Nokia 2012 Annual Report Download - page 122

During the second quarter of 2011, Devices & Services net sales were negatively affected by
unexpected sales and inventory patterns, resulting in distributors and operators purchasing fewer of
our devices across our portfolio as they reduced their inventories of Nokia devices. Devices & Services
net sales were also affected during the second quarter of 2011 by a negative mix shift towards devices
with lower average selling prices and lower gross margins. Our actions enabled us to create healthier
sales channel dynamics during the latter weeks of the second quarter 2011. Devices & Services net
sales increased sequentially in the fourth quarter 2011, supported by broader product renewal in both
Mobile Phones, for example dual SIM devices, and Smart Devices as well as overall industry
seasonality.
Our overall Devices & Services net sales in 2011 benefited from the recognition in Devices & Services
Other of approximately EUR 450 million (approximately EUR 70 million in 2010) of non-recurring IPR
income, as well as strong growth in the underlying recurring IPR income. We believe these
developments underline Nokia’s industry leading patent portfolio. During the last two decades, we have
invested more than EUR 45 billion in research and development and built one of the wireless industry’s
strongest and broadest IPR portfolios, with over 10 000 patent families. Nokia is a world leader in the
development of mobile device and mobile communications technologies, which is also demonstrated
by our strong patent position.
Volume
The following chart sets out the mobile device volumes for our Devices & Services business and year-
on-year growth rates by geographic area for the fiscal years 2011 and 2010.
Year Ended
December 31,
2011
Change
2010 to 2011
Year Ended
December 31,
2010
(Units in millions, except percentage data)
Europe .......................... 87.8 (22)% 112.7
Middle East & Africa ............... 94.6 13% 83.8
Greater China .................... 65.8 (20)% 82.5
Asia-Pacific ...................... 118.9 0% 119.1
North America .................... 3.9 (65)% 11.1
Latin America ..................... 46.1 5% 43.7
Total ............................ 417.1 (8)% 452.9
On a year-on-year basis, the decline in our total Devices & Services volumes in 2011 was driven by
lower volumes in both Smart Devices and Mobile Phones discussed below.
Average Selling Price
See “ Item 5A. Operating Results” or the glossary of this annual report for information on the
calculation of our average selling prices.
Our total mobile device ASP, including IPR income, in 2011 was EUR 57, down 11% from EUR 64 in
2010. The decrease in our mobile device ASP in 2011 was driven primarily by the increase in the
proportion of Mobile Phone sales partially offset by the positive effect of higher IPR income and the
lower deferral of revenue related to services sold in combination with our devices. On a year-on-year
basis, the impact from the appreciation of the euro against certain currencies had a slightly negative
impact, almost entirely offset by the positive impact from foreign currency hedging. Our total mobile
device ASP, excluding IPR income, in 2011 was EUR 55, down 14% from EUR 64 in 2010.
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