Nokia 2012 Annual Report Download - page 50

Organizational Structure and Reportable Segments
We have three businesses: Devices & Services, HERE (formerly Location & Commerce) and Nokia
Siemens Networks, and four operating and reportable segments for financial reporting purposes: Smart
Devices and Mobile Phones within our Devices & Services business; HERE; and Nokia Siemens
Networks.
• Smart Devices focuses on our most advanced products, including Lumia smartphones
powered by the Windows Phone operating system.
• Mobile Phones focuses on our most affordable products, including Asha full touch
smartphones powered by the Series 40 operating system.
• HERE develops location-based products and services for a broad range of devices and
operating systems, including our Lumia smartphones. As of January 1, 2013, HERE is the
new name of our former Location & Commerce business and reportable segment.
• Nokia Siemens Networks, jointly owned by Nokia and Siemens and consolidated by Nokia, is
a leading global provider of telecommunications infrastructure, with a focus on the mobile
broadband market.
Each reportable segment has profit-and-loss responsibility and end-to-end accountability for the full
consumer experience, including product development, product management and product marketing.
All of our businesses have recently undertaken major strategic and operational changes with the aim of
delivering long-term sustainable growth. These changes have included our announcement in early
2011 of a new strategy for our Devices & Services business, including our partnership with Microsoft to
build a new global mobile ecosystem with Windows Phone serving as our primary smartphone platform
and changes to our leadership team and operational structure, with the aim of accelerating speed of
execution in the intensely competitive mobile products market. In June 2012, we announced a range of
additional planned measures aimed at sharpening our strategy, improving our operating model and
returning the company to profitable growth. These actions included targeted investments in our Smart
Devices and HERE business, and streamlining, reducing and divesting certain operations, as well as
headcount reductions, in our Devices & Services business. Since late November 2011, Nokia Siemens
Networks has also been implementing a new strategy and restructuring plan to focus on mobile
broadband and services.
During 2012, we also manufactured and sold luxury mobile devices under the Vertu brand. We sold
most of our shareholding in Vertu, which has more than 450 points of sale globally, to a private equity
group in October 2012. We have reported the operating results of Vertu under Devices & Services
Other.
For a breakdown of our net sales and other operating results by category of activity and geographical
location in 2011, see Item 5 and Note 2 to our consolidated financial statements included in Item 18 of
this annual report.
Other
We primarily invest in research and development, sales and marketing and building the Nokia brand.
During 2013, we currently expect the amount of capital expenditure, excluding acquisitions, to be
approximately EUR 350 million, and to be funded from our cash flow from operations. During 2012, our
capital expenditures, excluding acquisitions, totaled EUR 461 million, compared with EUR 597 million
in 2011. For further information regarding capital expenditures, see Item 5A. “Operating Results”, and
for a description of capital expenditures by our reportable segments, see Note 2 to our consolidated
financial statements included in Item 18 of this annual report.
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