Finals Presentation @ NBTC 2011

1. Emerging on Top Corporate Strategy for Nokia Saturday, March 19, 2011 Daniel Rodic, Josh Xu, MarazRahman, Michael Le Rotman Commerce Consulting Association

2. Agenda Saturday, March 19, 2011 Corporate Strategy for Nokia 2 Executive Summary 1 Developing Market Strategy 2 Developed Market Strategy 3 Risk & Mitigation Plans 4 Implementation & Key Takeaways 5

3. Executive Summary Corporate Strategy for Nokia 3 Saturday, March 19, 2011

4. Nokia is a full service, global telecommunications company, with leadership in the emerging markets. Saturday, March 19, 2011 Corporate Strategy for Nokia 4 Recently, Nokia has experienced a decline in developed markets (e.g. a 15% decline in European sales in Q4 ‘09) or complete exits from previously successful countries. Complication How can Nokia compete successfully in the global mobile phone and telecommunications market? In which market(s) should they compete? What phone-types should they focus on for each market? What services can Nokia leverage in each market?

5. Nokia has strengths in developing markets, but is missing out on the huge North American Smart Phone market. Saturday, March 19, 2011 Corporate Strategy for Nokia 5 World Mobile Phone Markets Projected Nokia Revenues by Region (in $ Thousands) 2010 - 2013 Projected Smart Phone Revenues by Region (in $ Thousands) 2010 - 2013 Nokia should focus on their dominance in Emerging Markets while innovating in the US to capture an increased share of the Feature Smartphone Market.

6. Nokia should compete in the developedanddeveloping markets, but with distinct strategy in each. Saturday, March 19, 2011 Corporate Strategy for Nokia 6 Enhanced Phones Smart Phone Hardware + Android OS

7. Developing Market Strategy Corporate Strategy for Nokia 7 Saturday, March 19, 2011

9. Highest App Revenue

10. First Mover Advantage

11. More Access to App Revenue

12. Higher Margins

13. Growing Middle Class

14. Changing Preferences

15. Proven Success

16. Mass Appeal

18. Small Potential Market

19. Lack of Disposable Income

20. Low Barriers to Entry

21. Brand does not carry value

22. Low Margins

23. Low Turnover

24. Limited Disposable Income

25. Investment in AppsThe Enhanced Phoneallows Nokia to capitalize on the change in demographics, and reap additional revenues through new mobile apps.

26. Projected revenues in Developing Markets of Enhanced Phones is much higher than revenues from Basic Phones Saturday, March 19, 2011 Corporate Strategy for Nokia 9 Comparison between Projected Revenues (in Thousands of $ USD) from Enhanced Phones versus Basic Phones in the Developing Markets Sensitivity Analysis on Enhanced Phone Revenues Even at a 45% Price Discount, Projected revenues for Enhanced Phones is Double the Revenues of the Basic Phone

27. Developed World Strategy Corporate Strategy for Nokia 10 Saturday, March 19, 2011

29. Leverages Hardware Advantage

30. Meets Consumer Demand for a Multifunctional Device

31. App Revenue

32. Low Production Cost

34. No Operating System

35. Low Margins

36. Low Growth

37. Low Barrier to Entry

38. Aging Technology

39. Does Not Take Advantage of New Infrastructure of New Consumer Tastes Nokia should leverage competencies in hardware and existing Android OS to be immediately competitive in developed Smart Phone markets.

40. Partnering with Android allows for a reduction in Nokia Operating System R&D expenses. Saturday, March 19, 2011 Corporate Strategy for Nokia 12 Effect of Reduction in R&D over Three Years (in € Millions) The 17.8% increase in net income can be put towards Android-compatible hardware development to help compete with other Handset Manufacturers

41. Risk & Mitigation Plans Corporate Strategy for Nokia 13 Saturday, March 19, 2011

42. Nokia faces three key risks with the proposed strategies. Saturday, March 19, 2011 Corporate Strategy for Nokia 14

43. Implementation & Key Takeaways Corporate Strategy for Nokia 15 Saturday, March 19, 2011

44. There are two distinct work streams for each strategy. Saturday, March 19, 2011 Corporate Strategy for Nokia 16 High Launch App Campaign in Developing Market Transition from Basic to Enhanced Phones in Developing Markets Phase out Meego OS R&D Activities 2010 Begin Android Hardware Development Launch Nokia-Android Smart Phone Medium Priority Phase out low-end phones in Developed Markets (North America, EU) 2011 Low Time from Today 2012 +

45. The lesson is clear that a one-size-fits-all approach just doesn’t work. Olli-PekkaKallasvuo

46. Appendix Corporate Strategy for Nokia 18 Saturday, March 19, 2011

47. Sensitivity Analysis on Projected Developing Market Revenues for 2010 – 2013 Saturday, March 19, 2011 Corporate Strategy for Nokia 19

48. Assumptions on R&D Reduction Calculation Saturday, March 19, 2011 Corporate Strategy for Nokia 20

49. Sources http://www.forum.nokia.com/Distribute/Ovi_Store_statistics.xhtml http://www.mobilecrunch.com/2010/11/18/nokia-3-million-apps-downloaded-from-ovi-store-every-day-165-million-ovi-users/ http://gigaom.com/2009/11/30/for-nokia%E2%80%99s-ovi-the-world-minus-the-u-s-is-enough/ http://www.symbian-guru.com/welcome/2010/02/distimo-shows-ovi-store-apps-are-cheaper-than-iphone-apps.html http://www.businessweek.com/technology/content/feb2011/tc20110214_758033.htm Saturday, March 19, 2011 Corporate Strategy for Nokia 21