Nokia - Company Announcement

Nokia lowers Devices & Services first quarter 2012 outlook and provides second quarter 2012 outlook

Difficult financial performance reflects company in transition

Positive early momentum in Lumia smartphone strategy

Nokia Corporation
Stock exchange release
April 11, 2012 at 15.00 (CET+1)

Espoo, Finland - Nokia today provided preliminary information on certain
aspects of its first quarter 2012 financial performance, including a lowered
first quarter 2012 outlook for Devices & Services. During the first quarter
2012, multiple factors negatively affected Nokia's Devices & Services business
to a greater extent than previously expected. These factors included: 

- Competitive industry dynamics, which negatively affected net sales in the
Mobile Phones and Smart Devices business units, particularly in India, the
Middle East and Africa and China; and 
- Gross margin declines, particularly in the Smart Devices business unit.

The impact of these factors on the non-IFRS Devices & Services operating margin
in the first quarter 2012 was partially offset by a significant benefit from
lower warranty costs. 

Updated outlook for Devices & Services for the first quarter 2012:
Nokia currently estimates that its non-IFRS Devices & Services operating margin
in the first quarter 2012 was approximately negative 3 percent, compared to the
previously expected range of “around breakeven, ranging either above or below
by approximately 2 percentage points” primarily due to the factors noted above. 

Outlook for Devices & Services for the second quarter 2012:
Nokia expects its non-IFRS Devices & Services operating margin in the second
quarter 2012 to be similar to or below the first quarter 2012 level. This
outlook reflects that the first quarter 2012 benefit related to lower warranty
costs is expected to be non-recurring, as well as expectations regarding a
number of factors including: 

- competitive industry dynamics continuing to negatively affect the Smart
Devices and Mobile Phones business units; 
- timing, ramp-up, and consumer demand related to new products; and
- the macroeconomic environment."Our disappointing Devices & Services first quarter 2012 financial results and
outlook for the second quarter 2012 illustrates that our Devices & Services
business continues to be in the midst of transition," said Stephen Elop,
President and CEO of Nokia. "Within our Smart Devices business unit, we have
established early momentum with Lumia, and we are increasing our investments in
Lumia to achieve market success. Our operator and distributor partners are
providing solid support for Windows Phone as a third ecosystem, as evidenced
most recently by the launch of the Lumia 900 by AT&T in the United States."

Additional commentary on the first quarter 2012 for Devices & Services and
Nokia: 
Nokia currently estimates that Devices & Services net sales in the first
quarter 2012 were EUR 4.2 billion, comprised of Mobile Phones net sales of EUR
2.3 billion (71 million units), Smart Devices net sales of EUR 1.7 billion (12
million units), and Devices & Services Other net sales of EUR 0.2 billion.
Based on the preliminary view, Nokia ended the first 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 sequentially. 

Nokia currently estimates that Devices & Services gross margin (including
Devices & Services Other) for the first quarter 2012 was approximately 25%,
with Mobile Phones gross margin of approximately 26% and Smart Devices gross
margin of approximately 16%. 

In the first quarter 2012, Nokia sold more than 2 million Lumia devices at an
average selling price of approximately EUR 220 (reported within the Smart
Devices business unit). Furthermore, Nokia has seen sequential growth in Lumia
device activations every month since starting sales of Lumia devices in
November 2011. Lumia has gained market share with both distribution partners
and consumers. The Windows Phone ecosystem is also attracting developers and
has expanded rapidly with more than 80,000 applications available. 

Nokia currently estimates that at the end of the first quarter 2012, the
company's gross cash and other liquid assets were approximately EUR 9.8
billion, and Nokia's net cash and other liquid assets were approximately EUR
4.9 billion. The sequential decline in net cash and other liquid assets was
driven by Devices & Services, which experienced unfavorable and mostly
non-recurring net working capital changes as well as operating losses. Nokia
Siemens Networks contributed positively to Nokia's cash flow in the first
quarter 2012 due to net working capital improvements. This was despite Nokia
Siemens Networks having a preliminarily estimated non-IFRS operating margin of
approximately negative 5 percent in the first quarter 2012, in line with the
previously provided outlook. 

Actions to Address Competitive Industry Dynamics Affecting Devices & Services
Nokia is quickly taking action. Nokia will continue to increase its focus on
accelerating Lumia sales, as well as on lowering the company's cost structure,
improving cash flow and maintaining a strong financial position. 

- In the Smart Devices business unit, Nokia is increasing investments in Lumia
to bring more products to more consumers in more markets. 
- In the Mobile Phones business unit, Nokia is taking tactical pricing actions
in the near term and plans to bring new products to market in the second
quarter 2012. 
- Nokia will accelerate planned cost reductions and will pursue additional
significant structural actions if and when necessary. "We are continuing to increase the clock speed of the company," said Stephen
Elop, President and CEO of Nokia. "The change is tangible, and we are proud of
the way Nokia employees are quickly responding to the needs of consumers and
partners."

Nokia will provide full first quarter results and more details when it reports
its first quarter 2012 results on April 19, 2012. 

Nokia will be hosting a conference call today at 13:30 UK time (8:30 EST). The
dial-in number for media (listen only - the question and answer session will be
limited to financial analysts and investors only) is +1 706 634 5012.
Conference ID: 67681834. 

The dial-in number for financial analysts and investors is US: +1 888 636 1561.
Conference ID: 67681834. UK: +44 1452 560 299. Conference ID: 67997871. 

A replay of the call will be available soon after the call completion. The
replay number is US: +1 800 585 8367.  Conference ID: 67681834. UK: +44 1452 55
0000. Conference ID: 67997871. 

About Nokia
Nokia is a global leader in mobile communications whose products have become an
integral part of the lives of people around the world. Every day, more than 1.3
billion people use their Nokia to capture and share experiences, access
information, find their way or simply to speak to one another. Nokia's
technological and design innovations have made its brand one of the most
recognized in the world. For more information, visit
http://www.nokia.com/about-nokia 

Forward-looking statements
It should be noted that certain statements herein that are not historical facts
are forward-looking statements, including, without limitation, those regarding:
A) the expected plans and benefits of our partnership with Microsoft to bring
together complementary assets and expertise to form a global mobile ecosystem
for smartphones; B) the timing and expected benefits of our new strategies,
including expected operational and financial benefits and targets as well as
changes in leadership and operational structure; C) the timing of the
deliveries of our products and services; D) our ability to innovate, develop,
execute and commercialize new technologies, products and services; E)
expectations regarding market developments and structural changes; F)
expectations and targets regarding our industry volumes, market share, prices,
net sales and margins of our products and services; G expectations and targets
regarding our operational priorities and results of operations; H) expectations
and targets regarding collaboration and partnering arrangements; I) the outcome
of pending and threatened litigation; J) expectations regarding the successful
completion of acquisitions or restructurings on a timely basis and our ability
to achieve the financial and operational targets set in connection with any
such acquisition or restructuring; and K) statements preceded by “believe,”
“expect,” “anticipate,” “foresee,” “target,” “estimate,” “designed,” “aim”,
“plans,” “will” or similar expressions. These statements are based on
management's best assumptions and beliefs in light of the information currently
available to it. Because they involve risks and uncertainties, actual results
may differ materially from the results that we currently expect. Factors that
could cause these differences include, but are not limited to: 1) our success
in the smartphone market, including our ability to introduce and bring to
market quantities of attractive, competitively priced Nokia products with
Windows Phone that are positively differentiated from our competitors'
products, both outside and within the Windows Phone ecosystem; 2) our ability
to make Nokia products with Windows Phone a competitive choice for consumers,
and together with Microsoft, our success in encouraging and supporting a
competitive and profitable global ecosystem for Windows Phone smartphones that
achieves sufficient scale, value and attractiveness to all market participants;
3) the difficulties we experience in having a competitive offering of Symbian
devices and maintaining the economic viability of the Symbian smartphone
platform during the transition to Windows Phone as our primary smartphone
platform; 4) our ability to realize a return on our investment in next
generation devices, platforms and user experiences; 5) our ability to produce
attractive and competitive feature phones, including devices with more
smartphone-like features, in a timely and cost efficient manner with
differentiated hardware, software, localized services and applications; 6) the
intensity of competition in the various markets where we do business and our
ability to maintain or improve our market position or respond successfully to
changes in the competitive environment; 7) our ability to retain, motivate,
develop and recruit appropriately skilled employees; 8) our ability to
effectively and smoothly implement the new operational structure for our
businesses, achieve targeted efficiencies and reductions in operating expenses;
9) the success of our Location & Commerce strategy, including our ability to
maintain current sources of revenue, provide support for our Devices & Services
business and create new sources of revenue from our location-based services and
commerce assets; 10) our success in collaboration and partnering arrangements
with third parties, including Microsoft; 11) our ability to increase our speed
of innovation, product development and execution to bring new innovative and
competitive mobile products and location-based or other services to the market
in a timely manner; 12) our dependence on the development of the mobile and
communications industry, including location-based and other services
industries, in numerous diverse markets, as well as on general economic
conditions globally and regionally; 13) our ability to protect numerous
patented standardized or proprietary technologies from third-party infringement
or actions to invalidate the intellectual property rights of these
technologies; 14) our ability to maintain and leverage our traditional
strengths in the mobile product market if we are unable to retain the loyalty
of our mobile operator and distributor customers and consumers as a result of
the implementation of our strategies or other factors; 15) the success,
financial condition and performance of our suppliers, collaboration partners
and customers; 16) our ability to manage efficiently our manufacturing and
logistics, as well as to ensure the quality, safety, security and timely
delivery of our products and services; 17) our ability to source sufficient
amounts of fully functional quality components, sub-assemblies, software and
services on a timely basis without interruption and on favorable terms; 18) our
ability to manage our inventory and timely adapt our supply to meet changing
demands for our products; 19) any actual or even alleged defects or other
quality, safety and security issues in our product; 20) the impact of a
cybersecurity breach or other factors leading to any actual or alleged loss,
improper disclosure or leakage of any personal or consumer data collected by us
or our partners or subcontractors, made available to us or stored in or through
our products; 21) our ability to successfully manage the pricing of our
products and costs related to our products and operations; 22) exchange rate
fluctuations, including, in particular, fluctuations between the euro, which is
our reporting currency, and the US dollar, the Japanese yen and the Chinese
yuan, as well as certain other currencies; 23) our ability to protect the
technologies, which we or others develop or that we license, from claims that
we have infringed third parties' intellectual property rights, as well as our
unrestricted use on commercially acceptable terms of certain technologies in
our products and services; 24) the impact of economic, political, regulatory or
other developments on our sales, manufacturing facilities and assets located in
emerging market countries; 25) the impact of changes in government policies,
trade policies, laws or regulations where our assets are located and where we
do business; 26) the potential complex tax issues and obligations we may incur
to pay additional taxes in the various jurisdictions in which we do business;
27) any disruption to information technology systems and networks that our
operations rely on; 28) unfavorable outcome of litigations;  29) allegations of
possible health risks from electromagnetic fields generated by base stations
and mobile products and lawsuits related to them, regardless of merit; 30)
Nokia Siemens Networks ability to implement its new strategy and restructuring
plan effectively and in a timely manner to improve its overall competitiveness
and profitability; 31) Nokia Siemens Networks' success in the
telecommunications infrastructure services market and Nokia Siemens Networks'
ability to effectively and profitably adapt its business and operations in a
timely manner to the increasingly diverse service needs of its customers; 32)
Nokia Siemens Networks' ability to maintain or improve its market position or
respond successfully to changes in the competitive environment; 33) Nokia
Siemens Networks' liquidity and its ability to meet its working capital
requirements; 34) Nokia Siemens Networks' ability to timely introduce new
competitive products, services, upgrades and technologies; 35) Nokia Siemens
Networks' ability to execute successfully its strategy for the acquired
Motorola Solutions wireless network infrastructure assets; 36) developments
under large, multi-year contracts or in relation to major customers in the
networks infrastructure and related services business; 37) the management of
our customer financing exposure, particularly in the networks infrastructure
and related services business; 38) whether ongoing or any additional
governmental investigations into alleged violations of law by some former
employees of Siemens may involve and affect the carrier-related assets and
employees transferred by Siemens to Nokia Siemens Networks; and 39) any
impairment of Nokia Siemens Networks customer relationships resulting from
ongoing or any additional governmental investigations involving the Siemens
carrier-related operations transferred to Nokia Siemens Networks, as well as
the risk factors specified on pages 13-47 of Nokia's annual report Form 20-F
for the year ended December 31, 2011 under Item 3D. “Risk Factors.” Other
unknown or unpredictable factors or underlying assumptions subsequently proving
to be incorrect could cause actual results to differ materially from those in
the forward-looking statements. Nokia does not undertake any obligation to
publicly update or revise forward-looking statements, whether as a result of
new information, future events or otherwise, except to the extent legally
required. 

Media and Investor Contacts:

Nokia
Communications
Tel. +358 7180 34900
Email: press.services@nokia.com

Investor Relations Europe:
Tel. +358 7180 34927

Investor Relations US:
Tel. +1 914 282 0145

www.nokia.com