Electronics Production | November 29, 2006

Nokia lower forecast and plans cutbacks

Nokia lowers its forecast for the next year's profit. Operating margin is now expected to reach 15 percent and not 17 percent which earlier was expected.
The lower forecast is because of the weaker margins in the system business Nokia Siemens Networks. The operating margin in the system business is of 10 percent positive during the next two years. However this business is expected to grow by 10 percent annually during the next year. Nokia Devices, including mobile phones and multimedia, has a target for its operating margin of 17 percent during the next two years which is keeping Nokia's margins up when Nokia's systems is dragging.

During the capital markets day in Amsterdam Nokia also revealed that its R&D operations will cut costs by about 10 percent. Exactly how this will turn out is yet unknown.


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