Displaying items by tag: Rajeev Suri
Nokia released its Q3 financial results for 2017 showing net sales of €5.5 billion for the quarter compared to €6 billion for the same period last year. The company reported a 7 percent year-on-year sales decrease in Q3. Nokia CEO Rajeev Suri said the company’s patent licensing business was the “clear highlight” of the quarter.
“We reached a favorable arbitration outcome with LG and have since reached an agreement with them on a license for a longer term than what was set out in the arbitration,” Suri said. “With this fast and effective execution against our patent licensing strategy, we have approximately doubled our recurring licensing revenue from €578 million in 2014.”
Suri said he was pleased that in 2017, the growth in patent licensing helped to offset the sales decline on the Networks side. “We have excellent momentum and considerable opportunity to further develop the business in 2018 and beyond,” he said.
The company saw strength in parts of its Networks business in Q3. On the sales side, Nokia saw constant currency year-on-year growth in Global Services and IP Routing as well as in its Middle East and Africa, and Asia-Pacific regions. Orders were up in many areas, according to Suri, including Applications & Analytics, which logged its fifth consecutive quarter of order growth in Q3, showing the progress being made to build a strong, stand-alone software business.
On the profitability side, the overall Networks gross margin of 38.6 percent was up compared to one year ago, a “remarkable achievement” Suri said, in the “context of a market that remains challenging”. In addition, Global Services and IP Networks and Applications delivered improvements for Nokia in operating margin compared to Q3 2016, at 8.1 percent and 10.7 percent, respectively.
Suri said the company continued to build momentum in its strategy to expand customer base beyond communication service providers. Across the adjacent segments that Nokia’s targeting, year-to-date orders were up by double-digit percentages and sales were up by 8 percent, excluding the former Alcatel-Lucent third-party integration business that the company is currently winding down.
“We also added more than 60 new customers in these adjacent segments so far this year, including China Pacific Insurance Company, the first large enterprise win for our Nuage business in China,” Suri said. “With cable operators, we won the first customer - WOW! in the United States - for our new products coming from the acquisition of Gainspeed, which we are also trialing with almost a dozen customers, including some of the industry's largest players.”
These results, he said, “reflect the power of our disciplined operating model and the advantages of our end-to-end portfolio.” In a market where competition remains robust, operational discipline is a must, he added, and it is a “core strength of Nokia.”
Furthermore, as the market transitions to 5G, Suri said he believes that the benefits of Nokia’s portfolio will become even more apparent given that 5G is about much more than Radio. It requires Cloud core, IP routing, transport of many kinds, fixed wireless access, Software-Defined Networking and more - and Nokia is one of the few companies that are able to meet all those needs.
Nokia experienced some challenges in its Mobile Networks business and saw a continued decline in its primary addressable market in 2018. That decline, which the company estimates to be in the range of 2 percent to 5 percent, is the result of the multiple technology transitions underway; robust competition in China; and near-term headwinds from potential operator consolidation in a handful of countries.
“In terms of the issues we are facing in Mobile Networks, I have noted in previous quarters that the R&D team in this business group has faced an extraordinarily high workload,” Suri said. “Given this situation, we have seen some issues with the time taken to merge some products that have, unfortunately, impacted a small number of customers. As a result, Mobile Networks has experienced both revenue pressure and an increase in expected network equipment swap costs.”
He said the company is “committed to getting these things back on track and we are already seeing meaningful improvements”. Field deployments of Nokia’s new AirScale products were ramping up in all the company’s geographies, including with key North American customers. These products help improve operator competitiveness, Suri said, not just by addressing cost challenges, but also by setting a new standard for performance and flexibility.
Suri also noted that despite some additional investment required in Mobile Networks to maintain product leadership, Nokia is committed to its €1.2 billion cost savings plan in full-year 2018. These savings come at a slightly higher cost than previously expected, and Nokia will continue to assess opportunities to deliver further savings in the area of cost-of-goods sold.
“Regarding our cash position, I am not satisfied with our performance in the third quarter and we are redoubling our efforts in this area. Maintaining our strong balance sheet is a clear priority,” said Suri. “In short, Q3 was a period in which we faced some challenges, but delivered good performance in many areas as well as momentum in the execution of our strategy.”
Finnish telecoms vendor Nokia recently reported its financial earnings for 2016 which showed a net loss of 766 million euros ($826 million). Nokia blames the sales and costs from acquiring and integrating Alcatel-Lucent for the “disappointing” loss in 2016. Nokia chief executive Rajeev Suri described 2016 as a “year of transition”.
Nokia’s financial results were “disappointing” according to Suri in a press statement, but he said the company is expected to perform better financially in 2017 “as market conditions improve.” The telecom giant has been going through a rapid process of transformation over the last few years as it acquired its rival Alcatel-Lucent. Nevertheless, Suri said: “We remain in a position of financial strength.”
Nokia once stood as the world’s leading mobile phone manufacturer between 1998 and 2011, but the company was soon overtaken by Apple and South Korean rival Samsung after failing to respond to the rise of smartphones. In 2013 Nokia bought 50 percent of network activities from Germany’s Siemens, and the following year divested from its mobile phone business.
In 2015, Nokia sold its mapping unit ‘Here’. Then in late 2016, Nokia completed the deal to buy Alcatel-Lucent, which had only recorded one year of annual profit since its inception in 2006. Now, Nokia is showing signs of a comeback in the mobile market.
Nokia said in May 2016 it would license its brand to a new Finnish company which will produce phones and tablets under the Nokia name. The new company, HMD Global, "has been founded to provide a focused, independent home for a full range of Nokia-branded feature phones, smartphones and tablets," Nokia said in a statement.
As part of the process, HMD Global and its Taiwanese partner, FIH Mobile of FoxConn Technology Group, will take over Microsoft's feature phone business for $350 million (310.5 million euros), Microsoft said separately. The U.S. company had bought the business from Nokia in 2014.
Nokia sold its unprofitable handset unit in 2014 for some $7.2 billion to Microsoft, which dropped the Nokia name from its Lumia smartphone handsets. Meanwhile, Nokia has concentrated on developing its mobile network equipment business by acquiring Alcatel-Lucent. With the new deal, Nokia eyes some new revenues from its still valuable consumer-brand, without having to bear the financial risks related to it.
Nokia recently teased that it will be making some kind of announcement on 26 February, and has sent out a save the date for a Mobile World Congress 2017 press conference where it’s expected to be releasing a new device.
A report has indicated that Nokia are formulating plans to re-enter the mainstream smartphone market after a lengthy absence. It is has been reported that Nokia have decided to make a comeback – and will launch its new smartphone product at the Mobile World Congress (MWC) event.
The Finnish telecommunications company sparked rumours when they posted a tweet which said that Nokia President and CEO Rajeev Suri would deliver the keynote address at the MWC which takes place in Barcelona in February, 2017.
Sources say that Nokia’s CEO will officially announce its aspirations to return to the mainstream smartphone market with the launch of its new products. According to an official slide from Nokia, next year will see “Nokia brand’s return to smartphones.”
Following the collaboration between Microsoft and Nokia – management at the Finnish multi-communications company decided to shut up shop around the world and brought hardware production to a complete halt. According to the deal, Microsoft will hold the rights to Nokia's feature phones for a 10-year period. But the deal freed the “Nokia” brand name from licensing, starting October 2016.
The questions being raised among competitors has now emerged – and speculation over who will produce the new Nokia phones has surfaced. Microsoft produced the Lumia phones from 2014 to 2016, and Nokia hardware facilities around the world don't exist anymore. So for the production of its upcoming smartphones, Nokia signed a deal with a consortium of companies including Microsoft in May.
In terms of software, a shift toward Android seems inevitable. The company has already experimented with Windows Phone OS, without much luck and now might be a good time to invest in the Android OS since it has seen a lot of development while Nokia was absent from the smartphone market.
The smartphone market has been dynamically changing and ever since Nokia stopped production, things have been turned on their head — Chinese brands such as Xiaomi have moved into the U.S. market, while Apple has been incurring some significant losses and Samsung's flagships has been a terrible failure.
In addition to this, companies such as Google have begun designing their own phones, with the Pixel already creating a lot of buzz this year. For Nokia to make an impact in such a business environment, it will need to bring its core strengths back to the table — durability and long battery life. However, this time it may have to package these qualities in an Android smartphone.