q2 gross margin and contribution adversely affected by the inventory-related allowances. Q3 expected to be a challenging quarter in Smart Devices due to product transitions.
– Nokia Siemens Networks returned to non-IFRS operating profitability in Q2; restructuring progressing well and company seeing continued progress against new strategy that focuses on key markets and product segments.Both gross and net cash higher year-on-year
– Nokia ended Q2 with gross cash of EUR 9.4 billion and net cash of EUR 4.2 billion.
– Net cash lower quarter-on-quarter, after EUR 742 million annual dividend payment to shareholders.
– Nokia Q2 net cash from operating activities of positive EUR 102 million, including receipt of EUR 400 million pre-payments from existing IPR licenses.*The majority of Devices & Services’ Finnish deferred tax assets are indefinite in nature and remain available for Nokia to use against any potential future Finnish tax liabilities.
Commenting on the Q2 results, Stephen Elop, Nokia CEO, said:
“Nokia is taking action to manage through this transition period. While Q2 was a difficult quarter, Nokia employees are demonstrating their determination to strengthen our competitiveness, improve our operating model and carefully manage our financial resources.We shipped four million Lumia Smartphones in Q2, and we plan to provide updates to current Lumia products over time, well beyond the launch of Windows Phone 8. We believe the Windows Phone 8 launch will be an important catalyst for Lumia. During the quarter, we demonstrated stability in our feature phone business, and enhanced our competitiveness with the introduction of our first full touch Asha devices. In Location & Commerce, our business with auto-industry customers continued to grow, and we made good progress establishing our location-based platform with businesses like Yahoo!, Flickr, and Bing. We continued to strengthen our patent portfolio and filed more patents in the first half of 2012 than any previous six month period since 2007. And, we are encouraged that Nokia Siemens Networks returned to underlying operating profitability through strong execution of its focused strategy.
We are executing with urgency on our restructuring program. We are disposing of non-core assets like Vertu. We are taking the necessary steps to restructure the operations of the company, which included the announcement of a new program on June 14. Faster than anticipated, we have already negotiated the closure of the Ulm, Germany R&D site, and the negotiations about the planned closure of our factory in Salo, Finland are proceeding in a collaborative spirit.
We held our net cash resources at a steady level after adjusting for the annual dividend payment to our shareholders. While Q3 will remain difficult, it is a critical priority to return our Devices & Services business to positive operating cash flow as quickly as possible.”
SUMMARY FINANCIAL INFORMATION
Reported and Non-IFRS second quarter 2012 results1,2,3 EUR million Q2/2012 Q2/2011 YoY
ChangeQ1/2012 QoQ
ChangeNokia Net sales 7 542 9 275 -19% 7 354 3% Operating profit -826 -487 -1 340 Operating profit
(non-IFRS)-327 391 -260 EPS, EUR diluted -0.38 -0.10 -0.25 EPS, EUR diluted
(non-IFRS)4-0.08 0.06 -0.08 Net cash from
operating
activities102 -176 -590 Net cash and
other liquid
assets54 197 3 891 8% 4 872 -14% Devices &
Services6Net sales 4 023 5 467 -26% 4 246 -5% Smart Devices
net sales1 541 2 351 -34% 1 704 -10% Mobile Phones
net sales2 291 2 568 -11% 2 311 -1% Mobile device
volume
(mn units)83.7 88.5 -5% 82.7 1% Smart Devices
volume
(mn units)10.2 16.7 -39% 11.9 -14% Mobile Phones
volume
(mn units)73.5 71.8 2% 70.8 4% Mobile device
ASP748 62 -23% 51 -6% Smart Devices
ASP7151 141 7% 143 6% Mobile Phones
ASP731 36 -14% 33 -6% Operating
profit-474 -216 -219 Operating
profit
(non-IFRS)-365 400 -127 Operating
margin %-11.8% -4.0% -5.2% Operating margin %
(non-IFRS)-9.1% 7.3% -3.0% Location &
Commerce6Net sales 283 271 4% 277 2% Operating profit -95 -104 -9% -94 1% Operating profit
(non-IFRS)41 7 486% 36 14% Operating
margin %-33.6% -38.4% -33.9% Operating
margin %
(non-IFRS)14.5% 2.6% 12.9% Nokia Siemens
Networks6,8Net sales 3 343 3 642 -8% 2 947 13% Operating profit -227 -111 -1 005 Operating profit
(non-IFRS)27 40 -33% -147 Operating
margin %-6.8% -3.0% -34.1% Operating
margin %
(non-IFRS)0.8% 1.1% -5.0% Note 1 relating to January-June 2012 results: Nokia reported net sales were EUR 14 896 million and reported EPS(diluted) was EUR -0.63 for the period from January 1 to June 30, 2012. Further information about the results for the period from January 1 to June 30, 2012 can be found on pages 19, 26, 27 and 30 of the complete Q2 2012 interim report with tables.
Note 2 relating to non-IFRS results: Non-IFRS results exclude special items for all periods. In addition, non-IFRS results exclude intangible asset amortization, other purchase price accounting related items and inventory value adjustments arising from (i) the formation of Nokia Siemens Networks and (ii) all business acquisitions completed after June 30, 2008. Nokia believes that our non-IFRS results provide meaningful supplemental information to both management and investors regarding Nokia’s underlying performance by excluding the above-described items that may not be indicative of Nokia’s business operating results. These non-IFRS financial measures should not be viewed in isolation or as substitutes to the equivalent IFRS measure(s), but should be used in conjunction with the most directly comparable IFRS measure(s) in the reported results. See note 3 below for information about the exclusions from our non-IFRS results. More information, including a reconciliation of our Q2 2012 and Q2 2011 non-IFRS results to our reported results, can be found in our complete Q2 2012 interim report with tables on pages 21-25. A reconciliation of our Q1 2012 non-IFRS results to our reported results can be found in our complete Q1 interim report with tables on pages 18 and 20-23 published on April 19, 2012.
Note 3 relating to non-IFRS exclusions:
Q2 2012 – EUR 499 million consisting of:
– EUR 190 million restructuring charge and other associated items in Nokia Siemens Networks, including EUR 70 million of charges related to country and contract exits based on new strategy that focuses on key markets and product segments.
– EUR 10 million restructuring charge in Location & Commerce
– EUR 80 million restructuring charge and associated impairments EUR 28 million in Devices & Services
– EUR 64 million of intangible asset amortization and other purchase price accounting related items arising from the formation of Nokia Siemens Networks and the acquisition of Motorola Solutions’ networks assets
– EUR 126 million of intangible asset amortization and other purchase price accounting related items arising from the acquisition of NAVTEQ
– EUR 1 million of intangible assets amortization and other purchase price related items arising from the acquisition of Novarra, MetaCarta and Motally in Devices & ServicesQ2 2012 taxes – EUR 800 million valuation allowances for Devices & Services deferred tax assets adversely affecting Nokia taxes
Q1 2012 – EUR 1 080 million consisting of:
– EUR 772 million restructuring charge and other associated items in Nokia Siemens Networks
– EUR 10 million restructuring charge in Location & Commerce
– EUR 91 million restructuring charge in Devices & Services
– EUR 86 million of intangible asset amortization and other purchase price accounting related items arising from the formation of Nokia Siemens Networks and the acquisition of Motorola Solutions’ networks assets
– EUR 120 million of intangible asset amortization and other purchase price accounting related items arising from the acquisition of NAVTEQ
– EUR 1 million of intangible assets amortization and other purchase price related items arising from the acquisition of Novarra, MetaCarta and Motally in Devices & ServicesQ1 2012 taxes – EUR 135 million valuation allowances for Nokia Siemens Networks deferred tax assets adversely affecting Nokia taxes.
Q2 2011 – EUR 878 million consisting of:
– EUR 68 million restructuring charge and other associated items in Nokia Siemens Networks
– EUR 297 million restructuring charge in Devices & Services
– EUR 275 million accrued Accenture deal consideration in Devices & Services
– EUR 41 million impairment of shares in an associated company in Devices & Services
– EUR 83 million of intangible asset amortization and other purchase price accounting related items arising from the formation of Nokia Siemens Networks and the acquisition of Motorola Solutions’ networks assets
– EUR 111 million of intangible asset amortization and other purchase price accounting related items arising from the acquisition of NAVTEQ
– EUR 3 million of intangible assets amortization and other purchase price related items arising from the acquisition of OZ Communications, Novarra and Motally in Devices & ServicesNote 4 relating to non-IFRS Nokia EPS: Nokia taxes continued to be adversely affected by Nokia Siemens Networks taxes as no tax benefits are recognized for certain Nokia Siemens Networks deferred tax items. In Q2 2012, this impact was smaller due to improved profitability and a favorable profit mix in Nokia Siemens Networks taxes offset by an unfavorable profit mix in Devices & Services taxes. If Nokia’s earlier estimated long-term tax rate of 26% had been applied, non-IFRS Nokia EPS would have been approximately 0.6 Euro cent higher in Q2 2012.
Note 5 relating to Nokia net cash and other liquid assets: Calculated as total cash and other liquid assets less interest-bearing liabilities. For selected information on Nokia Group interest-bearing liabilities, please see the table on page 32 of the complete Q2 2012 interim report with tables
Note 6 relating to operational and reporting structure: We adopted our current operational structure during 2011 and have three businesses: Devices & Services, Location & Commerce and Nokia Siemens Networks and four operating and reportable segments: Smart Devices and Mobile Phones within Devices & Services, Location & Commerce and Nokia Siemens Networks. Smart Devices focuses on smartphones and Mobile Phones focuses on mass market feature phones. Devices & Services also contains Devices & Services Other which includes net sales of our luxury phone business Vertu, spare parts and related cost of sales and operating expenses, as well as intellectual property related royalty income and common research and development expenses. Location & Commerce focuses on the development of location-based services and local commerce. Nokia Siemens Networks is one of the leading global providers of telecommunications infrastructure hardware, software and services.
Note 7 relating to average selling prices (ASP:( Mobile device ASP represents total Devices & Services net sales (Smart Devices net sales, Mobile Phones net sales, and Devices & Services Other net sales) divided by total Devices & Services volumes. Devices & Services Other net sales includes net sales of Nokia’s luxury phone business Vertu and spare parts, as well as intellectual property royalty income. Smart Devices ASP represents Smart Devices net sales divided by Smart Devices volumes. Mobile Phones ASP represents Mobile Phones net sales divided by Mobile Phones volumes.
Note 8 relating to Nokia Siemens Networks: Nokia Siemens Networks completed the acquisition of Motorola Solutions’ networks assets on April 30, 2011. Accordingly, the results of Nokia Siemens Networks for the second quarter 2012 are not directly comparable to its results for the second quarter 2011.
NOKIA OUTLOOK
– Nokia expects its non-IFRS Devices & Services operating margin in the third quarter 2012 to be similar to the second quarter 2012 level of negative 9.1%, plus or minus four percentage points. This outlook is based on our expectations regarding a number of factors, including:
– competitive industry dynamics continuing to negatively affect the Smart Devices and Mobile Phones business units;
– consumer demand particularly related to our current Lumia products; and
– the macroeconomic environment.– Nokia expects the third quarter 2012 to be a challenging quarter in Smart Devices due to product transitions.
– Nokia continues to target to reduce its Devices & Services non-IFRS operating expenses to an annualized run rate of approximately EUR 3.0 billion by the end of 2013.
– Nokia and Nokia Siemens Networks expect Nokia Siemens Networks non-IFRS operating margin in the third quarter 2012 to be above the second quarter 2012 level of 0.8%.
– Nokia Siemens Networks continues to target to reduce its non-IFRS annualized operating expenses and production overheads by EUR 1 billion by the end of 2013, compared to the end of 2011.SECOND QUARTER 2012 FINANCIAL AND OPERATING DISCUSSION
NOKIA GROUP
We adopted our current operational structure during 2011 and have three businesses: Devices & Services, Location & Commerce and Nokia Siemens Networks and four operating and reportable segments: Smart Devices and Mobile Phones within Devices & Services, Location & Commerce and Nokia Siemens Networks. Smart Devices focuses on smartphones and Mobile Phones focuses on mass market feature phones. Devices & Services also contains Devices & Services Other which includes net sales of our luxury phone business Vertu, spare parts and related cost of sales and operating expenses, as well as intellectual property related royalty income and common research and development expenses. Location & Commerce focuses on the development of location-based services and local commerce. Nokia Siemens Networks is one of the leading global providers of telecommunications infrastructure hardware, software and services.
The following discussion includes non-IFRS results information. Non-IFRS results exclude special items for all periods. In addition, non-IFRS results exclude intangible asset amortization, other purchase price accounting related items and inventory value adjustments arising from (i) the formation of Nokia Siemens Networks and (ii) all business acquisitions completed after June 30, 2008.
The following table sets forth the year-on-year and sequential growth rates in our net sales on a reported basis and at constant currency for the periods indicated.
SECOND QUARTER 2012 NET SALES,
REPORTED & CONSTANT CURRENCY1YoY
ChangeQoQ
ChangeGroup net sales –
reported-19% 3% Group net sales –
constant currency1-20% 2% Devices & Services
net sales – reported-26% -5% Devices & Services
net sales – constant currency1-27% -6% Nokia Siemens Networks
net sales – reported-8% 13% Nokia Siemens Networks
net sales – constant currency1-11% 14% Note 1: Change in net sales at constant currency excludes the impact of changes in exchange rates in comparison to the Euro, our reporting currency.
The following table sets forth Nokia Group’s reported cash flow for the periods indicated and financial position at the end of the periods indicated, as well as the year-on-year and sequential growth rates.
NOKIA GROUP CASH FLOW
AND FINANCIAL POSITIONEUR million Q2/2012 Q2/2011 YoY Change Q1/2012 QoQ Change Net cash from
operating activities102 -176 -590 Total cash and
other liquid assets9 418 9 358 1% 9 793 -4% Net cash and
other liquid assets14 197 3 891 8% 4 872 -14% Note 1: Total cash and other liquid assets minus interest-bearing liabilities.
Year-on-year, net cash and other liquid assets increased by EUR 306 million in the second quarter 2012, primarily due to cash flows related to IPR, including a EUR 400 million receipt of pre-payments from existing IPR licenses, the receipt of quarterly platform support payments from Microsoft (which commenced in the fourth quarter 2011), a EUR 500 million equity investment in Nokia Siemens Networks by Siemens (received in the third quarter of 2011) and positive overall net cash from operating activities, partially offset by payment of the annual dividend totaling EUR 742 million, capital expenditures and cash outflows related to restructuring.
Sequentially, net cash and other liquid assets decreased by EUR 675 million in the second quarter 2012, primarily due to the payment of the annual dividend totaling EUR 742 million, Devices & Services operating losses, cash outflows related to restructuring and capital expenditures, partially offset by cash flows related to IPR (including a EUR 400 million receipt of pre-payments from existing IPR licenses), a positive contribution from Nokia Siemens Networks and the receipt of a USD 250 million (approximately EUR 196 million) quarterly platform support payment from Microsoft.
In the second quarter 2012, Nokia Siemens Networks’ contribution to net cash from operating activities was approximately EUR 160 million. This was primarily due to working capital improvements. In the second quarter 2012, Nokia Siemens Networks’ working capital performance improved sequentially by approximately EUR 135 million, primarily related to improved accounts payable management and accounts receivables collection, offset by cash outflows related to restructuring.
Our agreement with Microsoft includes platform support payments from Microsoft to us as well as software royalty payments from us to Microsoft. In the second quarter 2012, we received a quarterly platform support payment of USD 250 million (approximately EUR 196 million). Under the terms of the agreement governing the platform support payments, the amount of each quarterly platform support payment is USD 250 million. We have a competitive software royalty structure, which includes annual minimum software royalty commitments. Minimum software royalty commitments are paid quarterly. Over the life of the agreement, both the platform support payments and the minimum software royalty commitments are expected to measure in the billions of US dollars. The total amount of the platform support payments is expected to slightly exceed the total amount of the minimum software royalty commitments. In accordance with the contract terms, the platform support payments and annual minimum software royalty commitment payments continue for a corresponding period of time.
During the second quarter 2012, based on a combination of factors, including the decline in our market capitalization, credit rating downgrades as well as our operating results, we concluded that there were sufficient indicators to require Nokia Group to perform an interim goodwill impairment analysis as of June 30, 2012. The methodology and models used for our interim impairment assessment are consistent with those used in the annual assessment performed during the fourth quarter of 2011 and the inputs to the model, such as cash flows, discount rates and growth rates, have been updated to reflect our most recent projections. Given that the indicators were primarily related to operating factors within Smart Devices, Mobile Phones and Location & Commerce, no interim analysis for Nokia Siemens Networks was conducted.
As of June 30, 2012, goodwill of EUR 874 million, EUR 535 million, EUR 3 389 million and EUR 190 million was allocated to Smart Devices, Mobile Phones, Location & Commerce and Nokia Siemens Networks, respectively. There was no goodwill impairment charge recorded during the second quarter 2012 as a result of the goodwill impairment analysis, however a change in any of the key assumptions used in measuring the recoverable value of our Location & Commerce business could have resulted in additional goodwill impairment. While we believe the estimated recoverable values are reasonable, actual performance in the short-term and long-term could be materially different from our forecasts, which could impact future estimates of recoverable value of our reporting units and may result in impairment charges.
In the second quarter 2012, Nokia recognized EUR 800 million in valuation allowances related to its Finnish deferred tax assets in accordance with accounting standards. During the second quarter 2012, Nokia’s Finnish taxable results over the past three years moved from a cumulative profit position to a cumulative loss position. When an entity has a history of recent losses in a taxable jurisdiction, the entity recognizes a deferred tax asset arising from unused losses or tax credits only to the extent the entity has sufficient taxable temporary differences or there is convincing other evidence that sufficient tax profit will be available against which the unused tax losses or unused tax credits can be utilized in the future. Positive evidence of future taxable profits may be assigned lesser weight in assessing the appropriateness of recording a deferred tax asset when there is other unfavorable evidence such as cumulative losses, which are considered strong evidence that future taxable profits may not be available. Regardless of the accounting treatment for reporting purposes, the majority of Nokia’s Finnish deferred tax assets are indefinite in nature and available against future Finnish tax liabilities. Thus, if Nokia is able to reestablish a pattern of sufficient tax profitability in Finland, the allowances may be reversed.
Going forward on a non-IFRS basis, until a pattern of tax profitability is reestablished in Finland, Nokia expects to record quarterly tax expense of approximately EUR 50 million related to its Devices & Services business and approximately EUR 50 million related to its Nokia Siemens Networks business. Nokia expects to continue to record taxes related to its Location & Commerce business at a 26% rate.
DEVICES & SERVICES
The following table sets forth a summary of the results for our Devices & Services business for the periods indicated, as well as the year-on-year and sequential growth rates.
DEVICES & SERVICES RESULTS SUMMARY Q2/2012 Q2/2011 YoY Change Q1/2012 QoQ Change Net sales (EUR million)1 4 023 5 467 -26% 4 246 -5% Mobile device volume
(million units)83.7 88.5 -5% 82.7 1% Mobile device ASP (EUR) 48 62 -23% 51 -6% Non-IFRS gross margin (%) 18.1% 30.5% 24.4% Non-IFRS operating
expenses (EUR million)1 090 1 264 -14% 1 123 -3% Non-IFRS operating
margin (%)-9.1% 7.3% -3.0% Note 1: Includes IPR royalty income recognized in Devices & Services Other net sales.
The year-on-year and sequential changes in our Devices & Services net sales, volumes, average selling prices and gross margin are discussed below under our Smart Devices and Mobile Phones business units. On a year-on-year basis, the decline in Devices & Services Other net sales was primarily due to the recognition in the second quarter 2011 of approximately EUR 430 million of IPR royalty income from new contracts related to the second quarter 2011 and earlier periods. We estimate that our current annual IPR royalty income run-rate is approximately EUR 0.5 billion.
At the end of the second quarter 2012, our overall channel inventory was approximately on the same level as at the end of the first quarter 2012. We ended the second quarter 2012 around the high end of our normal 4 to 6 week channel inventory range, but on an absolute unit basis, channel inventories declined slightly sequentially.
Net Sales and Volumes by Geographic Area
The following table sets forth the net sales for our Devices & Services business for the periods indicated, as well as the year-on-year and sequential growth rates, by geographic area. IPR royalty income is allocated to the geographic areas contained in this chart.
DEVICES & SERVICES NET SALES
BY GEOGRAPHIC AREAEUR million Q2/2012 Q2/2011 YoY Change Q1/2012 QoQ Change Europe 1 096 1 666 -34% 1 352 -19% Middle East & Africa 663 988 -33% 737 -10% Greater China 542 913 -41% 577 -6% Asia-Pacific 948 1 085 -13% 945 0% North America 128 88 45% 93 38% Latin America 646 727 -11% 542 19% Total 4023 5467 -26% 4246 -5% The following table sets forth the mobile device volumes for our Devices & Services business for the periods indicated, as well as the year-on-year and sequential growth rates, by geographic area.
DEVICES & SERVICES MOBILE DEVICE VOLUMES
BY GEOGRAPHIC AREAmillion units Q2/2012 Q2/2011 YoY Change Q1/2012 QoQ Change Europe 15.3 18.4 -17% 15.8 -3% Middle East & Africa 19.4 20.5 -5% 21.4 -9% Greater China 7.9 11.3 -30% 9.2 -14% Asia-Pacific 28.6 24.5 17% 26.1 10% North America 0.6 1.5 -60% 0.6 0% Latin America 11.9 12.3 -3% 9.6 24% Total 83.7 88.5 -5% 82.7 1%
Operating Expenses
Devices & Services non-IFRS operating expenses decreased 14% year-on-year and 3% sequentially in the second quarter 2012. On a year-on-year basis, operating expenses related to Mobile Phones increased 7%, whereas operating expenses related to Smart Devices decreased 28%, in the second quarter 2012. On a sequential basis, operating expenses related to Mobile Phones and Smart Devices decreased by 5% and 3%, respectively, in the second quarter 2012. In addition to the factors described below, the year-on-year changes resulted from the proportionate allocation of operating expenses being affected by the relative mix of sales and gross profit performance between Mobile Phones and Smart Devices. This resulted in higher and lower relative allocations to Mobile Phones and Smart Devices, respectively.Devices & Services non-IFRS research and development expenses decreased 19% year-on-year in the second quarter 2012. On a sequential basis, Devices & Services non-IFRS research and development expenses decreased 7% in the second quarter 2012. Both the year-on-year and sequential declines were primarily due to a reduction in Symbian and MeeGo related costs as well as cost controls.
Devices & Services non-IFRS sales and marketing expenses decreased 6% year-on-year in the second quarter 2012. On a sequential basis, Devices & Services non-IFRS sales and marketing expenses increased 8% in the second quarter 2012. Year-on-year, marketing expenses declined primarily due to lower marketing expenditure on Symbian as well as cost controls, partially offset by higher marketing expenditure on Lumia and feature phone devices. Sequentially, marketing expenses increased primarily due to higher expenditure on Lumia devices as well as expanded regional distribution of Lumia devices, partially offset by cost controls.
Devices & Services non-IFRS administrative and general expenses decreased 30% year-on-year in the second quarter 2012 primarily related to cost savings in support functions, particularly in IT and real estate management and shared function cost categorization. On a sequential basis, Devices & Services non-IFRS administrative and general expenses decreased 35% in the second quarter 2012 primarily due to shared function cost categorization and cost savings in support functions.
In the second quarter 2012, Devices & Services non-IFRS other income and expense had a negative year-on-year and positive sequential impact on profitability. On a reported basis, other income and expense was significantly adversely affected in the second quarter 2012 primarily as a result of restructuring-related expenses discussed below, which were recognized in Devices & Services Other.
Operating Margin
The lower year-on-year and sequential Devices & Services non-IFRS operating margin in the second quarter 2012 was primarily due to lower net sales and gross margins, which was adversely affected by EUR 220 million of inventory-related allowances in Smart Devices, partially offset by lower operating expenses.Cost Reduction Activities and Planned Operational Adjustments
Nokia continues to target to reduce its Devices & Services non-IFRS operating expenses to an annualized run rate of approximately EUR 3.0 billion by the end of 2013.In connection with the implementation of our strategy announced in February 2011, we have announced and made a number of changes to our operations. In the second quarter of 2012, we recognized restructuring charges and other associated items of EUR 108 million related to our restructuring activities in Devices & Services. By the end of the second quarter 2012, we had recorded cumulative Devices & Services restructuring charges of approximately EUR 1.0 billion. In total, we expect cumulative Devices & Services restructuring charges of approximately EUR 1.8 billion before the end of 2013. By the end of the second quarter 2012, Devices & Services had cumulative restructuring related cash outflows of approximately EUR 600 million. From the third quarter 2012 onwards, we expect Devices & Services restructuring related cash outflows to be approximately EUR 500 million in 2012 and approximately EUR 500 million in 2013. Of the total expected charges relating to restructuring activities of EUR 1.8 billion, we expect Devices & Services non-cash charges to be approximately EUR 200 million.
SMART DEVICES
The following table sets forth a summary of the results for our Smart Devices business unit for the periods indicated, as well as the year-on-year and sequential growth rates.
SMART DEVICES
RESULTS SUMMARYQ2/2012 Q2/2011 YoY Change Q1/2012 QoQ Change Net sales (EUR millions)1 1 541 2 351 -34% 1 704 -10% Smart Devices volume
(million units)10.2 16.7 -39% 11.9 -14% Smart Devices ASP (EUR) 151 141 7% 143 6% Gross margin (%) 1.7% 23.0% 15.6% Operating expenses
(EUR millions)2540 752 -28% 556 -3% Contribution margin (%)2 -32.9% -9.2% -18.3% Note 1: Does not include IPR royalty income. IPR royalty income is recognized in Devices & Services Other net sales.
Note 2: The year-on-year decrease in operating expenses resulted from the proportionate allocation of operating expenses being affected by the relative mix of sales and gross profit performance between Mobile Phones and Smart Devices, resulting in lower relative allocations to Smart Devices in the first and second quarters 2012.Net Sales
On a year-on-year basis, the decline in our Smart Devices net sales in the second quarter 2012 was primarily due to lower Symbian volumes, partially offset by sales of Nokia Lumia devices. In addition, Symbian ASPs decreased on a year-on-year basis.On a sequential basis, the decline in our Smart Devices net sales in the second quarter 2012 was primarily due to lower Symbian volumes, partially offset by higher volumes of Nokia Lumia devices. In addition, Symbian ASPs increased and Lumia ASPs decreased on a sequential basis.
Volume
The year-on-year decline in our Smart Devices volumes in the second quarter 2012 continued to be driven by the strong momentum of competing smartphone platforms relative to our Symbian devices, partially offset by sales of 4 million Lumia devices. All regions showed a significant year-on-year decline in the second quarter 2012 except for North America, where the sharp decline in sales of Symbian devices was more than offset by sales of our Lumia devices including the Lumia 900 with AT&T and the Lumia 710 with T-Mobile.On a sequential basis, the decline in our Smart Devices volumes in the second quarter 2012 was primarily driven by lower Symbian volumes in all regions. This more than offset the sequential increase in Nokia Lumia device volumes, which was driven by sales of the Lumia 610 and the Lumia 900 as well as expanded regional distribution, particularly into China and Latin America.
Average Selling Price
The year-on-year increase in our Smart Devices ASP in the second quarter 2012 was primarily due to a positive mix shift towards sales of Nokia Lumia devices which carry a higher ASP than Symbian devices, as well as a positive impact related to deferred revenue on services sold in combination with our devices. Sequentially, the increase in our Smart Devices ASP in the second quarter 2012 was primarily due to a positive mix shift towards sales of Nokia Lumia devices. The ASP of our Lumia devices in the second quarter 2012 was EUR 186, compared to EUR 220 in the first quarter 2012.Gross Margin
The significant year-on-year and sequential decline in our Smart Devices gross margin in the second quarter 2012 was primarily due to the recognition of approximately EUR 220 million of allowances related to excess component inventory, future purchase commitments and an inventory revaluation related to our Lumia, Symbian and MeeGo devices. Increases or decreases to Smart Devices allowances may be required in the future depending on several factors, including future sales performance.In addition, the year-on-year gross margin decline in the second quarter 2012 was due to price reductions across our Symbian portfolio as well as higher fixed costs per unit, such as certain royalties, because of lower sales volumes.
MOBILE PHONES
The following table sets forth a summary of the results for our Mobile Phones business unit for the periods indicated, as well as the year-on-year and sequential growth rates.
MOBILE PHONES
RESULTS SUMMARYQ2/2012 Q2/2011 YoY Change Q1/2012 QoQ Change Net sales (EUR millions)1 2 291 2 568 -11% 2 311 -1% Mobile Phones volume
(million units)73.5 71.8 2% 70.8 4% Mobile Phones ASP (EUR) 31 36 -14% 33 -6% Gross margin (%) 24.1% 24.7% 25.9% Operating expenses
(EUR million)2450 420 7% 472 -5% Contribution margin (%)2 4.3% 8.3% 4.6% Note 1: Does not include IPR royalty income. IPR royalty income is recognized in Devices & Services Other net sales.
Note 2: The year-on-year increase in operating expenses resulted from the proportionate allocation of operating expenses being affected by the relative mix of sales and gross profit performance between Mobile Phones and Smart Devices, resulting in higher relative allocations to Mobile Phones in the first and second quarters 2012.Net Sales
Both on a year-on-year and sequential basis, our Mobile Phones net sales in the second quarter 2012 decreased due to the lower ASP.Volume
On a year-on-year basis, the increase in our Mobile Phones volumes in the second quarter 2012 was primarily due to the continued ramp up of our latest generation of feature phones, such as the Nokia 100 and 101, which we sell to our customers for below EUR 50. However, volumes of our higher priced feature phone portfolio were adversely affected by competition from more affordable smartphones and from competitors with broader portfolios of feature phones with more smartphone-like experiences, such as full touch devices.On a sequential basis, the increase in our Mobile Phones volumes in the second quarter 2012 was also primarily due to the continued ramp up of our latest generation of feature phones which we sell to our customers for below EUR 50. Volumes of our higher priced feature phone portfolio stayed at approximately the same level sequentially.
Average Selling Price
The year-on-year decline in our Mobile Phones ASP in the second quarter 2012 was primarily due to an increased proportion of sales of lower priced devices and price erosion.On a sequential basis, the decline in our Mobile Phones ASP in the second quarter 2012 was also primarily due to an increased proportion of sales of lower priced devices. Sequentially, however, the prices of our feature phones remained approximately at the same level.
Gross Margin
The year-on-year decline in our Mobile Phones gross margin in the second quarter 2012 was primarily due to a negative product mix shift towards lower gross margin feature phones, partially offset by greater cost erosion than price erosion.The sequential decrease in our Mobile Phones gross margin in the second quarter 2012 was primarily due to higher warranty expense, partially offset by greater cost erosion than price erosion. In the first quarter 2012, our gross margin was positively impacted by a warranty provision release benefit as our claims rates and repair costs declined.
LOCATION & COMMERCE
The following table sets forth a summary of the results for Location & Commerce for the periods indicated, as well as the year-on-year and sequential growth rates.
LOCATION & COMMERCE
RESULTS SUMMARYQ2/2012 Q2/2011 YoY Change Q1/2012 QoQ Change Net sales (EUR millions) 283 271 4% 277 2% Non-IFRS gross margin (%) 77.4% 81.6% 77.7% Non-IFRS operating
expenses (EUR millions)185 215 -14% 174 6% Non-IFRS operating
margin (%)14.5% 2.6% 12.9% Net Sales
The year-on-year increase in Location & Commerce net sales in the second quarter 2012 was primarily due to the higher recognition of deferred revenue related to sales of map platform licenses to Nokia’s Smart Devices business unit and higher sales of map content licenses to vehicle customers due to higher consumer uptake of vehicle navigation systems. This was partially offset by a negative sales adjustment related to historical license fees in the normal course of business for a particular customer.Sequentially, the increase in Location & Commerce net sales in the second quarter 2012 was primarily due to higher sales of map content licenses to vehicle customers due to higher vehicle sales as well as higher map update sales. This was partially offset by a negative sales adjustment related to historical license fees in the normal course of business for a particular customer.
Gross Margin
On a year-on-year basis, the decline in Location & Commerce non-IFRS gross margin in the second quarter 2012 was primarily due to a negative sales adjustment related to historical license fees in the normal course of business for a particular customer as well as a shift of research and development operating expenses to cost of sales as a result of the divestment of the media advertising business.On a sequential basis, Location & Commerce non-IFRS gross margin in the second quarter 2012 was approximately flat. This was primarily due to an improved revenue mix from higher margin vehicle map license sales, offset by a negative sales adjustment related to historical license fees in the normal course of business for a particular customer.
Operating Expenses
Location & Commerce non-IFRS research and development expenses decreased 14% year-on-year in the second quarter 2012 primarily due to cost reductions as well as a shift in expenses from research and development to costs of sales related to the divestment of the media advertising business. Location & Commerce non-IFRS research and development expenses increased 10% sequentially in the second quarter 2012 primarily due to project spending relating to software development and map creation.Location & Commerce non-IFRS sales and marketing expenses decreased 28% year-on-year and 7% sequentially in the second quarter 2012. On a year-on-year basis, the decrease was primarily due to cost reduction actions.
Location & Commerce non-IFRS administrative and general expenses increased 17% year-on-year and 5% sequentially in the second quarter 2012. On a year-on-year basis, the increase was primarily due to the higher use of services provided by shared support functions.
Location & Commerce non-IFRS other income and expense for the second quarter 2012 was income of EUR 7 million, compared to zero in the second quarter 2011 and an expense of EUR 6 million in the first quarter 2012. On both a year-on-year and sequential basis, this was primarily due to changes in provisions.
Operating Margin
The higher year-on-year Location & Commerce non-IFRS operating margin in the second quarter 2012 was primarily due to lower operating expenses and higher net sales, partially offset by lower gross margin.The sequential increase in Location & Commerce non-IFRS operating margin in the second quarter 2012 was primarily due to higher net sales.
NOKIA SIEMENS NETWORKS
Nokia Siemens Networks completed the acquisition of Motorola Solutions’ networks assets on April 30, 2011. Accordingly, the results of Nokia Siemens Networks for the second quarter 2012 are not directly comparable to its results for the second quarter 2011.
The following table sets forth a summary of the results for Nokia Siemens Networks for the periods indicated, as well as the year-on-year and sequential growth rates.
NOKIA SIEMENS NETWORKS
RESULTS SUMMARYQ2/2012 Q2/2011 YoY Change Q1/2012 QoQ Change Net sales (EUR millions) 3 343 3 642 -8% 2 947 13% Non-IFRS gross margin (%) 26.6% 26.6% 26.6% Non-IFRS operating
expenses (EUR millions)836 931 -10% 937 -11% Non-IFRS operating
margin (%)0.8% 1.1% -5.0% Net Sales
The following table sets forth Nokia Siemens Networks net sales for the periods indicated, as well as the year-on-year and sequential growth rates, by geographic area.
NOKIA SIEMENS NETWORKS
NET SALES BY GEOGRAPHIC AREAEUR millions Q2/2012 Q2/2011 YoY Change Q1/2012 QoQ Change Europe 990 1 122 -12% 930 6% Middle East & Africa 304 389 -22% 270 13% Greater China 340 403 -16% 209 63% Asia-Pacific 1 028 973 6% 877 17% North America 300 311 -4% 283 6% Latin America 381 444 -14% 378 1% Total 3 343 3 642 -8% 2 947 13% The year-on-year decrease in Nokia Siemens Networks’ net sales in the second quarter 2012 was primarily due to Nokia Siemens Networks’ strategy to focus on mobile broadband, customer experience management and services. Business areas not consistent with the new strategy are in the process of being divested or managed for value. On a year-on-year basis, Nokia Siemens Networks experienced a decline in sales of infrastructure equipment as well as a slower operator investment environment in certain markets, including Europe. This was partially offset by a slight increase in sales of services.
The sequential increase in Nokia Siemens Networks’ net sales in the second quarter 2012 was primarily due to industry seasonality, partially offset by Nokia Siemens Networks’ strategy to focus on mobile broadband, customer experience management and services. On a sequential basis, Nokia Siemens Networks experienced similar rates of growth in infrastructure equipment and services.
Gross Margin
On a year-on-year basis Nokia Siemens Networks’ non-IFRS gross margin in the second quarter 2012 was flat, primarily due to efforts to structurally improve the overall gross margin profile of Nokia Siemens Networks’ portfolio of contracts, with improved pricing processes and a focus on priority markets including Japan, Korea, and North America, offset by negative mix shift towards lower gross margin services revenue.On a sequential basis Nokia Siemens Networks’ non-IFRS gross margin in the second quarter 2012 was flat, primarily due to similar rates of growth in infrastructure equipment and services, combined with higher services gross margins and lower infrastructure equipment gross margins.
Operating Expenses
By the end of the second quarter 2012, Nokia Siemens Networks reduced its number of employees by approximately 10 000 compared to the end of 2011, resulting in significant structural savings in non-IFRS research and development, sales and marketing, and administrative and general expenses.Nokia Siemens Networks’ non-IFRS research and development expenses decreased 6% year-on-year in the second quarter 2012 primarily due to structural cost savings. This was partially offset by the addition of the research and development operations related to the acquired Motorola Solutions networks assets as well as investments in strategic initiatives. On a sequential basis, Nokia Siemens Networks’ non-IFRS research and development expenses decreased 10% in the second quarter 2012 due to structural cost savings.
Year-on-year, Nokia Siemens Networks’ non-IFRS sales and marketing expenses decreased 14% in the second quarter 2012 primarily due to the lower net sales and structural cost savings. This was partially offset by the addition of the sales and marketing operations related to the acquired Motorola Solutions networks assets. On a sequential basis, Nokia Siemens Networks non-IFRS sales and marketing expenses decreased 5% in the second quarter 2012 primarily due to structural cost savings, partially offset by the higher net sales.
Nokia Siemens Networks’ non-IFRS administrative and general expenses decreased 20% year-on-year in the second quarter 2012 primarily due to structural cost savings. This was partially offset by the addition of Motorola Solutions’ network assets. On a sequential basis, Nokia Siemens Networks non-IFRS administrative and general expenses decreased 24% in the second quarter 2012 primarily due to structural cost savings.
Nokia Siemens Networks’ non-IFRS other income and expense for the second quarter 2012 was an expense of EUR 25 million, compared to income of EUR 1 million in the second quarter 2011 and income of EUR 6 million in the first quarter 2012. On both a year-on-year and sequential basis, this was primarily due to changes in provisions, asset retirements, and divestments.
Operating Margin
The lower year-on-year Nokia Siemens Networks non-IFRS operating margin in the second quarter 2012 was primarily due to lower net sales, partially offset by lower operating expenses.The sequential increase in Nokia Siemens Networks’ non-IFRS operating margin in the second quarter 2012 was primarily due to higher net sales combined with lower operating expenses.
Strategy Update and Global Restructuring Program
On November 23, 2011 Nokia Siemens Networks announced its strategy to focus on mobile broadband and services and the launch of an extensive global restructuring program.Nokia Siemens Networks continues to target to reduce its non-IFRS annualized operating expenses and production overheads by EUR 1 billion by the end of 2013, compared to the end of 2011. While these savings are expected to come largely from organizational streamlining, the company will also target areas such as real estate, information technology, product and service procurement costs, overall general and administrative expenses, and a significant reduction of suppliers in order to further lower costs and improve quality.
In the second quarter of 2012, Nokia Siemens Networks recognized restructuring charges and other associated items of EUR 190 million related to this restructuring program, resulting in cumulative charges of EUR 1 billion. In total, Nokia Siemens Networks expects cumulative restructuring charges of approximately EUR 1.2 billion related to this restructuring program before the end of 2012. By the end of the second quarter 2012, Nokia Siemens Networks had cumulative restructuring related cash outflows of approximately EUR 250 million related to this restructuring program. From the third quarter 2012 onwards, Nokia Siemens Networks expects restructuring-related cash outflows to be approximately EUR 350 million in 2012, approximately EUR 400 million in 2013, and approximately EUR 200 million in 2014 related to this restructuring program.
Cash preservation is a clear priority at Nokia Siemens Networks, and the company intends to be self-funding in all aspects of its operations. Nokia Siemens Networks’ restructuring program, combined with the company’s focus on improving its financial performance, is designed to enable the company to end 2012 with higher net cash than at the end of 2011.
SECOND QUARTER 2012 OPERATING HIGHLIGHTS
NOKIA OPERATING HIGHLIGHTS
– In April, Nokia started development of a new manufacturing facility in Vietnam to serve the feature phone market.
– In June, Nokia outlined a range of planned actions aimed at sharpening its strategy, improving its operating model and returning the company to profitable growth. The planned measures include targeted investments in key growth areas, operational changes and a significantly increased cost reduction target. Specifically, planned measures include:
– Reductions within certain research and development projects, resulting in the planned closure of its facilities in Ulm, Germany and Burnaby, Canada;
– Consolidation of certain manufacturing operations, resulting in the planned closure of its manufacturing facility in Salo, Finland. Research and Development efforts in Salo to continue;
– Focusing of marketing and sales activities, including prioritizing key markets;
– Streamlining of IT, corporate and support functions; and
– Reductions related to non-core assets, including possible divestments.
As a result of the planned changes, Nokia plans to reduce up to 10 000 positions globally by the end of 2013.– In June, Nokia announced plans to acquire world-class imaging specialists as well as all technologies and intellectual property from Scalado AB.
– In June, Nokia announced plans to divest Vertu, its luxury mobile phones business to EQT VI, a European private equity firm.
– During the quarter, Nokia announced a number of changes to its senior leadership. In April, Nokia announced that Colin Giles, executive vice president of sales, is stepping down from the Nokia Leadership Team. In May, Esko Aho, executive vice president, Corporate Relations and Responsibility, was appointed to the role of Senior Fellow at the Mossavar-Rahmani Center for Business and Government at Harvard Kennedy School. Aho is continuing to represent Nokia and drive the company’s governmental affairs as a consultative partner, although he will step down from the Nokia Leadership team, effective August 31, 2012 out of respect for the demands of the Harvard appointment. In June, Nokia appointed Juha Putkiranta as executive vice president of Operations; Timo Toikkanen as executive vice president of Mobile Phones; Chris Weber as executive vice president of Sales and Marketing; Tuula Rytila as senior vice president of Marketing and chief marketing officer; and Susan Sheehan as senior vice president of Communications. Putkiranta, Toikkanen and Weber joined the Nokia Leadership Team effective July 1, 2012. Jerri DeVard has stepped down as executive vice president of Marketing and chief marketing officer; Mary McDowell has stepped down as executive vice president of Mobile Phones; and Niklas Savander has stepped down as executive vice president of Markets.DEVICES & SERVICES OPERATING HIGHLIGHTS
SMART DEVICES
– Nokia has continued to expand the breadth and depth of its Lumia range of Windows Phone-based smartphones since their debut in November 2011. Consumers in more than 50 markets around the world can now purchase a Lumia smartphone. Key highlights in the growth of Lumia in the second quarter included:
– In April, the Nokia Lumia 610, Nokia’s most affordable Lumia smartphone to date, went on sale, starting in Asia and expanding to other regions later in the quarter. The Lumia 610 is introducing the Windows Phone platform to a new generation of smartphone users, particularly in key China markets.
– In April, the Nokia Lumia 900 went on sale in the United States exclusively through AT&T. Lumia 900 sales exceeded our expectations from the start at AT&T and was consistently among the top selling smartphones on Amazon in the United States. The device is our first LTE phone and has won praise for its design. According to a survey of US customers conducted for Nokia by the independent research company Nielsen and published in July, 95% of Lumia 900 owners are willing to recommend the device to others. Nokia also launched a non-LTE version of the Lumia 900 in other parts of the world during the second quarter.
– In June, the number of applications in the Windows Phone Marketplace surpassed 100 000, up from more than 50 000 at the start of 2012.– In May, the Nokia 808 PureView, the first smartphone to feature Nokia PureView imaging technologies, went on sale. The device brings together high resolution sensors, exclusive Carl Zeiss optics and Nokia-developed algorithms, which will support new high-end imaging experiences for future Nokia products.
MOBILE PHONES
– Nokia has continued to expand the breadth and depth of its Asha family of mobile phones since their debut in late 2011. The range, now ten products strong, is available across more than 130 markets and receiving among the highest consumer satisfaction scores of any Nokia products. Key highlights in the growth of Asha in the second quarter included:
– In April, Nokia made available Nokia Browser 2.0, a major update for Nokia Series 40 devices. The new version reduces data consumption by up to 85%, meaning that consumers can enjoy faster and cheaper internet access.
– In May, Nokia launched the Nokia 110 and Nokia 112, both running the new Nokia Browser.
– In June, Nokia launched its first full touch Asha feature phones. The three new phone models – the Nokia Asha 305, Nokia Asha 306 and Nokia Asha 311 – offer a fully re-designed touch user interface. The Asha 311 has a capacitive touchscreen device and is powered by a 1GHz processor to provide a great internet experience.
– In June, Nokia made Mail for Exchange available for free in the Nokia Store for the Asha 302 and Asha 303.LOCATION & COMMERCE OPERATING HIGHLIGHTS
Nokia’s Location & Commerce business continued to strengthen its location-based offerings during the second quarter:
– The Nokia Location Platform continued to be adopted by more partners, including Microsoft’s Bing Maps, which is also now using Location & Commerce traffic information and geocoding algorithms, and Ford, whose research organization is using the platform to advance innovation for smart and connected vehicles. Nokia announced that the Nokia Location Platform will be a central part of the Windows Phone 8 experience. As such, Windows Phone 8 partners and developers will be able to use Nokia’s location assets to build location-based apps and experiences of superior quality.
– Nokia announced the availability of free turn by turn navigation with Nokia Drive out of the box for all future Windows Phone 8 users in North America and the United Kingdom.
– Nokia continued to update and enhance existing location applications, including:
– Nokia Maps, the latest version of which brings better sharing and personalization to Lumia smartphones; and
– Nokia Transport, the latest version of which extends coverage and introduces features such as stops nearby, detailed line view and support for multiple tiles.– Nokia launched Nokia City Lens beta, which brings augmented reality to Nokia Lumia, enabling users to orientate themselves and discover and recognize the places in their immediate vicinity in a new way.
– Nokia continued to improve its web offering at maps.nokia.com refining features and introducing a travel discovery element with city pages.
– Nokia entered into an agreement with the Audi Urban Intelligence Assist (AUIA) project aimed at developing connected car technologies that help reduce congestion and improve safety supported by the use of NAVTEQ map data.
– Nokia announced the expansion of its location content offering in India with an increase of coverage by 80% to more than 4200 cities and the launch of Destination Maps in 150 malls in 17 cities.NOKIA SIEMENS NETWORKS OPERATING HIGHLIGHTS
– Nokia Siemens Networks stepped up its mobile broadband deal momentum in the second quarter, including a contract with SOFTBANK MOBILE Corp. in Japan to upgrade its mobile broadband capacity across the country, supplying, deploying and integrating its HSPA+ (3G) and FDD LTE (4G) networks; also in Japan it was announced that Nokia Siemens Networks has deployed the world’s first multi-technology, multi-vendor self-operating 3G and 4G mobile networks in Japan for KDDI.
– Nokia Siemens Networks was also selected by T-Mobile to support its 4G network evolution plan with the modernization of its GSM, HSPA+ core and radio access infrastructure in key markets to improve existing voice and data coverage.
– Other mobile broadband deals in the second quarter included: being selected by Singapore’s StarHub as its 4G mobile broadband infrastructure and services vendor; becoming the sole 4G, LTE radio and core network supplier and expanding 3G and GSM networks for Tele2 in Estonia, Latvia and Lithuania; enabling Croatia’s first commercial 4G services with Hrvatski Telekom; being selected to deliver and manage 4G services in Jeddah for Saudi Arabian Zain KSA and upgrading TOT’s 3G network in Thailand to HSPA+.– In May 2012, Nokia Siemens Networks signed a global reseller agreement with Ruckus Wireless to help operators integrate Wi-Fi networks to deliver cost-effective mobile broadband services, as part of its comprehensive small cells portfolio. Nokia Siemens Networks also extended its comprehensive small cells portfolio with the launch of an enhanced range of picocell base stations and 3G Femto access points, and announced a US-based trial of its Hot Zone approach for increasing network capacity in the Chicago area.
– At International CTIA Wireless 2012, in May, Nokia Siemens Networks unveiled its ‘Intelligent IP Edge’, the world’s most advanced network gateway that enables operators to deliver a better mobile broadband experience and reduce running costs using Nokia Siemens Networks’ Liquid Net approach. Nokia Siemens Networks also launched a new CDMA base station, bringing the benefits of its globally recognized Flexi Multiradio Base Station platform to CDMA operators whilst reducing base station operating costs by up to 70%, and with 4G upgrade capability underlining Nokia Siemens Networks’ commitment to mobile broadband technology evolution.
– In June, Nokia Siemens Networks achieved 1.3 Gbps in China using its commercial Flexi base station hardware, a new global TD-LTE speed record.
– Nokia Siemens Networks was recognized for its advances in Customer Experience Management (CEM) at the Global Telecoms Business (GTB) Innovation Awards 2012 in the wireless infrastructure category where it won a joint award with Telkomsel for its use of Nokia Siemens Networks’ CEM on Demand portfolio. Guangdong MCC in China has signed up to Nokia Siemens Networks’ CEM software and services, enabling it to improve customer experience by providing a unified view of its customer data and continuous reporting of usage trends.
– During the second quarter, Nokia Siemens Networks completed the sale of its microwave transport business to DragonWave, and the sale of its fixed line Broadband Access business to ADTRAN.
