Sets operating margins for Nokia-Siemens Networks
Nokia President and CEO Olli-Pekka Kallasvuo has said that he expects Nokia’s overall operating margin to take a hit as its networks arm start trading as Nokia Siemens Networks.
Nokia has a set an operating margin over the next two years of 15%, down from the 17% the company set for itself a year ago. It says the decrease is due to the impact of commencement of trading as the combined Networks unit, and has set the networks unit a target of 10% operating margin by the end of 2007.
Margin growth won’t be accompanied by increased sales, however, as the company expects network infrastructure sales only to be flat.
However, Kallasvuo said that he now expects overall industry device volumes to grow 10% in 2007, with the volume in emerging markets and Europe achieving less than 10%.
There will be some value growth, but with growth coming from emerging markets, there will be a slight hit on average sales prices, the company said.
However, such is the rate of growth, Nokia now thinks the industry will hook up its 3 billionth mobile subscriber in 2007, not in 2008 as it previously thought.
Kallasvuo added that the company has reorganised its design and marketing teams to exploit this rising market, especially in the area of mobile internet.
“With an estimated 850 million Nokia device users out there, we are positioned to connect more people to the internet than any other company in the world. We are actively aligning our strategy in pursuit of this major business opportunity,” he said.