FUTURE SCRENIO OF NOKIA

HMD Global Country Head says the brand is looking to emerge a top player in the
country over the next 3-5 years

Nokia, once the largest handset brand, re-entered India earlier this year with its Android-based
smartphones and feature phones.
HMD Global, the Finnish firm that manufactures and markets Nokia handsets, is looking to emerge a top
player in the market over the next 3-5 years by banking on young customers and the brand’s solid
reputation.Ajey Mehta, Vice-President and Country Head - India, HMD Global, in an interview
to BusinessLine talks about Nokia’s comeback plans, the response so far and 4G feature phone plans.

Excerpts:

Could you run us through the response Nokia has received post its comeback?

We have launched four feature phones and three smartphones. The response has been amazing. We do see
a lot of opportunities going forward.

We launched Nokia 3 and Nokia 5 (smartphones) offline. We ramped up our stocks, and even then,
demand has been outstripping supply. We launched Nokia 6 exclusively through Amazon and it was sold
out within minutes.

We are looking to be among the top players in the next 3-5 years.

Why did you opt for Android and not Windows?

Android is the operating system of choice. Around 85 per cent of the market is Android. We are in the
business of delivering experience where the consumer is at the centre of everything we do. And
consumers have endorsed Android as the operating system of their choice.

Your present offerings are priced ₹9,000-15,000, a segment dominated by Chinese players. How
different is your strategy then?

We will attempt to have an offering for everybody and play across all price points. So we do plan to go up
and down the price points over a period of time.

We started with the ₹9,000-15,000 range as it is where 50-60 per cent of the market is. So we entered a
segment where there is maximum opportunity.
However, we will deliver products based on strong design and craftsmanship, real-life experience and
pure Android (the operating system is more or less similar to how Google has made it, with least
modifications.).

Will you explore the 4G feature phone segment?

We will. We are waiting for the segment to evolve and keeping a close watch.

Going forward, what will be your channel strategy then?

We determine the channel strategy depending on where and how the customer shops.

For us, the offline channel is very important. We have 450-plus exclusive distributors to cover 90,000
stores. With their help, we hope to grow to larger numbers in the future.

The online channel is almost 30 per cent of the market and most of our target consumers are there already.
So the channel strategy for us will be the function of the consumer we target.

If so, will you have segregated online and offline portfolios?

In the future, we would like to take all our products across all the channels. Nokia is a people’s brand and
we would like to maximise the reach of our devices.

But given the limited resources — in terms of products and in managing the business — we have at
present, it has been decided to keep our online and offline portfolios mutually exclusive.

Does such exclusive portfolios help?

There is no one winning formula. It varies from product to product, and also on the consumers. For
example, if a product has strong specs, it can work offline. If it has a better touch-and-feel quotient, it
may be easier to take it offline.

Chinese players have been harping on specs and higher megapixels as their USPs. What is your
strategy?

We are not shy of the specs of our phones. Our specs are equal if not better than competition.

But, we talk of consumer benefits. We are driving real-life experiences. We are there to provide to the
consumer what they need, and at a price at which we think the price-value equation is fair. Our strategy
will not be based on what the competition does.

Market sources say Nokia is banking on its previous brand heritage to push sales. Your comments...
I would disagree. I do not think people buy a phone just because the heritage of the brand is strong. Of
course, the brand helps, but the product has to deliver. And people have appreciated our (devices’)
features.

So what will be the ideal portfolio size for you?

It is difficult to say at this point. I believe, our products should straddle across all channels and all
consumers. The brand’s positioning has stood us in good stead previously, and also now.

Are you looking at standalone Nokia stores or online ones?

As the business scales up, we will evaluate the commercial viability of such stores. The stores will have to
be profitable and stand on their own feet.

We do have plans for an exclusive online store sometime in the future.

FOCUS ON DIGITAL HEATH PROGRAMME

Nokia today announces that it has initiated a review of strategic options for its Digital Health business,
which is part of Nokia Technologies. Digital Health's business portfolio includes consumer and enterprise
products, and it manufactures and sells an ecosystem of hybrid smart watches, scales and digital health
devices to consumers and enterprise partners.

The strategic review of the Digital Health business may or may not result in any transaction or other
changes. Any further announcements about the Digital Health business will be made if and when
appropriate. The Patent Business, Brand Partnerships and Technology Licensing units in Nokia
Technologies are not in the scope of this review.

We create the technology to connect the world. Powered by the research and innovation of Nokia Bell
Labs, we serve communications service providers, governments, large enterprises and consumers, with
the industry's most complete, end-to-end portfolio of products, services and licensing.

Nokia is enabling the infrastructure for 5G and the Internet of Things, and shaping the future of
technology to transform the human experience. www.nokia.com
PRESENT SCRENIO OF NOKIA
Nokia Shipped Over 4 Million
Smartphones in Q4 2017, Captured 1
Percent of the Market
Nokia seems to have witnessed a steady increase in shipments ever since the brand returned with
Android-powered smartphones. As per Counterpoint Research, Nokia licensee HMD Global managed to
capture 1 percent of global market share in Q4 2017. Following several smartphone announcements by
the company in 2017, the Nokia brand is now making its way back into the global mobile market with
accelerated growth. The current HMD Global portfolio consists of Nokia 2, Nokia 3, Nokia 5, Nokia 6,
Nokia 7, Nokia 8, and multiple variants of Nokia 3310, and more Nokia Android phones will be launched
at MWC 2018 in late February.

Counterpoint Research has shared HMD Global shipping figures with Nokiamob, claiming that Nokia
smartphones grabbed 1 percent of the global smartphone shipments in Q4 2017. This market share, the
report says, translates to around 4.15 million units shipped in the last quarter.

According to the report, HMD Global's Nokia smartphones sales stands at 8.45 million over the last year.
Recently, in another report, Counterpoint had claimed that 2.8 million Nokia Android smartphones and
13.5 million Nokia feature phones were shipped in Q3 2017 alone. Interestingly, Nokia had reportedly
shipped 9.8 million Lumia smartphones in the same time period after launch.

"Nokia HMD captured 1 percent market share in Q4 2017 smartphone market. Nokia's smartphones
have been well received in the market making it grow rapidly in recent quarters. The brands sentimental
value within dealers and customers paired with quality smartphone launches is helping Nokia gain
further market share. The brand has diverse portfolio covering multiple price band category helping it
expand further in volume," Counterpoint Research was quoted as saying.

Since it entered the smartphone market last year, HMD Global has regularly launched smartphones with
Nokia branding. After the Microsoft deal, the first handset launched in partnership with HMD Global was
the Nokia 150. In January 2017, the Android-based Nokia 6 was released in China, and at the Mobile
World Congress 2017, Nokia grabbed global attention, with the launch of the revamped Nokia 3310
(2017) model, along with Nokia 3, Nokia 5, and Nokia 6 Arte Black.

Now, from budget smartphones like the Nokia 2 to the premium Nokia 8 and the 4G variant of the
Nokia 3310, HMD offers phones in most price segments for prospective buyers. Meanwhile, HMD Global
is all set to launch its latest lineup of smartphones running on Android at MWC 2018. Speculations are
already rife that Nokia 9 and Nokia 1 will steal the limelight at the event.

Even if right now it’s a Samsung Galaxy or iPhone that sits in your palm, there’s no denying Nokia’s
salience as a brand. Long before app stores were even a thing, the Nokia 3310 introduced millions of us to
the concept of mobile phones thanks to its user-friendly interface, robust design and, err, Snake.
But while Nokia will always muster up warm feelings of nostalgia, there remains question marks over
whether the brand possesses enough vision to survive in the smartphone era.

Microsoft’s $7.2bn acquisition of Nokia’s devices and services business in 2014 remains one of the most
disastrous deals in consumer tech history. Just two years after it was signed, Microsoft was forced to
scrap its Nokia-led smartphone business altogether, writing off $950m and cutting 1,850 jobs in the
process. In fact, the deal is thought to have resulted in losses of up to $8bn for Microsoft. Nokia phones, it
seemed, were destined to become a relic of the past.

But then, in 2016, Microsoft sold its license to sell phones under the Nokia brand. This brand was worth a
towering $300bn and controlled 70% of the mobile phone market share at the height of its powers. But
Microsoft wasn’t even close to recouping its money on Nokia.

The Nokia phone business was acquired by a subsidiary of iPhone manufacturer Foxconn for just $350m.
The remaining Nokia business, meanwhile, focuses on new technology including 5G and high-end virtual
reality cameras. And the licence to sell Nokia phones was bought by HMD Global.

HMD Global was formed by former Finnish Nokia employees with the sole purpose of bringing the brand
back to the mobile phone market. That includes CMO Pekka Rantala, who previously worked at Nokia
for 17 years, latterly as SVP of global marketing, before joining Angry Birds creator Rovio as CEO.

Speaking to Marketing Week, Rantala has all the giddy excitement of someone who believes his bosses
may just have pulled off the bargain of the century.

“We were given a once in a lifetime opportunity to revive one of the greatest consumer brands of all
time,” he says. “It’s a 152-year-old brand that’s loved across the world. And that love isn’t just about
nostalgia either – some of the biggest demand we’re seeing for new Nokia smartphones is coming from
millennials who want an alternative!”

Moving beyond nostalgia

There’s no doubting Rantala when it comes to Nokia’s brand awareness. According to You Gov
BrandIndex, Nokia (with a score of 93) has more brand awareness among UK consumers than the iPhone
(on 92.3).

But when you switch this scoring to quality, the stats paint a very difference picture. Over the last six
months, Nokia’s quality perceptions have fallen 2.1 points to just 15.4. Samsung and Apple, which
occupy the top two spots, have a combined quality score of 72.5 points.

HMD recently launched the first flagship Nokia device since the deal: the £600 Nokia 8 smartphone. It
received positive views from critics, who praised the Android-powered device as a “step in the right
direction”. But with Samsung and Apple so far ahead of the pack in terms of sales and market share, and
pretty much every handset player struggling to make money out of the smartphone market, does Nokia
even stand a chance?
“We’re ready to become one of the leading players,” replies a bullish Rantala. “Yes, there are certain
things we can and will leverage from Nokia’s history, but we’re not planning a nostalgia trip or a history
lesson this time around. We’re providing something entirely new.”

NOKIA AND XIOMI IN AN AGREEMENT

Nokia and Xiaomi announced that they have signed a business collaboration agreement and a multi-year
patent agreement, including a cross license to each company's cellular standard essential patents.
Xiaomi also acquired patent assets from Nokia as part of the transaction.

"Xiaomi is one of the world's leading smartphone manufacturers and we are delighted to have reached
an agreement with them," said Rajeev Suri, President & CEO of Nokia. "In addition to welcoming such a
prominent global technology company to our family of patent licensees, we look forward to working
together on a wide range of strategic projects."

Under the business cooperation agreement, Nokia will provide network infrastructure equipment
designed to deliver the high capacity, low power requirements expected by large web providers and
datacenter operators. Nokia and Xiaomi will work together on optical transport solutions for datacenter
interconnect, IP Routing based on Nokia's newly announced FP4 network processor, and a data center
fabric solution. In addition, the companies have agreed to explore opportunities for further cooperation,
in areas such as Internet of Things, augmented and virtual reality, and artificial intelligence.

With presence in over 30 countries and regions, Xiaomi is well known for its smartphones packed with
innovative technologies at disruptive prices. Beyond smartphones, Xiaomi is also a leading Internet of
Things player. The Mi Ecosystem IoT platform has crossed 60 million connected devices, and there are
now over 8 million daily active connected devices on the Mi Ecosystem platform.

"As a company seeking to deliver more exciting technological innovations to the world, we are excited at
the opportunity to work more closely with Nokia in future," said Lei Jun, chairman and CEO of Xiaomi.
"Xiaomi is committed to building sustainable, long-term partnerships with global technology leaders.
Our collaboration with Nokia will enable us to tap on its leadership in building large, high performance
networks and formidable strength in software and services, as we seek to create even more remarkable
products and services that deliver the best user experience to our Mi fans worldwide."

NOKIA IS OPERATING FOR 5G IN JAPAN

Citing it as a major milestone in bringing 5G to commercial reality in Japan, Nokia announced it

signed an agreement with NTT DoCoMo, Japan's largest mobile operator, to supply 5G baseband
products for a 5G mobile network destined to be commercially operating by 2020.

Nokia said it will support NTT DoCoMo’s commercial 5G operation in Japan by further
enhancing existing baseband units and integrating its 5G New Radio (5G NR)-based AirScale
hardware in the network, which will provide DoCoMo’s mobile customers with “a unique
experience fueled by 5G's extreme high speed, superior capacity and ultra-low latency.”

"The agreement with NTT DoCoMo is a major milestone in bringing 5G to commercial reality,
especially in a country with a long and proud history of technological achievements and early
technology adoption,” said Marc Rouanne, president of Mobile Networks at Nokia, in a press
release. “Together we have worked hard in recent months to commence preparations for NTT
DoCoMo's eventual launch of its operational 5G service by 2020, which we have now set in
motion by this very exciting announcement today."

The agreement builds on a long-term collaboration between the two companies, going back to at
least 3G. They’ve also worked closely on trials of 5G and agreed that Nokia would supply its 5G
baseband units (BBUs) to enable centralized management for 5G Remote Radio Heads (RRHs)
in preparation for 5G. That aligns with DoCoMo’s 5G road map, which is using existing C-RAN
architecture for 5G.

Japan traditionally has used Olympic events to showcase new technologies. Nearly three years
ago, Nokia and DoCoMo were demonstrating jointly developed technology at Mobile World
Congress 2015 that was designed to form the foundation of 5G networks the duo plan to
showcase at the 2020 Olympic Games in Tokyo.

"We have been collaborating with partners such as Nokia on various 5G technology and use case
trials since 2014,” said Hiroshi Nakamura, executive vice president and CTO at NTT DoCoMo,
in a statement. “With this agreement with Nokia, we are now proceeding to the next step to
launch 5G mobile services by 2020, and accelerate co-creation of new services and businesses
with vertical industry partners."

To be clear, Nokia’s technology will be based on the new 3GPP-compliant 5G NR standard,

which was published near the end of 2017. Nokia is involved in more than 50 customer trials of
5G technology around the world ahead of expected commercial launches between 2019 and
2020.

Nokia says the deal with DoCoMo is significant because it’s a commercial agreement for 5G
radio hardware—not for testing or trial use—and Japan traditionally is one of the world’s leading
early adopters of new technologies.

NOW THEY ARE FOCUSING ON ANROID PHONES

NOKIA 2

NOKIA 5

NOKIA 8