Nokia

Technology
Strategy

Tero Ojanperä
Chief Technology Officer

1 © 2006 Nokia Nokia Technology Strategy

In a world where everyone
can be connected…

…we take a very human approach

to technology

Technology is
a key business enabler
for us connecting people

2 © 2006 Nokia Nokia Technology Strategy

 Technology enables our growth

Cost
advantage
Mature Cost/
market volume/
Revenue- segments segmentation
generating
differentiation
Shaping the
future technology
and competitive
landscapes

New
Time to market/ market
Performance segments
3 © 2006 Nokia Nokia Technology Strategy
Technology contributes to our cost advantage
Normalized
operating
margin % • Platform approach,
30% reference architectures
• In-house chipset
development, incl.
20% IPR advantage
Nokia*
• Design for manufacturing
Samsung
10% Motorola
• Multi-sourcing
SEMC (interfaces)
LG

0%

Volume
(10)% market
0% 5% 10% 15% 20% 25% 30% 35% share %
Volume Market Share (%)
Industry cost curve – benefits of scale (market share %) to operating margin (%), 2005
Note: Industry cost curve derived from 2004-2005 reported quarterly results of top 6 manufacturers and Nokia estimates
* A large part of Nokia’s cost advantage stems from non-technical sources such as manufacturing, logistics, sales & marketing

4 © 2006 Nokia Nokia Technology Strategy

 Integrated approach continues to add value

Demand/ Customer
Supply interface Brand
chain
Product Selected
creation
investments
Make Broad
Technology ~15% involvement
development
and IPR Buy ~10% Specify
Value from
~75% mastering
the value chain,
architecture
Sourcing value and integration

5 5 © 2006
© 2006 Nokia
Nokia Nokia
Nokia Technology
Technology Strategy
Strategy /2006-05-05 / TO
We use a business driven, technology agnostic,
MOBILE TV
end-to-end approach EXAMPLE

Cellular solutions – Broadcast solutions –

on-demand TV via Live TV on DVB-H
streaming, download,
Media Charger, MBMS
End-to-end solutions
on many technologies
Internet TV – – decisions based on
Streaming, video clips, business case
VoD, video podcasts
over e.g., WLAN Devices –
Professional optimized for mobile
TV, enabling video synch
services –
from PC to mobile
Nokia integrated
end-to-end
Mobile TV solutions

6 © 2006 Nokia Nokia Technology Strategy

Nokia technology priorities

Embrace the Internet

Excel with software platforms

and applications

Win developers with consistent

architectures

Lead multi-radio productization

and evolution

7 © 2006 Nokia Nokia Technology Strategy

Nokia technology priorities

Embrace the Internet

Excel with software platforms

and applications

Win developers with consistent

architectures

Lead multi-radio productization

and evolution

8 © 2006 Nokia Nokia Technology Strategy

Embrace the Internet

Do everything on the mobile • Enablers for a truly mobile Internet

that you can do on the PC – and more • Unique Nokia Internet experiences

9 © 2006 Nokia Nokia Technology Strategy

… with the best
user experience

File sharing,
Peer2peer,
Web Server

10 © 2006 Nokia Nokia Technology Strategy

Nokia technology priorities

Embrace the Internet

Excel with software platforms

and applications

Win developers with consistent

architectures

Lead multi-radio productization

and evolution

11 © 2006 Nokia Nokia Technology Strategy

Excel with software platforms

Series 30 Series 40 S60 Series 80 Maemo

The lowest The best Extensibility, Enterprise- Open
cost voice & feature #1 in rich grade source
messaging phones with mobile solutions platform for
platform preferred UI devices web tablets

• 44 devices launched*
• 51% market share among converged devices**
Growth in Volume Growth in Enterprise Innovation
• Nokia
emerging alone cumulatively
growth shipped
richness 70 million
mobilityS60 devices***
potential
markets
• Smartphone market expected to exceed 250 M units 2008***

Source: *Nokia, September 2006, ** Canalys, July 2006, *** Nokia, Feb 2006
12 © 2006 Nokia Nokia Technology Strategy
Open Source makes sense

• Nokia 770 Internet Tablet based on desktop

computer Linux technologies. Developer tools at
www.maemo.org
• For use at home or WLAN hotspots
• Key applications browsing, email, VOIP*

• Nokia is actively using open source component

technologies and applications
• New S60 browser based on components from
KDE community
• Nokia further develops the S60 browser and
contributes changes back to KDE open source
community
• Nokia partners with the open source community
as it partners with others

13 © 2006 Nokia Nokia Technology Strategy

Nokia technology priorities

Embrace the Internet

Excel with software platforms

and applications

Win developers with consistent

architectures

Lead multi-radio productization

and evolution

14 © 2006 Nokia Nokia Technology Strategy

Win developers with consistent architectures

Series 40 S60 Series 80 Browser – standardized

access to rich interactive
Browser content & Internet

Native Flash – non-fragmented, easy-

Flash to-use tool for graphics,
code – most
powerful & animations and UI
optimized Java/CLDC Java/CDC
environ- Java – the most popular, all-
ment purpose environment, with
Nokia OS Symbian OS, C++ decreasing fragmentation

15 © 2006 Nokia Nokia Technology Strategy

… and best support and business opportunities

• Tools & SDKs

• Documentation & online support
Forum Nokia PRO • Access to prototypes & experts
The world’s most advanced
mobile development companies • Training
• Technical support & consultancy
• Application testing
• Go-to-market programs
Forum Nokia • Co-marketing
The world’s largest mobile
development community
(>2.5 million)

16 © 2006 Nokia Nokia Technology Strategy

Nokia technology priorities

Embrace the Internet

Excel with software platforms

and applications

Win developers with consistent

architectures

Lead multi-radio productization

and evolution

17 © 2006 Nokia Nokia Technology Strategy

Lead multi-radio productization
PA
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Cam
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PA RF
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PM Mem Digi PM
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Mem Card
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Mem Engine
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count < 1/2

Nokia 3G (WCDMA/EDGE) Competitor 3G (WCDMA/GPRS)

Slide Phone Engine Flip Phone Engine
18 © 2006 Nokia Nokia Technology Strategy
Lead multi-radio evolution while
simplifying convergence for the user

Cellular LTE/ Hot Spot

“Seamless, 3.9G I-HSPA “Highest
trustworthy, HSPA UMA WiMAX data speeds
global roaming" WCDMA WLAN over IP"
CDMA 1x GPRS
EV-DO /EDGE

Seamless connectivity
Complexity hidden
from user
FM Blue-
MBMS UWB
Broadcasting radio tooth
DVB-H RFID/NFC
Proximity
“CNN or “Local connectivity,
Sugar Bowl info, commerce &
on the road" services "

19 © 2006 Nokia Nokia Technology Strategy

Radio choices are defined by the operators’ current
network, spectrum assets and voice strategy

• HSPA available today to bring high-speed

data to 3G networks, with a clear
Nokia is committed to and
evolution
sees potential in both LTE
• Long Term Evolution (LTE) is the optimal and WiMAX
evolution path from GSM and
WCDMA/HSPA to future networks and
services
• WiMAX offers broadband wireless
opportunities for operators with no
WCDMA 3G license or spectrum

20 © 2006 Nokia Nokia Technology Strategy

 Nokia holds a strong IPR portfolio

WCDMA IPR portfolio*

Our IPR results in:
• A significant cost advantage
• Favorable licensing agreements
Others Nokia
Nokia supports the evolution of open
standards (e.g., 3GPP)
Nokia is actively developing LTE,
Motorola currently under feasibility study in 3GPP

Ericsson • Nokia believes that its leading

Qualcomm
contribution will turn into the industry’s
best IPR portfolio also in LTE

* WCDMA IPR judged essential (Goodman-Myers study, 2005)

21 © 2006 Nokia Nokia Technology Strategy

Nokia strategic technology priorities

• Embrace the Internet

• Excel with software platforms & applications
• Win developers with consistent architectures
• Lead multi-radio productization & evolution

22 © 2006 Nokia Nokia Technology Strategy