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Nokia Q4 2011 net sales EUR 10.0 billion, non-IFRS EPS EUR 0.06 (reported EPS EUR -0.29) Nokia 2011 net sales EUR 38.7 billion, non-IFRS EPS EUR 0.29 (reported EPS EUR -0.31)

(January 26, 2012)

ESPOO, FINLAND -- (Marketwire) -- 01/26/12 --


- Accelerating investment in Lumia range of smartphones, having sold well over 1 million Lumia devices to date - Solid Q4 performance in mobile phones - Strong balance sheet, with net cash and other liquid assets of EUR 5.6 billion at end of Q4 2011 - Nokia Board of Directors will propose a dividend of EUR 0.20 per share for 2011 (EUR 0.40 per share for 2010)


Nokia Corporation

Interim report

January 26, 2012 at 13.00 (CET+1)

This is a summary of the fourth quarter and annual results 2011 interim report published today. The complete fourth quarter and annual results 2011 interim report with tables is available at http://www.results.nokia.com/results/Nokia_results2011Q4e.pdf. Investors should not rely on summaries of our interim reports only, but should review the complete interim reports with tables.



+------------+-------------------------------------++---------------------+ | | Reported and Non-IFRS ||Reported and Non-IFRS| | | fourth quarter 2011 results1 || full year 2011 | | | || results1 | | +-------+-------+------+-------+------++-------+------+------+ |EUR million |Q4/2011|Q4/2010| YoY|Q3/2011| QoQ|| 2011| 2010| YoY| | | | |Change| |Change|| | |Change| +------------+-------+-------+------+-------+------++-------+------+------+ |Nokia | | | | | || | | | | | | | | | || | | | |Net sales | 10 005| 12 651| -21%| 8 980| 11%|| 38 659|42 446| -9%| | | | | | | || | | | |Operating | | | | | || | | | | profit | -954| 884| | -71| || -1 073| 2 070| | | | | | | | || | | | |Operating | | | | | || | | | | profit | | | | | || | | | | (non-IFRS) | 478| 1090| -56%| 252| 90%|| 1 825| 3 204| -43%| | | | | | | || | | | |EPS, EUR | | | | | || | | | | diluted | -0.29| 0.20| | -0.02| || -0.31| 0.50| | | | | | | | || | | | |EPS, EUR | | | | | || | | | | diluted | | | | | || | | | | (non-IFRS)2| 0.06| 0.22| -73%| 0.03| 100%|| 0.29| 0.61| -52%| | | | | | | || | | | |Net cash | | | | | || | | | | from | | | | | || | | | | operating | | | | | || | | | | activities | 644| 2436| -74%| 852| -25%|| 1 137| 4 774| -76%| | | | | | | || | | | |Net cash and| | | | | || | | | |other liquid| | | | | || | | | |assets3 | 5 581| 6 996| -20%| 5 067| 10%|| 5 581| 6 996| -20%| +------------+-------+-------+------+-------+------++-------+------+------+ |Devices & | | | | | || | | | |Services4 | | | | | || | | | | | | | | | || | | | |Net sales | 5 997| 8 499| -29%| 5 392| 11%|| 23 943|29 134| -18%| | | | | | | || | | | |Smart | | | | | || | | | | Devices net| | | | | || | | | | sales | 2 747| 4 396| -38%| 2 194| 25%|| 10 820|14 874| -27%| | | | | | | || | | | |Mobile | | | | | || | | | | Phones net| | | | | || | | | | sales | 3 040| 3 948| -23%| 2 915| 4%|| 11 930|13 696| -13%| | | | | | | || | | | |Mobile | | | | | || | | | | device | | | | | || | | | | volume | | | | | || | | | | (nm units) | 113.5| 123.7| -8%| 106.6| 6%|| 417.1| 452.9| -8%| | | | | | | || | | | |Smart | | | | | || | | | | Devices | | | | | || | | | | volume | | | | | || | | | | (mn units) | 19.6| 28.6| -31%| 16.8| 17%|| 77.3| 103.6| -25%| | | | | | | || | | | |Mobile | | | | | || | | | | Phones | | | | | || | | | | volume | | | | | || | | | | (mn units) | 93.9| 95.0| -1%| 89.8| 5%|| 339.8| 349.2| -3%| | | | | | | || | | | |Mobile | | | | | || | | | | device | | | | | || | | | | ASP5 | 53| 69| -23%| 51| 4%|| 57| 64| -11%| | | | | | | || | | | |Smart | | | | | || | | | | Devices | | | | | || | | | | ASP5 | 140| 154| -9%| 131| 7%|| 140| 144| -3%| | | | | | | || | | | |Mobile | | | | | || | | | | Phones | | | | | || | | | | ASP5 | 32| 42| -24%| 32| 0%|| 35| 39| -10%| | | | | | | || | | | |Operating | | | | | || | | | |profit | 203| 1 082| -81%| 168| 22%|| 884| 3 540| -75%| | | | | | | || | | | |Operating | | | | | || | | | |profit | | | | | || | | | |(non-IFRS) | 292| 1 025| -72%| 258| 13%|| 1 683| 3 403| -51%| | | | | | | || | | | |Operating | | | | | || | | | |margin % | 3.4%| 12.7%| | 3.1%| || 3.7%| 12.2%| | | | | | | | || | | | |Operating | | | | | || | | | | margin % | | | | | || | | | | (non-IFRS) | 4.9%| 12.1%| | 4.8%| || 7.0%| 11.7%| | +------------+-------+-------+------+-------+------++-------+------+------+ |Location & | | | | | || | | | |Commerce6 | | | | | || | | | | | | | | | || | | | |Net sales | 306| 265| 15%| 282| 9%|| 1 091| 869| 25%| | | | | | | || | | | |Operating | | | | | || | | | | profit | -1 205| -148| | -85| || -1 526| -663| | | | | | | | || | | | |Operating | | | | | || | | | | profit | | | | | || | | | |(non-IFRS) | 29| -29| | 28| 4%|| 48| -173| -| | | | | | | || | | | |Operating | | | | | || | | | |margin % | 393.8%| -55.8%| | -30.1%| ||-139.9%|-76.3%| | | | | | | | || | | | |Operating | | | | | || | | | |margin % | | | | | || | | | |(non-IFRS) | 9.5%| -10.9%| | 9.9%| || 4.4%|-19.9%| | +------------+-------+-------+------+-------+------++-------+------+------+ |Nokia | | | | | || | | | | Siemens | | | | | || | | | | Networks7 | | | | | || | | | | | | | | | || | | | |Net sales | 3 815| 3 961| -4%| 3 413| 12%|| 14 041|12 661| 11%| | | | | | | || | | | |Operating | | | | | || | | | | profit | 67| 1| | -114| || -300| -686| | | | | | | | || | | | |Operating | | | | | || | | | | profit | | | | | || | | | |(non-IFRS) | 176| 145| 21%| 6| || 225| 95| 137%| | | | | | | || | | | |Operating | | | | | || | | | |margin % | 1.8%| 0.0%| | -3.3%| || -2.1%| -5.4%| | | | | | | | || | | | |Operating | | | | | || | | | |margin % | | | | | || | | | |(non-IFRS) | 4.6%| 3.7%| | 0.2%| || 1.6%| 0.8%| | +------------+-------+-------+------+-------+------++-------+------+------+


Note 1 relating to non-IFRS results:

Non-IFRS results exclude special items for all periods. In addition, non-IFRS results exclude intangible asset amortization, other purchase price accounting related items and inventory value adjustments arising from i) the formation of Nokia Siemens Networks and ii) all business acquisitions completed after June 30, 2008. More specific information about the exclusions from the non-IFRS results may be found in our complete interim report with tables for Q4 2011 on pages 4-5, 20-22 and 24, and pages 41-43 and 45 for the full years 2011 and 2010.

Nokia believes that these non-IFRS financial measures provide meaningful supplemental information to both management and investors regarding Nokia's performance by excluding the above-described items that may not be indicative of Nokia's business operating results. These non-IFRS financial measures should not be viewed in isolation or as substitutes to the equivalent IFRS measure(s), but should be used in conjunction with the most directly comparable IFRS measure(s) in the reported results. A reconciliation of the non-IFRS results to our reported results for Q4 2011 and Q4 2010 can be found in the tables on pages 18 and 20-24 of our complete interim report with tables. A reconciliation of our Q3 2011 non-IFRS results to our reported results can be found on pages 17 and 20-24 of our complete Q3 2011 interim report with tables which was published on October 20, 2011. A reconciliation of our 2011 and 2010 non-IFRS results to our reported results can be found on pages 40-45.

Note 2 relating to non-IFRS Nokia EPS:

Nokia taxes continued to be unfavorably impacted by Nokia Siemens Networks taxes as no tax benefits are recognized for certain Nokia Siemens Networks deferred tax items. In Q4 2011, the Finnish statutory tax rate change also had a one-quarter negative impact. If Nokia's estimated long-term tax rate of 26% had been applied, non-IFRS Nokia EPS would have been approximately 1.2 Euro cents higher in Q4 2011.

Note 3 relating to Nokia net cash and other liquid assets:

Calculated as total cash and other liquid assets less interest-bearing liabilities.

Note 4 relating to Devices & Services reporting structure:

As of April 1, 2011, our Devices & Services business has two operating and reportable segments - Smart Devices, which focuses on smartphones, and Mobile Phones, which focuses on mass market mobile devices - as well as Devices & Services Other. Prior period results for each quarter and the full year 2010 and Q1 2011 have been regrouped (on an unaudited basis) for comparability purposes according to the new reporting format that became effective on April 1, 2011.

Devices & Services prior period results for each quarter and the full year 2010 and Q1, Q2 and Q3 2011 have also been recasted (on an unaudited basis) for comparability purposes according to the new reporting format that became effective on October 1, 2011. See Note 6 below relating to Location & Commerce.

Note 5 relating to average selling prices (ASP):

Mobile device ASP represents total Devices & Services net sales (Smart Devices net sales, Mobile Phones net sales, and Devices & Services Other net sales) divided by total Devices & Services volumes. Devices & Services Other net sales includes net sales of Nokia's luxury phone business Vertu and spare parts, as well as intellectual property royalty income. Smart Devices ASP represents Smart Devices net sales divided by Smart Devices volumes. Mobile Phones ASP represents Mobile Phones net sales divided by Mobile Phones volumes.

Note 6 relating to Location & Commerce:

On June 22, 2011, we announced plans to create a new Location & Commerce business which combines NAVTEQ and Nokia's social location services operations from Devices & Services, which focuses on location based services and local commerce. The Location & Commerce business is an operating and reportable segment beginning October 1, 2011. From the third quarter 2008 until the end of the third quarter 2011, NAVTEQ was a separate reportable segment of Nokia. Prior period results for each quarter and the full year 2010 and Q1, Q2 and Q3 2011 have been recasted (on an unaudited basis) for comparability purposes according to the new reporting format that became effective on October 1, 2011. Recasted reported financial information can be accessed at: http://www.nokia.com/investors.

Note 7 relating to Nokia Siemens Networks:

Nokia Siemens Networks completed the acquisition of Motorola Solutions' networks assets on April 30, 2011. Accordingly, the fourth quarter and full year 2011 results of Nokia Siemens Networks are not directly comparable to their prior-year comparatives.


STEPHEN ELOP, NOKIA CEO:

The fourth quarter of 2011 marked a significant step in Nokia's transformation. Most notably, in Q4 we introduced new mobile phones and smartphones, which resulted from the strategy shift in our Devices & Services business.

Overall, we are pleased with the performance of our mobile phones business, which benefited in Q4 from sequential double-digit percentage growth in our dual SIM business, with particular strength in India, Middle East and Africa and South East Asia. In October, we introduced the Asha 200, 201, 300 and 303, which brought new mobile phones into 76 markets around the world. We are building on this foundation with R&D investments as we continue our journey to connect the next billion to the Internet.

Also in October, just six months after signing an agreement with Microsoft, we introduced our first two devices based on the Windows Phones platform - the Nokia Lumia 800 and the Nokia Lumia 710. We brought the new devices to market ahead of schedule, demonstrating that we are changing the clock speed of Nokia. To date, we have introduced Lumia to consumers in Europe, Hong Kong, India, Russia, Singapore, South Korea and Taiwan.

We have also started our important re-entry into the North American market. Earlier this month, T-Mobile started selling the Nokia Lumia 710 as a lead device. We also announced the new Nokia Lumia 900 with AT&T, and immediately received a number of industry awards. The Nokia Lumia 900 is our third Lumia device, our first LTE device designed specifically for the North American market, and AT&T is positioning the Lumia 900 as a lead LTE device.

In the war of ecosystems, clearly there are some strong contenders already on the field. And with Lumia, we have demonstrated that we belong on the field. Our specific intent has been to establish a beachhead in this war of ecosystems, and country by country that is what we are now accomplishing. To date we have sold well over 1 million Lumia devices. From this beachhead of more than 1 million Lumia devices, you will see us push forward with the sales, marketing and successive product introductions necessary to be successful. We also plan to bring the Lumia series to additional markets including China and Latin America in the first half of 2012.

And, while we progressed in the right direction in 2011, we still have a tremendous amount to accomplish in 2012, and thus, it is my assessment that we are in the heart of our transition.

Specifically, changing market conditions are putting increased pressure on Symbian. In certain markets, there has been an acceleration of the anticipated trend towards lower-priced smartphones with specifications that are different from Symbian's traditional strengths. As a result of the changing market conditions, combined with our increased focus on Lumia, we now believe that we will sell fewer Symbian devices than we previously anticipated.

During Q4, we also formed the Location & Commerce business to drive value from our leading mapping and location-based services platform. We conducted annual impairment testing in Q4 in the context of our new structure and plans for the future, and valued the Location & Commerce business at EUR 4.1 billion, resulting in an impairment of goodwill of EUR 1.1 billion. The Location & Commerce business is an important asset that is bringing differentiating location-based services to Nokia, the Windows Phone ecosystem, and other Microsoft products such as Bing. We believe this is the leading location- based services platform with an opportunity to become tremendously powerful as computing goes more mobile, and location increasingly becomes a critical organizing dimension for a person's experiences.

In summary, with a strong balance sheet, our performance in mobile phones and the new excitement around Lumia, we are confident that we are on the right track to build long-term value.


NOKIA OUTLOOK

- Nokia expects its non-IFRS Devices & Services operating margin in the first quarter 2012 to be around breakeven, ranging either above or below by approximately 2 percentage points. This outlook is based on our expectations regarding a number of factors, including:

- competitive industry dynamics, particularly impacting our Smart Devices business unit; - a greater-than-normal seasonal decline in Devices & Services net sales; - timing, ramp-up, and consumer demand related to our new products; - the macroeconomic environment.

- Nokia continues to target to reduce Devices & Services non-IFRS operating expenses by more than EUR 1 billion for the full year 2013, compared to the recasted full year 2010 Devices & Services non-IFRS operating expenses of EUR 5.35 billion.

- Nokia and Nokia Siemens Networks expect Nokia Siemens Networks non-IFRS operating margin to be negative in the earlier part of 2012. In the first quarter of 2012, Nokia Siemens Networks expects substantial charges related to its previously announced global restructuring program aimed at maintaining long-term competitiveness and improving profitability. Due to the nature of the restructuring program as well as prevailing uncertain macroeconomic conditions, the timing of improvements in profitability is uncertain and therefore Nokia Siemens Networks' non-IFRS operating margin in 2012 is expected to be volatile. Thus, Nokia and Nokia Siemens Networks do not believe it is appropriate to give specific full year or quarterly guidance for Nokia Siemens Networks during 2012.

- Nokia Siemens Networks continues to target to reduce its non-IFRS annualized operating expenses and production overheads by EUR 1 billion by the end of 2013, compared to the end of 2011.


LONGER TERM OUTLOOK AND TARGETS

Nokia believes it is currently not appropriate to provide annual targets for 2012 mainly for the following reasons: - 2012 is expected to continue to be a year of transition, during which our Devices & Services business will be subject to risks and uncertainties. Those risks and uncertainties include, among others, consumer demand for our Symbian devices; the timing, ramp-up, and consumer demand related to new products, including our Lumia devices; and further pressure on margins as competitors endeavor to capitalize on our platform and product transition;

- Nokia Siemens Networks has announced a new strategy which focuses its business on mobile broadband and services, and has launched an extensive global restructuring program.

- Additionally, the macroeconomic environment is making it increasingly difficult to estimate our outlook and provide reliable targets.

Longer-term, Nokia targets:

- Devices & Services net sales to grow faster than the market. - Devices & Services non-IFRS operating margin to be 10% or more.

Longer-term, Nokia and Nokia Siemens Networks target:

- Nokia Siemens Networks' non-IFRS operating margin to be between 5% and 10%.


FOURTH QUARTER 2011 FINANCIAL HIGHLIGHTS

The non-IFRS results exclude:

Q4 2011 - EUR 1 432 million (net) consisting of:

- EUR 1 090 million partial impairment of goodwill in Location & Commerce - EUR 25 million restructuring charge in Location & Commerce - EUR 119 million of intangible asset amortization and other purchase price accounting related items arising from the acquisition of NAVTEQ - EUR 100 million restructuring charge and EUR 36 million associated impairments in Devices & Services - EUR 2 million of intangible assets amortization and other purchase price related items arising from the acquisition of Novarra, MetaCarta and Motally in Devices & Services - EUR 86 million of intangible asset amortization and other purchase price accounting related items arising from the formation of Nokia Siemens Networks and the acquisition of Motorola Solutions' networks assets - EUR 23 million restructuring charge and other associated items in Nokia Siemens Networks - EUR 49 million benefit from a cartel claim settlement

Q4 2010 - EUR 206 million (net) consisting of:

- EUR 28 million restructuring charge and other associated items in Nokia Siemens Networks - EUR 85 million restructuring charges in Devices & Services - EUR 147 million gain on sale of wireless modem business in Devices & Services - EUR 116 million of intangible asset amortization and other purchase price accounting related items arising from the formation of Nokia Siemens Networks - EUR 119 million of intangible asset amortization and other purchase price accounting related items arising from the acquisition of NAVTEQ - EUR 5 million of intangible assets amortization and other purchase price related items arising from the acquisition of OZ Communications, Novarra and Motally in Devices & Services

Q4 2010 taxes - EUR 52 million non-cash tax benefit from reassessment of recoverability deferred tax assets in Nokia Siemens Networks

Q3 2011 - EUR 323 million (net) consisting of:

- EUR 26 million restructuring charge and other associated items in Nokia Siemens Networks - EUR 59 million restructuring charge and EUR 54 million associated impairments in Devices & Services - EUR 24 million positive Accenture deal closing adjustment in Devices & Services - EUR 94 million of intangible asset amortization and other purchase price accounting related items arising from the formation of Nokia Siemens Networks and the acquisition of Motorola Solutions' networks assets - EUR 113 million of intangible asset amortization and other purchase price accounting related items arising from the acquisition of NAVTEQ - EUR 1 million of intangible assets amortization and other purchase price related items arising from the acquisition of Novarra, MetaCarta and Motally in Devices & Services

Non-IFRS results exclude special items for all periods. In addition, non- IFRS results exclude intangible asset amortization, other purchase price accounting related items and inventory value adjustments arising from i) the formation of Nokia Siemens Networks and ii) all business acquisitions completed after June 30, 2008.


Nokia Group

Nokia has three businesses that reflect its new operational structure implemented during 2011 - Devices & Services, Location & Commerce and Nokia Siemens Networks. As of April 1, 2011, Devices & Services has two operating and reportable segments - Smart Devices, which focuses on smartphones, and Mobile Phones, which focuses on mass market mobile devices - as well as Devices & Services Other. As of October 1, 2011, a new operating and reportable segment, Location & Commerce, was formed by combining the NAVTEQ business with Nokia's social location services operations, which focuses on location based services and local commerce. From the third quarter of 2008 until the end of the third quarter of 2011, NAVTEQ was a separate reportable segment of Nokia.

Prior period results for each quarter and the full year 2010 and Q1, Q2 and Q3 2011 have been recasted (on an unaudited basis) for comparability purposes according to the new reporting format. Recasted reported financial information can be accessed at: http://www.nokia.com/investors

The following chart sets out the year-on-year and sequential growth rates in our net sales on a reported basis and at constant currency for the periods indicated.



+----------------------------------------------------------------+ | FOURTH QUARTER 2011 NET SALES, | | REPORTED & CONSTANT CURRENCY1 | +--------------------------------------+------------+------------+ | | YoY Change | QoQ Change | +--------------------------------------+------------+------------+ | Group net sales - reported | -21% | 11% | | | | | | Group net sales - constant currency1 | -19% | 11% | | | | | | Devices & Services | | | | net sales - reported | -29% | 11% | | | | | | Devices & Services | | | | net sales - constant currency1 | -26% | 12% | | | | | | Nokia Siemens Networks | | | | net sales - reported | -4% | 12% | | | | | | Nokia Siemens Networks | | | | net sales - constant currency1 | -5% | 10% | +--------------------------------------+------------+------------+ Note 1: Change in net sales at constant currency excludes the impact of Changes in exchange rates in comparison to the Euro, our reporting currency. The following chart sets out Nokia Group's cash flow for the periods indicated and financial position at the end of the periods indicated, as well as the year-on-year and sequential growth rates. +-------------------------------------------------------------------------+ | NOKIA GROUP CASH FLOW | | AND FINANCIAL POSITION | +-----------------+---------+---------+------------+---------+------------+ | EUR million | Q4/2011 | Q4/2010 | YoY Change | Q3/2011 | QoQ Change | +-----------------+---------+---------+------------+---------+------------+ | Net cash from | | | | | | | operating | | | | | | | activities | 634 | 2 436 | -74% | 852 | -26% | +-----------------+---------+---------+------------+---------+------------+ | Total cash and | | | | | | | other liquid | | | | | | | assets | 10 902 | 12 275 | -11% | 10 809 | 1% | +-----------------+---------+---------+------------+---------+------------+ | Net cash and | | | | | | | other liquid | | | | | | | assets1 | 5 581 | 6 996 | -20% | 5 067 | 10% | +-----------------+---------+---------+------------+---------+------------+ Note 1: Total cash and other liquid assets minus interest-bearing liabilities.



Year-on-year, net cash and other liquid assets decreased by EUR 1.4 billion primarily due to payment of the dividend, cash outflows related to the acquisition of Motorola Solutions' networks assets, and capital expenditures, partially offset by positive overall net cash from operating activities and a EUR 500 million equity investment in Nokia Siemens Networks by Siemens.

Sequentially, net cash and other liquid assets increased by EUR 514 million primarily due to underlying profitability, net working capital improvements in Nokia Siemens Networks, cash inflows related to IPR, positive foreign exchange impact on our cash balances, and the receipt of a platform support payment from Microsoft, partially offset by net cash outflows related to taxes, capital expenditures, and hedging activities.

Our broad strategic agreement with Microsoft includes platform support payments from Microsoft to us as well as software royalty payments from us to Microsoft. In the fourth quarter 2011, we received the first quarterly platform support payment of USD 250 million (EUR 180 million). We have a competitive software royalty structure, which includes minimum software royalty commitments. Over the life of the agreement, both the platform support payments and the minimum software royalty commitments are expected to measure in the billions of US Dollars.

Devices & Services

As of April 1, 2011, our Devices & Services business has two operating and reportable segments - Smart Devices, which focuses on smartphones, and Mobile Phones, which focuses on mass market mobile devices - as well as Devices & Services Other. Additionally, in 2011 we announced plans to create a new Location & Commerce business which combines NAVTEQ and Nokia's social location services operations from Devices & Services. The Location & Commerce business is an operating and reportable segment beginning October 1, 2011. Prior period results for each quarter and the full year 2010 and Q1, Q2 and Q3 2011 have been recasted (on an unaudited basis) for comparability purposes according to the new reporting format. Recasted reported financial information can be accessed at: http://www.nokia.com/investors

The following chart sets out a summary of the results for our Devices & Services business for the periods indicated, as well as the year-on-year and sequential growth rates.



+-------------------------------------------------------------------------+ | DEVICES & SERVICES | | RESULTS SUMMARY | +-------------------------+---------+---------+--------+---------+--------+ | | Q4/2011 | Q4/2010 | YoY | Q3/2011 | QoQ | | | | | Change | | Change | +-------------------------+---------+---------+--------+---------+--------+ | Net sales (EUR million)1| 5 997 | 8 499 | -29% | 5 392 | 11% | +-------------------------+---------+---------+--------+---------+--------+ | Mobile device volume | | | | | | | (million units) | 113.5 | 123.7 | -8% | 106.6 | 6% | +-------------------------+---------+---------+--------+---------+--------+ | Mobile device ASP (EUR) | 53 | 69 | -23% | 51 | 4% | +-------------------------+---------+---------+--------+---------+--------+ | Non-IFRS gross margin | | | | | | | (%) | 25.8% | 29.0% | | 25.7% | | +-------------------------+---------+---------+--------+---------+--------+ | Non-IFRS operating | | | | | | | expenses (EUR million) | 1 262 | 1 431 | -12% | 1 126 | 12% | +-------------------------+---------+---------+--------+---------+--------+ | Non-IFRS operating | | | | | | | margin (%) | 4.9% | 12.1% | | 4.8% | | +-------------------------+---------+---------+--------+---------+--------+ Note 1: Includes IPR royalty income recognized in Devices & Services Other net sales.



Net Sales

The year-on-year decline and sequential increase in our Devices & Services net sales are discussed below in our operating analysis of our Smart Devices and Mobile Phones business units. No non-recurring IPR royalty income was recognized in the fourth quarter 2011, compared with approximately EUR 70 million recognized in the third quarter 2011 and approximately EUR 30 million recognized in the fourth quarter 2010 in Devices & Services Other which benefited our overall Devices & Services results in those quarters. At constant currency, Devices & Services net sales would have decreased 26% year-on-year and increased 12% sequentially.

The following chart sets out the net sales for our Devices & Services business for the periods indicated, as well as the year-on-year and sequential growth rates, by geographic area. The IPR royalty income described in the paragraph above has been allocated to the geographic areas contained in this chart.



+----------------------------------------------------------------------+ | DEVICES & SERVICES NET SALES | | BY GEOGRAPHIC AREA | +----------------------+---------+---------+--------+---------+--------+ | EUR million | Q4/2011 | Q4/2010 | YoY | Q3/2011 | QoQ | | | | | Change | | Change | +----------------------+---------+---------+--------+---------+--------+ | Europe | 1 922 | 3 088 | -38% | 1 394 | 38% | | | | | | | | | Middle East & Africa | 1 065 | 1 177 | -10% | 957 | 11% | | | | | | | | | Greater China | 1 008 | 1 682 | -40% | 1 240 | -19% | | | | | | | | | Asia-Pacific | 1 297 | 1 603 | -19% | 1 197 | 8% | | | | | | | | | North America | 53 | 233 | -77% | 73 | -27% | | | | | | | | | Latin America | 652 | 715 | -9% | 531 | 23% | +----------------------+---------+---------+--------+---------+--------+ | Total | 5 997 | 8 499 | -29% | 5 392 | 11% | +----------------------+---------+---------+--------+---------+--------+



Volume

The following chart sets out the mobile device volumes for our Devices & Services business for the periods indicated, as well as the year-on-year and sequential growth rates, by geographic area.



+-------------------------------------------------------------------------+ | DEVICES & SERVICES MOBILE DEVICE | | VOLUMES BY GEOGRAPHIC AREA | +-----------------+---------+---------+------------+---------+------------+ | million units | Q4/2011 | Q4/2010 | YoY Change | Q3/2011 | QoQ Change | +-----------------+---------+---------+------------+---------+------------+ | Europe | 25.3 | 33.5 | -24% | 20.7 | 22% | | | | | | | | | Middle East & | | | | | | | Africa | 25.9 | 22.2 | 17% | 26.0 | 0% | | | | | | | | | Greater China | 14.7 | 21.9 | -33% | 15.9 | -8% | | | | | | | | | Asia-Pacific | 34.7 | 31.3 | 11% | 32.4 | 7% | | | | | | | | | North America | 0.5 | 2.6 | -81% | 0.7 | -29% | | | | | | | | | Latin America | 12.4 | 12.2 | 2% | 10.9 | 14% | +-----------------+---------+---------+------------+---------+------------+ | Total | 113.5 | 123.7 | -8% | 106.6 | 6% | +-----------------+---------+---------+------------+---------+------------+



On a year-on-year basis, the decline in our total Devices & Services volumes in the fourth quarter 2011 was driven by significantly lower Smart Devices volumes. Mobile Phones volumes were approximately flat year-on-year.

The sequential increase in our total Devices & Services volumes in the fourth quarter 2011 was driven by higher Mobile Phones and Smart Device volumes supported by an increased seasonal demand for our devices.

During the fourth quarter 2011, our overall channel inventory increased on a sequential basis. We ended the fourth quarter 2011 with our sales channel inventories within our normal range of 4-6 weeks.

Average Selling Price

On a year-on-year basis, the overall decrease in our Devices & Services ASP in the fourth quarter 2011 was driven primarily by the lower ASP in Mobile Phones and, to a lesser extent, Smart Devices, a higher proportion of Mobile Phones sales, the negative impact from foreign currency hedging and the appreciation of the Euro against certain currencies, partially offset by a positive impact from lower deferral of revenue related to services sold in combination with our devices.

On a sequential basis, the overall increase in our Devices & Services ASP in the fourth quarter 2011 was driven primarily by a product mix shift towards Smart Devices, the depreciation of the Euro against certain currencies and a lower deferral of revenue related to services sold in combination with our devices, partially offset by a negative impact from foreign currency hedging, pricing pressure and lower IPR royalty income as the third quarter 2011 ASP benefited from the recognition of non-recurring IPR royalty income discussed above.

Gross Margin

On a year-on-year basis, the decline in our Devices & Services non-IFRS gross margin in the fourth quarter 2011 was driven by gross margin declines in both Smart Devices and Mobile Phones, partially offset by higher IPR royalty income.

On a sequential basis, the slight increase in our Devices & Services non- IFRS gross margin in the fourth quarter 2011 was driven primarily by gross margin improvements in Mobile Phones, almost entirely offset by the gross margin decline in Smart Devices and lower IPR royalty income.

Operating Expenses

Devices & Services non-IFRS research and development expenses decreased 16% year-on-year due to declines in Smart Devices and Devices & Services Other research and development expenses, partially offset by a year-on-year increase in Mobile Phones research and development expenses. The decreases in Smart Devices and Devices & Services Other research and development expenses were due primarily to a focus on priority projects and cost controls. The increase in Mobile Phones research and development expenses was primarily due to investments in product development to bring new innovations to the market in support of our strategy to bring internet to the next billion, partially offset by a focus on priority projects and cost controls.

On a sequential basis, Devices & Services non-IFRS research and development expenses increased by 12% primarily due to an increase in Mobile Phones research and development expenses as we invested to support our Internet for the next billion strategy.

Devices & Services non-IFRS sales and marketing expenses decreased 5% year- on- year, primarily due to lower sales, and increased 19% sequentially. The sequential increase was primarily driven by higher marketing expenses, particularly relating to our new smartphone launches in Smart Devices.

Devices & Services non-IFRS administrative and general expenses decreased 28% year-on-year and 22% sequentially. In the fourth quarter 2011, Devices & Services non-IFRS other income and expense had a slight positive year-on- year and sequential impact on profitability. Reported other income and expense was significantly adversely impacted in the fourth quarter 2011 primarily as a result of restructuring-related expenses discussed below, which were recognized in Devices & Services Other, partially offset by a benefit related to a cartel claim settlement.

Cost Reduction Activities and Planned Operational Adjustments

We are continuing to target to reduce our Devices & Services non-IFRS operating expenses by more than EUR 1 billion for the full year 2013, compared to the recasted full year 2010 Devices & Services non-IFRS operating expenses of EUR 5.35 billion. This reduction is expected to come from a variety of different sources and initiatives, including a planned reduction in the number of employees and normal personnel attrition, a reduction in the use of outsourced professionals, reductions in facility costs, and various improvements in efficiencies.

During the fourth quarter 2011, Devices & Services recognized net charges of EUR 136 million related to restructuring activities, which included restructuring charges and associated impairments. As of the end of the fourth quarter 2011, we had recognized cumulative charges of EUR 797 million related to restructuring activities in 2011. While the total extent of the restructuring activities is still to be determined, we currently anticipate cumulative charges in Devices & Services of around EUR 900 million before the end of 2012. We also believe total cash outflows related to our Devices & Services restructuring activities will be below the level of the cumulative charges related to these restructuring activities.


Smart Devices

The following chart sets out a summary of the results for our Smart Devices business unit for the periods indicated, as well as the year-on-year and sequential growth rates.



+-----------------------------------------------------------------------+ |SMART DEVICES | |RESULTS SUMMARY | +-------------------------+-------+-------+----------+-------+----------+ | |Q4/2011|Q4/2010|YoY Change|Q3/2011|QoQ Change| +-------------------------+-------+-------+----------+-------+----------+ |Net sales (EUR millions)1| 2 747| 4 396| -38%| 2 194| 25%| +-------------------------+-------+-------+----------+-------+----------+ |Smart Devices volume | | | | | | |(million units) | 19.6| 28.6| -31%| 16.8| 17%| +-------------------------+-------+-------+----------+-------+----------+ |Smart Devices ASP (EUR) | 140| 154| -9%| 131| 7%| +-------------------------+-------+-------+----------+-------+----------+ |Gross margin (%) | 19.9%| 28.7%| | 20.7%| | +-------------------------+-------+-------+----------+-------+----------+ |Operating expenses | | | | | | |(EUR millions) | 732| 899| -19%| 656| 12%| +-------------------------+-------+-------+----------+-------+----------+ |Contribution margin (%) | -7.0%| 11.6%| | -8.7%| | +-------------------------+-------+-------+----------+-------+----------+ Note 1: Does not include IPR royalty income. IPR royalty income is recognized in Devices & Services Other net sales.



Net Sales

The year-on-year decline in our Smart Devices net sales in the fourth quarter 2011 was primarily due to significantly lower volumes. On a sequential basis, the increase in our Smart Devices net sales in the fourth quarter 2011 was due to the higher volumes and ASP.

Volume

The year-on-year decline in our Smart Devices volumes in the fourth quarter 2011 continued to be driven by the strong momentum of competing smartphone platforms relative to our Symbian devices in all regions, particularly in Europe.

On a sequential basis, the increase in our Smart Devices volumes in the fourth quarter 2011 was primarily driven by the broader availability throughout the quarter of the Nokia N9 and the shipments during the quarter of the Nokia Lumia 800 and 710 in selected markets, as well as increased seasonal demand for our devices.

Average Selling Price

The year-on-year decline in our Smart Devices ASP in the fourth quarter 2011 was driven primarily by a higher proportion of sales of lower priced Symbian devices and price erosion due to the competitive environment, as well as the negative impact from foreign currency hedging. Our ASP in the fourth quarter 2011 benefited from the sales of the higher priced Nokia N9 and Nokia Lumia devices and a lower deferral of revenue related to services sold in combination with our devices.

Sequentially, the increase in our Smart Devices ASP in the fourth quarter 2011 was driven primarily by a positive mix shift towards our newer higher priced smartphones, the depreciation of the Euro against certain currencies and the lower deferral of revenue related to services sold in combination with our devices, partially offset by price erosion and the negative impact from foreign currency hedging.

Gross Margin

The year-on-year decline in our Smart Devices gross margin in the fourth quarter 2011 was driven primarily by greater price erosion than cost erosion due to the competitive environment and the Symbian related allowances discussed below, partially offset by the lower deferral of revenue related to services sold in combination with our devices and the positive impact from foreign currency hedging.

On a sequential basis, the decline in our Smart Devices gross margin in the fourth quarter 2011 was driven primarily by the Symbian related allowances discussed below, greater price erosion than cost erosion, and the negative impact from foreign currency hedging, which partially offset the positive impact from the lower deferral of revenue related to services sold in combination with our devices and lower fixed manufacturing costs.

Following the announcement of our strategic partnership with Microsoft in February 2011, our strategy included the expectation to sell approximately 150 million more Symbian devices in the years to come. However, changing market conditions are putting increased pressure on Symbian. In certain markets, there has been an acceleration of the anticipated trend towards lower-priced smartphones with specifications that are different from Symbian's traditional strengths, which has contributed to a faster decline of our Symbian volumes than we anticipated. We expect this trend to continue in 2012. To maximize the value of the Symbian asset going forward, we expect to continue shipping Symbian devices in specific regions and distribution channels, as well as to continue to provide software support to our Symbian customers through 2016. As a result of the changing market conditions, combined with our increased focus on Lumia, we now believe we will sell fewer Symbian devices than previously anticipated. Thus, in the fourth quarter 2011, we recognized allowances for excess component inventory and future purchase commitments related to Symbian.


Mobile Phones

The following chart sets out a summary of the results for our Mobile Phones business unit for the periods indicated, as well as the year-on-year and sequential growth rates.



+-------------------------------------------------------------------------+ |MOBILE PHONES | |RESULTS SUMMARY | +---------------------------+-------+-------+----------+-------+----------+ | |Q4/2011|Q4/2010|YoY Change|Q3/2011|QoQ Change| +---------------------------+-------+-------+----------+-------+----------+ |Net sales (EUR millions)1 | 3 040| 3 948| -23%| 2 915| 4%| +---------------------------+-------+-------+----------+-------+----------+ |Mobile Phones volume | | | | | | |(million units) | 93.9| 95.0| -1%| 89.8| 5%| +---------------------------+-------+-------+----------+-------+----------+ |Mobile Phones ASP (EUR) | 32| 42| -24%| 32| 0%| +---------------------------+-------+-------+----------+-------+----------+ |Gross margin (%) | 27.7%| 28.5%| | 23.6%| | +---------------------------+-------+-------+----------+-------+----------+ |Operating expenses | | | | | | |(EUR million) | 429| 410| 5%| 404| 6%| +---------------------------+-------+-------+----------+-------+----------+ |Contribution margin (%) | 13.5%| 18.1%| | 10.1%| | +---------------------------+-------+-------+----------+-------+----------+ Note 1: Does not include IPR royalty income. IPR royalty income is recognized in Devices & Services Other net sales.



Net Sales

On a year-on-year basis, our Mobile Phones net sales in the fourth quarter 2011 decreased due to the lower ASP. On a sequential basis, the increase in our Mobile Phones net sales in the fourth quarter 2011 was due to higher volumes.

Volume

Mobile Phones volumes in the fourth quarter 2011 were approximately flat year- on-year. This was primarily driven by our reduced portfolio of higher priced mobile phones compared to the fourth quarter 2010, almost entirely offset by a portfolio renewal, such as the broad availability of dual SIM devices, and higher volumes at lower price points in the fourth quarter 2011.

On a sequential basis, the increase in our Mobile Phones volumes in the fourth quarter 2011 was primarily driven by the broader availability of our dual SIM devices as well as the ongoing product renewal across the mobile phones portfolio, and to a lesser extent from higher seasonal demand for our mobile products.

Average Selling Price

The year-on-year decline in our Mobile Phones ASP in the fourth quarter 2011 was primarily driven by an increased proportion of sales of lower priced devices, the negative impact from foreign currency hedging and the appreciation of the Euro against certain currencies.

On a sequential basis, our Mobile Phones ASP was unchanged with relatively stable prices across the portfolio. The negative impact from foreign currency hedging in the fourth quarter 2011 was offset by the deprecation of the Euro compared to certain currencies and the lower deferral of revenue related to services sold in combination with our devices.

Gross Margin

The year-on-year decline in our Mobile Phones gross margin in the fourth quarter 2011 was primarily due to greater price erosion than cost erosion and the appreciation of the Euro against certain currencies partially offset by a positive mix shift towards higher margin mobile phones, the positive impact from foreign currency hedging, and the lower deferral of revenue related to services sold in combination with our devices.

The sequential increase in our Mobile Phones gross margin in the fourth quarter 2011 primarily reflected the positive impact from foreign currency hedging, greater cost erosion than price erosion, the lower deferral of revenue related to services sold in combination with our devices, lower warranty costs and more efficient utilization of manufacturing capacity, partially offset by the depreciation of the Euro against certain currencies.


Location & Commerce

On June 22, 2011, we announced plans to create a new Location & Commerce business which combines NAVTEQ and Nokia's social location services operations from Devices & Services. The Location & Commerce business is an operating and reportable segment beginning October 1, 2011. In addition to a broad portfolio of products and services for the wider internet ecosystem, the Location & Commerce business is creating integrated social location offerings in support of Nokia's strategic goal in smartphones, including the Nokia experience with Windows Phone, as well as support for bringing the internet to the next billion. From the third quarter 2008 until the end of the third quarter 2011, NAVTEQ was a separate reportable segment of Nokia. Prior period results for each quarter and the full year 2010 and Q1, Q2 and Q3 2011 have been recasted (on an unaudited basis) for comparability purposes according to the new reporting format that became effective on October 1, 2011. Recasted reported financial information can be accessed at: http://www.nokia.com/investors.

The following chart sets out a summary of the results for Location & Commerce for the periods indicated, as well as the year-on-year and sequential growth rates.



+-----------------------------------------------------------------------+ |LOCATION & COMMERCE | |RESULTS SUMMARY | +-------------------------+-------+-------+----------+-------+----------+ | |Q4/2011|Q4/2010|YoY Change|Q3/2011|QoQ Change| +-------------------------+-------+-------+----------+-------+----------+ |Net sales (EUR millions) | 306| 265| 15%| 282| 9%| +-------------------------+-------+-------+----------+-------+----------+ |Non-IFRS gross margin (%)| 77.8%| 82.6%| | 81.6%| | +-------------------------+-------+-------+----------+-------+----------+ |Non-IFRS operating | | | | | | |expenses (EUR millions) | 206| 246| -16%| 201| 2%| +-------------------------+-------+-------+----------+-------+----------+ |Non-IFRS operating | | | | | | |margin (%) | 9.5%| -10.9%| | 9.9%| | +-------------------------+-------+-------+----------+-------+----------+



Net Sales

The year-on-year increase in Location & Commerce net sales in the fourth quarter 2011 was primarily driven by higher recognition of deferred revenue related to sales of map platform licenses to Smart Devices and, to a lesser extent, by higher sales of map content licenses to vehicle customers due to higher consumer uptake of vehicle navigation systems, partially offset by lower sales to portable navigation devices (PND) customers.

Sequentially, the increase in Location & Commerce net sales in the fourth quarter 2011 was primarily due to seasonally strong sales of map content licenses in the vehicle segment due to higher consumer uptake of vehicle navigation systems and increased sales of updates.

Gross Margin

On a sequential basis, the decline in Location & Commerce non-IFRS gross margin in the fourth quarter 2011 was primarily due to an increased proportion of lower gross margin sales and a shift of research and development operating expenses to cost of sales as a result of the divestiture of the media advertising business.

On a year-on-year basis, the decline in Location & Commerce non-IFRS gross margin in the fourth quarter 2011 was primarily due to a shift of research and development operating expenses to cost of sales as a result of the divestiture of the media advertising business.

Operating Expenses

Location & Commerce non-IFRS research and development expenses decreased 16% year-on-year reflecting a shift in expenses from research and development to costs of sales related to the divestiture of the media advertising business. Location & Commerce non-IFRS research and development expenses increased 1% sequentially primarily driven by the timing of projects related to product development.

Location & Commerce non-IFRS sales and marketing expenses decreased 22% year-on- year primarily driven by lower spending on product marketing. Location & Commerce non-IFRS sales and marketing expenses increased 6% sequentially, primarily driven by seasonal increases in marketing expenses related to map update marketing campaigns.

Location & Commerce non-IFRS administrative and general expenses decreased 5% year-on-year primarily driven by a focus on cost controls. Location & Commerce non-IFRS administrative and general expenses increased 13 % sequentially primarily driven by increased depreciation related to the closure of offices.

In the fourth quarter 2011, we conducted our annual impairment testing to assess if events or changes in circumstances indicated that the carrying amount of our goodwill may not be recoverable. As a result, we recorded a charge to operating profit of EUR 1 090 million for the impairment of goodwill in our Location & Commerce business. The impairment charge is based on our estimate that the recoverable amount of Location & Commerce is EUR 4.1 billion. After the impairment charge, the carrying amount of goodwill for Location & Commerce is

EUR 3.3 billion. The impairment negatively impacted our reported EPS by EUR 0.29.

The impairment charge is the result of an evaluation of the projected financial performance of our Location & Commerce business. This takes into consideration the market dynamics in digital map data and related location-based content markets, including our estimate of the market moving long-term from fee- based towards advertising-based models especially in some more mature markets. It also reflects recently announced results and related competitive factors in the local search and advertising market resulting in lower estimated growth prospects from our location-based assets integrated with different advertising platforms. After consideration of all relevant factors, we reduced the net sales projections for Location & Commerce which, in turn, reduced projected profitability and cash flows.

The Location & Commerce business is an important asset that is bringing differentiating location-based services to Nokia, the Windows Phone ecosystem, and other Microsoft products such as Bing. We believe this is the leading location-based services platform with an opportunity to become tremendously powerful as computing goes more mobile.


Nokia Siemens Networks

Nokia Siemens Networks completed the acquisition of Motorola Solutions' networks assets on April 30, 2011. Accordingly, the results of Nokia Siemens Networks for the fourth quarter 2011 are not directly comparable to its results for the fourth quarter 2010.

The following chart sets out a summary of the results for Nokia Siemens Networks for the periods indicated, as well as the year-on-year and sequential growth rates.



+-------------------------------------------------------------------------+ | NOKIA SIEMENS NETWORKS | | RESULTS SUMMARY | +-----------------------+---------+---------+---------+---------+---------+ | | Q4/2011 | Q4/2010 | YoY | Q3/2011 | QoQ | | | | | Change | | Change | +-----------------------+---------+---------+---------+---------+---------+ | Net sales | | | | | | | (EUR million) | 3 815 | 3 961 | -4% | 3 413 | 12% | +--
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