Nokia lowers the mobile device industry outlook for Q4 2008

Nokia President and CEO, Olli-Pekka Kallasvuo, highlighted the benefits of Nokia's brand, scale and number one market position, stating: "2009 will be challenging for our industry, however we have a strong, enviable base to build on and I believe we will continue to strengthen our position on many fronts. Building on our operational flexibility, Nokia is acting to reduce costs appropriately in the current slowing environment. At the same time, we remain fully committed to making the investments to build the future of our exciting industry and Nokia's continued competitiveness." Nokia CFO, Rick Simonson, emphasized that appropriate cost reductions are being effected now and are continuing in plans for 2009 and 2010: "Nokia's highly variable, low fixed cost business model allows us to scale to a declining market. We are also acting on all fronts to reduce our costs beyond what may be attributable solely to the scalable aspects of the business model - moving to reduce cost of goods sold even further, reduce operational expenditure appropriately, and scale back capital expenditure. We expect these strong actions to offset, in part, the negative impact of slowing sales." Outlook for Nokia and the mobile device industry - fourth quarter 2008 The mobile device market slowdown has continued more rapidly than previously expected since Nokia issued an update on November 14, 2008. The industry continues to be impacted by the effects of a global consumer pull-back in spending, currency volatility, and decreased availability of credit. Nokia believes the slowdown is apparent in varying degrees across all markets, while the most recent incremental impact in the emerging markets has been more pronounced than in other markets. As a result, and while noting the lack of visibility due to the factors cited above, Nokia is revising its fourth quarter 2008 outlook as follows: - Nokia now estimates that fourth quarter 2008 industry mobile device volumes will be lower than the previous estimate of approximately 330 million units, which would result in full year 2008 industry mobile device volumes below the earlier estimate of 1.24 billion units. - Nokia believes there is insufficient visibility in the marketplace to confirm its prior estimate for its fourth quarter 2008 mobile device market share, which was expected to be at the same level or slightly up from an estimated 38% in the third quarter 2008.