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Nokia Reaffirms Its Commitment to China

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At a press conference in Beijing, Nokia marks 20 years in China and reaffirms its commitment to the world’s largest mobile phone market.

Since the outset, Nokia has grown its presence in China from an original staff of five in 1985 to more than 4,700 employees, working predominantly in global manufacturing and R&D.

As demonstration of Nokia’s localization strategy in China, the company has also worked to maximize growth and global competitiveness for all parties in the value chain, which has so far contributed to the creation of an estimated 25,000 jobs among the company’s cooperation partners and local sub- contractors and suppliers.

Jorma Ollila, Nokia Chairman and CEO said: “In 2004, Nokia not only retained, but clearly extended, its position as the number one player in the Chinese mobile device market. This is thanks to the strong Nokia brand here, our leading technology and quality products, as well as the recent hard work done in driving the efficiency and reach of our distribution system, particularly in more rural areas.

“It was also an excellent year for exports. We were again ranked the largest telecom exporter in China, a position held since 2000, with our export sales growing 56% year on year in 2004 to reach a record USD 3.3 billion*.”

Strategically, China is very important for Nokia. As the company’s second largest market, China 2004 net sales rose sharply to USD 3.6 billion, representing growth of 44% on the previous year. China also plays a major part in Nokia’s global manufacturing base as a logistics hub and in its global R&D network. During 2005, in meeting growing market demand, Nokia plans to add further capacity to its manufacturing facilities in China, as well as expand its activities in R&D.

Mobile subscriber growth in China is expected to almost double over the next five years, driven by a strong replacement market in urban areas and more and more users in rural China gaining access to mobile communications. Nokia estimates the total global mobile subscriber base, which hit 1.7 billion at the end of last year, to reach three billion by 2010. Of these new subscriptions, nearly one quarter are expected to be in China.

“This represents a tremendous opportunity for Nokia,” said Ollila. “Our aim is to maintain our leading position in China and to continue to grow as the most preferred partner within the Chinese mobile communications industry.

“We target strengthening our market share in China again this year, with growth largely on the strength of ongoing expansion into non-urban areas and our ability to keep coming up with the quality, tailored high-tech products that our Chinese customers want. The expected roll-out of 3G networks and related services also represent an opportunity to improve our position in the Chinese market. During the next three years, I would not be surprised to see China become Nokia’s largest market in net sales terms.”

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Nokia Reaffirms Its Commitment to China
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