Nokia 2006 Annual Report Download - page 36

Networks sales channels mainly comprise dedicated account management teams for operator
customers. The account management teams design solutions and suggest products based on
received and anticipated operator requirements. In addition to the sales and marketing done within
customer teams, Networks uses customer and industry events, exhibitions, and an established
interactive electronic channel to promote sales of its infrastructure and related services.
As we are a global company and have sales in most countries of the world, in 2006 we also had
sales to customers in Iran, Libya, Sudan and Syria. In 2006, we sold mobile devices and accessories
to customers in Iran, Libya, Sudan and Syria. In addition, we sold network equipment to a customer
in Iran. In 2004, we also signed a network sales contract with a customer in Libya, but that contract
had not resulted in any sales by the end of 2006. Our aggregate sales to customers in Iran, Libya,
Sudan and Syria in 2006 accounted for approximately 1% of our total revenue, or EUR 402 million.
Iran and, to a lesser extent Syria, are subject to US economic sanctions that are primarily designed
to implement US foreign policy. The US government has designated Iran, Syria and Sudan as ‘‘state
sponsors of terrorism.’’
Marketing
The Business Week and Interbrand annual rating of 2006 Best Global Brands positioned Nokia as the
sixth most valued brand in the world.
We continued to refresh our brand image in 2006 through a combination of efforts in design, a
broader product portfolio, and ongoing investment in marketing communication. We also continued
to build on our brand’s strategic direction, launching a series of marketing initiatives aimed at
solidifying the consumer experience:
)We introduced a renewed category model to drive product segmentation and encourage a
fundamental change in the way trade customers and consumers choose and buy our devices –
shifting from a product focus to an experience focus. We are now marketing our devices
around four different categories – Live, Connect, Achieve and Explore – with the aim of
addressing a specific set of customer needs and making it easier for consumers to choose a
device aligned with their lifestyle.
)We continued with our rollout of Nokia Flagship stores to improve the consumer retail
experience, opening stores in Chicago, Helsinki, Hong Kong, Mexico City and New York during
2006.
)We renewed the Nokia website to ensure that our online digital presence continues to
support our consumer relationship management strategy. Our website records millions of
visitors annually and we believe a worldclass online presence plays a key role in our
customer retention efforts.
Production
Nokia operated 15 manufacturing facilities in nine countries around the world as of December 31,
2006, for the production of mobile devices and network infrastructure. The Customer and Market
Operations horizontal group is responsible for the production of Nokia mobile devices, while the
Networks business group is responsible for the production of network infrastructure.
Our principal supply requirements are for electronic components, mechanical components and
software.
Mobile Devices
The Customer and Market Operations horizontal group is responsible for production and logistics for
the device businesses of Mobile Phones, Multimedia and Enterprise Solutions, including management
of the mobile device factories. The Customer and Market Operations horizontal group is also
responsible for process development in the demandsupply network, including Enterprise Solutions’
35