Nokia 2007 Annual Report Download - page 59

were up 26% in 2007 compared with 2006, reaching 437 million units. Based on our market
estimate, our volume market share grew to 38% in 2007, compared with 36% in 2006. In 2007, we
estimate that Nokia was the market leader in Europe, AsiaPacific and Latin America. We further
estimate that we were also the market leader in the fastest growing markets of the world, including
China, Middle East & Africa, South East AsiaPacific and India, as well as in WCDMA technology. In one
of the fastest growing segments of the market, converged devices (smartphones), our estimated
market share was approximately 50% in 2007. We continued to be the market share leader in the
fast growing entrylevel market, specifically the portion of that market for devices priced at under 50
euros. In 2007, we estimate this part of the market represented over 35% of the total industry
volumes and Nokia’s market share in this entrylevel segment was over 50%.
We believe that successfully competing in the mobile device industry is increasingly challenging, as
industry participants need to master many elements in order to win. The increasing industry
complexity and challenges of mastering the essential elements efficiently are driving a continuing
trend of consolidation, both in terms of share of industry volumes and profit. As a demonstration of
this consolidation, we estimate the market share of the top five competitors increased to 82% by the
end of 2007 from less than 70% in 2000. We also estimate that the share of operating profit of the
top five competitors in 2007 grew to 69% from 51% in 2006.
During 2007, we gained device market share in all regions except North America and Latin America,
where our market share declined. In Middle East & Africa, we had excellent market share gains in
2007. We continued to benefit in Middle East & Africa from our brand, broad product portfolio and
extensive distribution system.
Our significant market share gains in AsiaPacific were primarily driven by our strong position in the
fastest growing markets, such as India. In AsiaPacific, we continued to benefit from our brand, broad
product portfolio and extensive distribution system.
In Europe, our market share was up significantly in 2007, increasing in most European markets,
including France, Germany, Italy, Russia, Spain and the United Kingdom. In Europe, we benefited from
a strengthened and broad product portfolio.
In China, we gained market share in 2007 driven by our firmly established and extensive distribution
system, broad product portfolio, brand and strong market share in the entry level.
In Latin America, our 2007 market share was down slightly. Strong share gains in markets such as
Brazil were more than offset by a lower market share in Mexico. Our strengths in Latin America
continued to be our strong entrylevel product portfolio and improving midrange offering.
In North America, our market share declined in 2007. The lower market share in North America in
2007 was primarily driven by our much lower CDMA device volumes compared to 2006, as we
effectively ramped down our existing CDMA business during 2007.
Our device ASP in 2007 was EUR 86, declining 10% from EUR 96 in 2006. According to our estimates,
industry ASPs also declined in 2007. Our lower ASP in 2007 compared with 2006 was primarily the
result of a significantly higher proportion of entry level device sales where the industry growth has
been strong and where we have a leading share, and to a lesser extent by the negative effect of the
weaker US dollar on our net sales.
Ongoing factors affecting our performance in mobile devices
Our performance in the mobile device business is determined by our ability to satisfy the competitive
and complex requirements of the market and our current and potential customers. We will need to
continue to leverage and, in some cases, improve our competitive advantages of scale, brand,
manufacturing and logistics, technology, broad product portfolio, cost structure, quality and
intellectual property rights, or IPR. Our huge scale contributes to our low cost structure. As the
devices business is a consumer business, brand is a major differentiating factor, having broad effects
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