Nokia 2005 Annual Report Download - page 31

In 2005, Mobile Phones introduced its first 3G/WCDMA products: the Nokia 6280, the Nokia 6233,
the Nokia 6234 (exclusively for operator Vodafone), and the Nokia 6282 (for the Americas).
The Mobile Phones business group has five units: Broad Appeal; Entry; Lifestyle Products; CDMA;
and Vertu.
The Broad Appeal unit focuses on mid-range products where the balance between price,
functionality and style is key. The vast majority of Nokia’s product portfolio falls into this category.
Product highlights for 2005 include the Nokia 3250, a music-optimized device supporting 1GB of
memory; the Nokia 6280, a 3G/WCDMA phone with a 2-megapixel camera; and the Nokia 6230i,
Nokia’s highest revenue generating phone in 2005.
The Entry unit addresses markets where we believe there is potential for growth and where
mobile penetration levels are relatively low. Our aim is to provide affordable mobile phones while
cooperating with local mobile operators to reduce the total cost of ownership. Current products
include the Nokia 2600 monoblock and the Nokia 2652 clamshell, both with color-screens, and the
Nokia 1100, Nokia’s best-selling phone in volume terms in 2005. During the year we introduced
the Nokia 1110 and the Nokia 1600, both of which were designed specifically for new growth
markets.
Towards the beginning of 2006, we changed the name of our Focused Appeal unit to Lifestyle
Products. This unit concentrates on top-end products for consumers who will pay a premium for
higher-quality materials, design and features. Products launched by this unit tend to command
higher prices. In 2005, the unit introduced the Nokia 8800 phone, featuring a sliding stainless steel
case; the ‘‘L’Amour’’ collection of fashion-inspired mobile phones, which come in three different
form factors and two distinct color schemes; and the Nokia 5140i outdoor mobile phone featuring
thermometer, compass and flashlight.
The CDMA unit supports operators that use CDMA technology. In 2005, CDMA industry device
volumes represented approximately 17% of total industry device volumes. CDMA operators are
mainly in the United States, China, India, Indonesia, Australia, Brazil and some other Latin
American markets. In 2005, we continued to expand our CDMA portfolio. Products introduced
include the Nokia 6265 slide design phone with a 2-megapixel camera and Bluetooth connectivity,
and the Nokia 6155, a CDMA mid-range phone for the Americas. On February 14, 2006, Nokia and
SANYO Electric Co., Ltd announced a preliminary agreement with intent to form a new global
company comprised of their respective CDMA mobile phone businesses—separate from the parent
companies. The relevant assets from both companies will be contributed or made available for the
new entity. Final agreements are expected to be signed in the second quarter of 2006, with the
new business expected to commence operations in the third quarter of 2006, provided that the
due diligence has been completed and all necessary regulatory approvals obtained. For more
information on this preliminary agreement, see ‘‘Item 5.A Operating Results—Overview—
Subsequent Events—Preliminary Agreement with SANYO.’’
Vertu, our unit for luxury communications products, continues to make progress towards
establishing a luxury mobile phone category. Recent launches include the Signature Diamond
Collection of tri-band GSM phones, including a model inlaid with 700 diamonds. Also launched
recently were the Ascent White Special Edition and Motorsport Limited Edition phones, both of
which are handcrafted from leather and stainless steel with a custom-developed, scratch-resistant
alloy, and include tri-band GSM and Bluetooth connectivity.
Multimedia
Multimedia brings mobile multimedia experiences to consumers in the form of advanced mobile
devices and applications with connectivity over GSM, 3G/WCDMA, WLAN, Bluetooth and other
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