1 © 2006 Nokia Nokia World.ppt / 2006-09-07 / Initials

Company Confidential

Nokia in China

Capital Market Days

Colin GilesSenior Vice PresidentCMO, Nokia China

2 © 2006 Nokia Nokia World.ppt / 2006-09-07 / Initials

Company Confidential

Strong Growth Continuing in China

0

100

200

2003 2004 2005 2006E

Mo

bile

Dev

ice

Mar

ket V

olu

me

(m)

0 %

10 %

20 %

30 %

40 %

Mo

bile

Dev

ice

Pen

etra

tio

n %

Source : Nokia estimates

Market Volume Subscription Penetration

3 © 2006 Nokia

• Confident & optimistic

• Strong national pride

• Busy & full life but embrace fun & leisure

• Growing demand for new experiences & stimulation

• Informed consumers

• Emerging middle-class

• Internet & gadget-savvy youth

• Quality first

• Fashion & design key choice criteria

• Rural Chinese demand telecom service

Chinese Consumers

4 © 2006 Nokia

• Seasonality consistent

• Market moving to smaller cities; fragmenting retail in these markets

• Large retail chains consolidating in the larger cities

• Operator bundles taking a larger share of the market; China Mobile Super Low End a strong contributor to growth

• Convergence story is beginning

Current Market Trends

5 © 2006 Nokia

33.9%443MMobile Phones

0.6%8MDigital Cameras

8%100MMP3

6.8%88MEmail

9.5%123MInternet

Penetration (%)

USERS

Converging to Mobile

Source: CNNIC, July’06 (Internet); IMI ’05-’06 (MP3); IResearch ’06 (Email),

CMMS ’06 (Digital Camera); MII Oct’06 (Mobile Phones)

6 © 2006 Nokia Nokia World.ppt / 2006-09-07 / Initials

Company Confidential

7 © 2006 Nokia

• Established 21 years ago

• Over 7200 employees

• External Sales force of 6000+

• 6 Research & Development Units

• Product Creation

• Networks Technology

• Nokia Research Center

• 4 Manufacturing Units

• Mobile Phone Manufacturing in Beijing and Dongguan

• Networks in Beijing and Suzhou

Nokia’s presence in China

8 © 2006 Nokia

• Sales of 3.95 billion EUR in Q1 – Q3/06

• Year on year sales growth ofover 45%

• Nokia exports of over 2.8 BEUR in 2005

• 13 Quarters of consecutive market share growth (Mainland)

• 36.6 million units sold in Q1 – Q3/06

Nokia in China

9 © 2006 Nokia

• Established a strong sales & marketing platform

• Do not under-estimate distribution

• Presence at Retail

• Chinese Vendors couldn’t follow through

•Quality

•Sustainable Investments

•R&D

• Strong Brand Presence

Nokia SuccessStory

10 © 2006 Nokia Nokia World.ppt / 2006-09-07 / Initials

Company Confidential

Mobile Phone Brand Preference

0

20

40

60

Q4'05 Q1'06 Q2'06 Q3'06

Nokia

Motorola

Samsung

SonyEricsson

Any domesticBrand

DK/NS

Source : Nokia estimates

11 © 2006 Nokia

• Maintain our leadership through• Scale• Quality• Distribution/Coverage• Brand• Execution

• Enhancing our relationships with• National & Provincial Distributors• National & Provincial Retailers• Operators

• Preparing for 3G• Expanding to new

experience-led domains• Imaging• Music• E-mail• Mobile Internet

Nokia Strategy in China

12 © 2006 Nokia Nokia World.ppt / 2006-09-07 / Initials

Company Confidential

•3G opens up the market to competition and new services

•Where’s the subscriber ceiling?•Imaging devices are now well accepted •After SMS – Is music the next driver for value

added services growth?•Can mobile phones bring Internet access

to the masses?•Enterprise potential is huge

Market Potential

13 © 2006 Nokia Nokia World.ppt / 2006-09-07 / Initials

Company Confidential

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