Nokia 2014 Annual Report Download - page 40

38 NOKIA IN 2014
Devices & Services
business sold to Microsoft
Segment overview
With the closing of the Sale of the D&S
Business, Nokia exited the business of
selling mobile devices. Prior to the Sale,
Nokia created products for virtually every
demographic, with sales in more than 160
countries. The Devices & Services business
was comprised of two business units: Mobile
Phones, which focused on the area of mass
market entry and feature phones as well as
aordable smartphones; and Smart Devices,
which focused on advanced products,
including smartphones powered by the
Windows Phone operating system.
Mobile Phones
The Mobile Phones unit developed ultra-low
cost phones, feature phones and aordable
smartphones, with most models running the
Nokia Asha software platform and the Series
30+ operating system. In early 2014, the
unit also introduced its rst aordable
smartphones based on the Nokia X software
platform, which oers access to Android
applications. The major Mobile Phones
development sites were located in Beijing,
China and Oulu, Finland.
The strategy of the Mobile Phones unit
focused on leveraging the company’s
innovation and strength in growth markets to
provide people with an aordable internet
experience on their mobile device. The
most aordable products were targeted at
consumers for whom durability, good battery
life and price are most important. The Mobile
Phones business unit also produced a range
of aordable smartphones whose hardware,
software and services are optimized for—and
not compromised by—low price points.
As part of the Sale of the D&S Business,
Microsoft has licensed, for a limited time,
the Nokia brand for use with certain
products from the Mobile Phones unit
as well as acquired the Asha brand under
which Nokia marketed some of its Mobile
Phones products.
Smart Devices
The Smart Devices unit, which was acquired
by Microsoft in its entirety, focused on
developing smartphones based on Microsoft’s
Windows Phone operating system.
Nokia brought its rst Windows Phone
products—under the Lumia brand—to market
in 2011, several months after entering into
a strategic partnership with Microsoft. We
then expanded the depth and breadth of
the Lumia range, contributing to Windows
Phone becoming the third-largest ecosystem
globally in 2013. As part of the Sale of the
D&S Business, Microsoft acquired the Lumia
brand under which Microsoft has continued
to introduce new smartphone models,
following the completion of the transaction.
Sales and marketing
We derived our net sales of mobile devices
primarily from sales to mobile network
operators and distributors, and to a lesser
extent independent retailers, corporate
customers and consumers. The marketing
eorts were aimed at creating consumer
loyalty, enhancing the Nokia brand and
increasing sales. In the marketing of mobile
devices, we focused on expanding awareness
of the key points of dierentiation in our
products and services, such as the imaging
capabilities of our high-end smartphones
or the robust quality and long battery life
of our most aordable feature phones.
We also engaged consumers through
our own social media channels,
including Nokia Conversations.
Discontinued operations