Telecom Lead Europe: Nokia is planning to invest in
location-based platform.
Its investments in location-based platform are expected
to assist the ailing mobile phone major to differentiate its portfolio of Lumia
smartphones with location-based services including navigation and visual search
applications such as the recently announced Nokia City Lens.
Nokia will also extend its mapping technology to multiple
industries to strengthen the platform and generate new revenue.
The Finnish company will further develop its Series 40
and Series 30 devices, and invest in key feature phone technologies like the
Nokia Browser, aiming to be the world’s most data efficient mobile browser.
Nokia expects further charges of approximately EUR 1.0
billion relating to restructuring activities in Devices & Services by the
end of 2013 in connection with its updated Devices & Services operating
expense target.
This is in addition to cumulative charges of
approximately EUR 900 million recognized as of the end of first quarter 2012 in
connection with previously announced restructuring activities. By the end of
the first quarter 2012, Nokia had cumulative restructuring related cash
outflows of approximately EUR 450 million.
From the second quarter 2012 onwards, Nokia expects restructuring
related cash outflows to be approximately EUR 650 million in 2012 and
approximately EUR 600 million in 2013. Out of the total expected charges
relating to restructuring activities of EUR 1.9 billion, Nokia expects non-cash
charges to be approximately EUR 200 million.
These cost reduction measures are designed to return
Nokia’s Devices & Services business to sustainable non-IFRS operating
profitability as soon as possible.
Nokia expects competitive industry dynamics to continue
to negatively impact Devices & Services in the third quarter 2012. Nokia
now expects its non-IFRS Devices & Services operating margin in the second
quarter 2012 to be below the first quarter 2012 level of negative 3.0 percent.
This compares to the previous outlook of similar to or below the first quarter
level of negative 3.0 percent.
“Nokia is significantly increasing its cost
reduction target for Devices & Services in support of the streamlined
strategy announced today,” said Timo Ihamuotila, executive vice president
and CFO.
“With these planned actions, we believe our Devices
& Services business has a clear path to profitability. Nokia intends to
maintain its strong financial position while proceeding aggressively with
actions aimed at creating shareholder value,” Ihamuotila added.
