Nokia 2012 Annual Report Download - page 110

Results by Segments
Devices & Services
The following table sets forth selective line items and the percentage of net sales that they represent
for Devices & Services for the fiscal years 2012 and 2011.
Year Ended
December 31,
2012
Percentage of
Net Sales
Year Ended
December 31,
2011
Percentage of
Net Sales
Percentage
Increase/
(Decrease)
(EUR millions, except percentage data)
Net sales(1) ................... 15686 100.0% 23 943 100.0% (34)%
Cost of sales ................. (12340) (78.7)% (17 303) (72.3)% (29)%
Gross profit ................... 3346 21.3% 6 640 27.7% (50)%
Research and development
expenses .................. (1852) (11.8)% (2 441) (10.2)% (24)%
Selling and marketing
expenses .................. (1857) (11.8)% (2 180) (9.1)% (15)%
Administrative and general
expenses .................. (292) (1.9)% (362) (1.5)% (19)%
Other operating income and
expenses .................. (445) (2.8)% (773) (3.2)% (42)%
Operating profit ............... (1100) (7.0)% 884 3.7%
(1) Includes IPR income recognized in Devices & Services Other net sales.
Net Sales
The following table sets forth our Devices & Services net sales and year-on-year growth rate by
geographic area for the fiscal years 2012 and 2011. The IPR income referred to in the paragraph
below has been allocated to the geographic area contained in this chart.
Year Ended
December 31,
2012
Change
2011 to 2012
Year Ended
December 31,
2011
(EUR millions, except percentage data)
Europe ........................... 4643 (34)% 7 064
Middle East & Africa ................ 2827 (31)% 4 098
Greater China ...................... 1610 (68)% 5 063
Asia-Pacific ........................ 3811 (22)% 4 896
North America ..................... 453 28% 354
Latin America ...................... 2342 (5)% 2 468
Total ............................. 15686 (34)% 23 943
The 34% year-on-year decline in Devices & Services net sales in 2012 resulted from lower volumes in
both Smart Devices and Mobile Phones as well as a lower ASP in Mobile Phones, partially offset by a
higher ASP in Smart Devices. Devices & Services Other net sales decreased in 2012 due to lower
non-recurring IPR income, the divestment of Vertu during the fourth quarter 2012 and lower spare
parts sales.
Smart Devices continued to transition as Symbian volumes decreased sequentially every quarter in
2012. Lumia device volumes grew in the first half of 2012 by expanding geographical distribution as
well as new product launches, but were negatively affected in the third quarter 2012 by product
transitions. In the fourth quarter 2012, Smart Devices net sales grew sequentially as we started
shipping new Lumia devices, although volumes were adversely affected by supply constraints as we
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