Nokia Reports Fourth-Quarter 2004 Net Sales of EUR 9.1 Billion, EPS EUR 0.23, and Nokia Reports 2004 Net Sales of EUR 29.3 Billion, EPS EUR 0.70

Nokia Reports Fourth-Quarter 2004 Net Sales of EUR 9.1 Billion, EPS EUR 0.23, and Nokia Reports 2004 Net Sales of EUR 29.3 Billion, EPS EUR 0.70

HELSINKI, Finland, January 27/PRNewswire-FirstCall/ --


The complete press release with tables is available at:
http://www.nokia.com/2004/Q4/index.html

Nokia in Q4 2004

(all comparisons are to fourth-quarter 2003 results regrouped according
to 2004 organization):

- Net sales increased 3% to EUR 9 063 million (EUR 8 789 million in Q4
2003), up 8% at constant currency.

- Operating profit decreased 19% to EUR 1 357 million (EUR 1 669
million), with an operating margin of 15.0% (19.0%).

- EPS (diluted) was EUR 0.23 compared with EPS (diluted) EUR 0.25 in the
fourth quarter 2003 (including a 4Q 2003 EUR 0.05 net negative impact
from one-time items) on net profits of EUR 1 019 million (EUR 1 168
million).

- Nokia mobile device volumes reached a record 66.1 million units, up
19%, resulting in an estimated market share of 34%.

- Mobile Phones net sales decreased 6% to EUR 5 660 million (EUR 6 038
million), with EUR 1 060 million operating profit (EUR 1 697 million)
and operating margin of 18.7% (28.1%).

- Multimedia net sales increased 29% to EUR 1 230 million (EUR 953
million).

- Enterprise Solutions net sales increased 122% to EUR 280 million (EUR
126 million).

- Networks net sales increased 12% to EUR 1 906 million (EUR 1 706
million), with EUR 260 million operating profit (EUR 41 million) and
operating margin of 13.6% (2.4%).

- Operating cash flow was EUR 0.8 billion (EUR 1.3 billion) and total
combined cash and other liquid assets were EUR 11.5 billion (EUR 11.3
billion) at the end of the year.


Nokia in full-year 2004

(all comparisons are to full-year 2003 results regrouped according to
2004 organization):

- Net sales decreased 1% to EUR 29 267 million (EUR 29 455 million in
2003), up 6% at constant currency.

- Operating profit decreased 14% to EUR 4 330 million (EUR 5 011
million), with an operating margin of 14.8% (17.0%).

- EPS (diluted) was EUR 0.70 (including a EUR 0.03 net positive impact
from one-time items) on net profits of EUR 3 207 million, compared with
EPS (diluted) of EUR 0.75 in 2003 (including a EUR 0.06 net negative
impact from one-time items) on net profits of EUR 3 592 million.

- Nokia mobile device volumes reached a record 207.7 million units,
resulting in an estimated market share of 32%.

- Mobile Phones net sales were EUR 18 507 million (EUR 20 951 million)
down 12%, down 5% at constant currency. Operating profit was EUR 3 768
million (EUR 5 927 million) and operating margin 20.4% (28.3%).

- Multimedia net sales increased 46% to EUR 3 659 million (EUR 2 504
million), with EUR 179 million operating profit (EUR 186 million
operating loss) and operating margin of 4.9% (-7.4%).

- Enterprise Solutions net sales increased 57% to EUR 830 million (EUR
529 million), with EUR 199 million operating loss (EUR 141 million
operating loss) and operating margin of - 24.0% (-26.7%).

- Networks net sales increased 13% to EUR 6 367 million (EUR 5 620
million), up 21% at constant currency. Operating profit was EUR 878
million (EUR 219 million operating loss) and operating margin 13.8%
(-3.9%).

- Operating cash flow was EUR 4.3 billion (EUR 5.3 billion) and total
combined cash and other liquid assets were EUR 11.5 billion (EUR 11.3
billion) at the end of the year.




Nokia's Board of Directors will propose a dividend of EUR 0.33 per share
for 2004 (EUR 0.30 per share for 2003).



JORMA OLLILA, CHAIRMAN AND CEO:



This was a year of record-breaking mobile device volumes for our
industry, which drove both the device and infrastructure markets forward.
Global mobile subscriptions also rose sharply to 1.7 billion for 2004.



For Nokia, device volumes also reached new highs for the fourth quarter
and full year largely backed by the ongoing boom in growth markets such as
Latin America, Russia, India and China, and brisk sales of color screen and
camera phones. Our North American phone volumes were, however, disappointing.



In the fourth quarter, Nokia's record mobile device volumes, together
with sequentially stable average selling prices and better-than-expected
infrastructure sales and profitability, pushed our net sales and EPS ahead of
guidance.



Nokia's full-year 2004 mobile device market share was 32%, based on an
estimated market volume of 643 million units. I am pleased with our steady
quarter-on-quarter market share gains during the second half. Based on an
estimated 194 million units for the market, we achieved a 34% share in the
fourth quarter largely as a result of sequential market share gains in
Asia-Pacific, China and Europe/Middle East/Africa.



During the fourth quarter, we started shipping the Nokia 6630, our latest
3G smartphone, and the initial response has been positive with more than 30
3G operators including it in their offering. In Western Europe, the Nokia
6230 was the top-selling phone in the industry for the fourth quarter - a
first for a camera phone. Of the 36 devices we announced in 2004, the
majority had cameras and nearly all had color screens. We also introduced
additional designs with ten new clamshell models, in addition to flip-open
messenger devices and the Nokia 9300 smartphone for enterprises. During 2004,
we continued to be the clear market leader in the GSM megapixel market and in
smartphones, which combines a handheld computer with a mobile phone.



Nokia's infrastructure sales and profitability in the fourth quarter
exceeded our expectations due to robust year-end spending by operators
combined with our shortened delivery lead times. Profitability was also
positively impacted by the successful resolution of a prior customer delivery
issue as well as a product mix favoring high-margin products. In
Asia-Pacific, we emerged as a clear leader in 3G WCDMA.



In our infrastructure business, 2004 was a pivotal year. We significantly
expanded our presence in India and Russia, and entered new markets in the
Middle East and Africa. In the second half, the pace of commercial 3G
launches intensified in more developed markets, with the number of
subscribers jumping to nearly 16 million by the end of 2004. By the end of
the year, we were a supplier to 28 of the 63 commercially launched 3G
networks.



The past year was demanding for Nokia. In response, we set five top
priorities in the areas of customer relations, product offering, R&D
efficiency, demand-supply management and the ability to offer end-to-end
solutions. We are making good progress in these areas, and I believe we are
now better positioned to meet future challenges as a result.



Our fourth-quarter performance was clearly a reflection of the ability of
the Nokia team to rapidly respond to faster-than-expected market growth. I
thank everyone for putting our customers first and stretching to meet and
exceed our targets.



-------------------------------------------------------------------------
NOKIA Q4 and 2004
-------------------------------------------------------------------------
EUR million Q4/2004 Q4/2003 Change (%) 2004 2003 Change (%)
-------------------------------------------------------------------------
Net sales 9 063 8 789 3 29 267 29 455 -1
-------------------------------------------------------------------------
Mobile Phones 5 660 6 038 -6 18 507 20 951 -12
-------------------------------------------------------------------------
Multimedia 1 230 953 29 3 659 2 504 46
-------------------------------------------------------------------------
Enterprise Solutions 280 126 122 830 529 57
-------------------------------------------------------------------------
Networks 1 906 1 706 12 6 367 5 620 13
-------------------------------------------------------------------------
Operating profit 1 357 1 669 -19 4 330 5 011 -14
-------------------------------------------------------------------------
Mobile Phones 1 060 1 697 -38 3 768 5 927 -36
-------------------------------------------------------------------------
Multimedia 164 107 53 179 -186
-------------------------------------------------------------------------
Enterprise Solutions -43 -59 -199 -141
-------------------------------------------------------------------------
Networks 260 41 878 -219
-------------------------------------------------------------------------
Common Group Expenses -84 -117 -296 -370
-------------------------------------------------------------------------
Operating margin (%) 15.0 19.0 14.8 17.0
-------------------------------------------------------------------------
Mobile Phones (%) 18.7 28.1 20.4 28.3
-------------------------------------------------------------------------
Multimedia (%) 13.3 11.2 4.9 -7.4
-------------------------------------------------------------------------
Enterprise Solutions -15.4 -46.8 -24.0 -26.7
(%)
-------------------------------------------------------------------------
Networks (%) 13.6 2.4 13.8 -3.9
-------------------------------------------------------------------------
Financial income and 116 71 63 405 352 15
expenses
-------------------------------------------------------------------------
Profit before tax and 1 463 1 731 -15 4 709 5 345 -12
minority interests
-------------------------------------------------------------------------
Net profit 1 019 1 168 -13 3 207 3 592 -11
EPS, EUR
-------------------------------------------------------------------------
Basic 0.23 0.25 -8 0.70 0.75 -7
-------------------------------------------------------------------------
Diluted 0.23 0.25 -8 0.70 0.75 -7
-------------------------------------------------------------------------




All reported Q4 and 2004 figures can be found in the tables on pages
(10-12) and (19-24).



BUSINESS DEVELOPMENT AND FORECASTS



Fourth-quarter 2004 sales



Nokia fourth-quarter net sales increased 3% to EUR 9.1 billion, compared
with fourth quarter 2003 (EUR 8.8 billion). At constant currency, group net
sales would have been up 8% year on year.



In Nokia's Mobile Phones, Multimedia and Enterprise Solutions business
groups, combined mobile device volume for the fourth quarter was up 29%
sequentially and 19% year on year to 66.1 million units, setting a new
quarterly volume record. Market volume growth for the same periods was
estimated to be 22% sequentially and 29% year on year. Nokia's year-on-year
volume growth was fastest in China and Latin America followed by Asia-Pacific
and Europe/Middle East/Africa. This was partially offset by lower volumes in
North America. Latin America, Europe/Middle East/Africa and China saw the
strongest sequential volume growth for Nokia. Nokia's estimated market share
for the fourth quarter was 34%, compared with 32% in the previous quarter and
37% in the fourth quarter 2003. The sequential market share gains were made
in Asia-Pacific, China and Europe/Middle East/Africa.



Nokia's combined mobile device net sales in euro terms were virtually
flat year on year, primarily due to significantly increased sales in China,
Latin America and Asia-Pacific, and moderately increased sales in Europe,
offset by significantly lower sales in North America.



Mobile Phones business group fourth-quarter net sales decreased 6% year
on year to EUR 5.7 billion (EUR 6.0 billion) compared with the fourth quarter
2003. Sales were impacted by price pressure and the further weakening of the
US dollar, which was only partially offset by the increase in volumes.



Multimedia business group fourth-quarter net sales were up 29% year on
year to EUR 1.2 billion (EUR 953 million) with sales of imaging smartphones
continuing to make a significant contribution. The sales of games devices
continued to be disappointing mainly due to weak sales in the US market.



Enterprise Solutions business group fourth-quarter net sales grew 122%
year on year to EUR 280 million (EUR 126 million) as a result of strong sales
of business-focused mobile devices and high-end firewalls.



Networks business group fourth-quarter net sales increased 12% year on
year to EUR 1.9 billion (EUR 1.7 billion) due to robust year-end spending by
operators combined with our shortened delivery lead times.



Fourth-quarter 2004 profitability



Nokia Group's fourth-quarter operating profit decreased 19% to EUR 1 357
million compared with fourth quarter 2003 (EUR 1 669 million) with an
operating margin of 15.0% (19.0%). Networks and Multimedia operating profit
improvement was more than offset by the lower operating profit in Mobile
Phones.



Fourth-quarter 2004 operating profit included a one-time positive item of
EUR 50 million representing the premium return under our multi-line,
multi-year insurance program, which expired during 2004. The return was due
to our low claims experience during the policy period. Operating profit also
included a research and development impairment in Networks of EUR 50 million
related to the WCDMA radio access network project and a loss of EUR 12
million from the divestiture of Nextrom. Fourth-quarter 2003 operating profit
included a negative impact of EUR 151 million related to a goodwill
impairment as well as R&D impairment of EUR 108 million at Networks.



In the fourth quarter, Mobile Phones operating profit decreased 38% to
EUR 1 060 million (EUR 1 697 million) with an 18.7% operating margin (28.1%)
primarily due to the factors noted above under Fourth quarter 2004 sales.



Multimedia fourth-quarter operating profit increased 53% to EUR 164
million with an operating margin 13.3% due to the strong performance in
imaging smartphones sales.



Enterprise Solutions fourth-quarter operating loss was EUR 43 million
with an operating margin of -15.4%, in line with our expectations.



Networks fourth-quarter operating profit of EUR 260 million (EUR 41
million) and 13.6% (2.4%) operating margin was due to the successful
resolution of a prior customer delivery issue as well as a product mix
favoring high-margin products. Fourth-quarter operating profit in 2004 and
2003 were negatively impacted by research and development and goodwill
impairments as noted above.



2004 sales



For 2004, Nokia net sales decreased 1% to EUR 29.3 billion, compared with
2003 (EUR 29.5 billion). At constant currency, group net sales would have
been up 6%. Our gross margin in 2004 was 38.0%, compared with 41.5% in 2003,
primarily reflecting lower sales in Mobile Phones.



In Nokia's Mobile Phones, Multimedia and Enterprise Solutions business
groups, combined mobile device volume was up 16% in 2004 compared to 2003,
reaching 207.7 million units, setting a new annual volume record. Market
volume growth for the same period was estimated to be 31%. Nokia's volume
growth in 2004 was fastest in Latin America, China and Asia Pacific, moderate
in Europe/Middle East/Africa, and partially offset by volume declines in
North America. Nokia's estimated market share for 2004 was 32%, based on an
estimated industry volume of 643 million units, compared with 38% in 2003.



Mobile Phones business group 2004 net sales decreased 12% to EUR 18.5
billion, compared with 2003 (EUR 21.0 billion). At constant currency, Mobile
Phones business group net sales would have decreased by 5%. Despite an
increase in volumes, sales were negatively impacted by a decline in prices.
In the second quarter of 2004, we selectively lowered the prices of certain
of our products, which contributed to our stated aim of improving our market
share sequentially towards the end of the year, but adversely impacted sales
for the remainder of 2004. In addition, general downward price pressure in
the device market and a significantly weaker US dollar negatively impacted
Mobile Phones net sales during 2004 compared to 2003.



Multimedia business group 2004 net sales were up 46% to EUR 3.7 billion
compared with 2003 (EUR 2.5 billion), driven primarily by robust sales of
imaging smartphones, achieved with the introduction of new models reaching a
broader range of the targeted customer base, offset in part by lower sales of
games devices, including N-Gage.



Enterprise Solutions business group 2004 net sales grew 57% to EUR 830
million compared with 2003 (EUR 529 million) primarily as a result of
increased sales of business-focused mobile devices.



Networks business group 2004 net sales increased 13% to EUR 6.4 billion
compared with 2003 (EUR 5.6 billion) due to increased sales in nearly all
markets as operators increased their investments in network infrastructure.
At constant currency, Networks business group net sales would have been up
21%.



2004 operating expenses



In 2004, research and development expenses were EUR 3.7 billion, down
0.7% from 2003. Research and development expenses represented 12.8% of net
sales in 2004, unchanged from 2003. Research and development expenses
increased in Mobile Phones, Multimedia and Enterprise Solutions and decreased
in Networks. R&D expenses in 2004 included impairments of EUR 115 million in
Networks (EUR 470 million in 2003 in Networks).



If R&D impairments, write-offs and personnel-related restructuring costs
in Networks were excluded from both the 2004 (impairments of EUR 115 million)
and 2003 (personnel-related restructuring costs, impairments and write-offs
totaling EUR 470 million) R&D expenses, the increase in R&D expenses would
have been 10%, and R&D expenses would have represented 12.4% of Nokia net
sales in 2004, compared with 11.2% of net sales in 2003.



In 2004, selling, general and administrative (SG&A) expenses were EUR 3.0
billion, down 12% from 2003. SG&A expenses were equal to 10.2% of net sales
in 2004, compared with 11.4% of net sales in 2003. SG&A expenses increased in
Multimedia and Enterprise Solutions and decreased in Mobile Phones and
Networks.



If the return of an insurance premium of EUR 160 million and a EUR 12
million loss from the divestiture of Nextrom were excluded from the 2004 SG&A
expenses, and if EUR 56 million from the sale of the remaining shares of
Nokian Tyres Ltd and restructuring costs of EUR 80 million related to
Networks were excluded from 2003 SG&A expenses, the decrease in SG&A expenses
would have been 7% and SG&A expenses would have represented 10.7% of Nokia
net sales in 2004, compared with 11.3% of net sales in 2003.



2004 profitability



Nokia Group's operating profit for 2004 decreased 14% to EUR 4 330
million compared with 2003 (EUR 5 011 million) primarily due to the lower
profitability in Mobile Phones. Our operating margin was 14.8% in 2004,
compared with 17.0% in 2003.



In 2004, Mobile Phones operating profit decreased 36% to EUR 3 768
million, compared with 2003 (EUR 5 927 million), with a 20.4% operating
margin, down from 28.3% in 2003, primarily due to lower net sales as a result
of the factors noted above.



Multimedia 2004 operating profit increased to EUR 179 million from an
operating loss in 2003 of EUR 186 million, with an operating margin of 4.9%,
up from - 7.4% in 2003. This was primarily due to strong sales of imaging
smartphones, partially offset by a loss in our games devices.



Enterprise Solutions 2004 operating loss increased 41% to EUR 199 million
compared with 2003, with an operating margin of - 24.0%, an improvement from
an operating margin of -26.7% in 2003. The operating loss was in line with
our expectations.



Networks 2004 operating profit increased to EUR 878 million from an
operating loss of EUR 219 million in 2003, and its operating margin improved
to 13.8%, up from -3.9% in 2003. This was primarily due to higher net sales,
a product mix favoring high-margin products, overall profitability of 3G
contracts, and a streamlined cost structure. Networks 2004 operating profit
included one-time items with a negative impact of EUR 115 million, compared
to one-time items during 2003 with a net negative impact of EUR 475 million,
as described below.



In 2004, the Common Group expenses were EUR 296 million, down 20% from
2003.



2004 one-time items



In 2004, Nokia's operating profit included the following one-time items:
positive items totaling EUR 160 million representing premium returns under
our multi-line, multi-year insurance program, which expired during 2004, due
to our low claims experience during the policy period; R&D impairments in
Networks totaling EUR 115 million due to the discontinuation of certain
products and base station horizontalization projects and an impairment
related to the WCMDA radio access network project; and a loss of EUR 12
million from the divestiture of Nextrom. Nokia's financial income in 2004
included a positive EUR 106 million item representing the gain on the sale of
the France Telecom bond.



In 2003, Nokia's operating profit included the following one-time items
within Nokia Networks: a positive adjustment of EUR 226 million as a result
of the customer finance impairment recorded in 2002 related to Mobilcom, and
R&D related costs totaling EUR 470 million, other restructuring costs of EUR
80 million, as well as a goodwill impairment of EUR 151 million related to
Nokia Networks' core networks business, with a total net impact of EUR 475
million. Operating profit also included a one-time gain of EUR 56 million on
the sale of the remaining shares of Nokian Tyres Ltd.



Capital structure



Operating cash flow for the year ended December 31, 2004 was EUR 4.3
billion (EUR 5.3 billion) and total combined cash and other liquid assets
were EUR 11.5 billion (EUR 11.3 billion). As of December 31, 2004, net
debt-to-equity ratio (gearing) was -78%.



Industry developments and outlook for 2005



Nokia continues to expect the overall mobile device market in 2005 to
grow approximately 10% in volume from an estimated 643 million units in 2004
and to grow also in value, but to a lesser extent. Growth is expected to
continue to be driven by replacement and upgrade sales in more developed
markets with the availability of new features, services and cameras, and by
new subscriber growth in developing mobile markets, as well as the widespread
commercialization of 3G devices in the second half of 2005.



In infrastructure, Nokia expects the overall market in 2005 to be
slightly up compared with 2004 in euro terms. We expect operators to continue
building coverage and expanding capacity in growth markets as well as
optimizing and expanding existing 2G networks in the more developed markets.
The continued roll-out of high-speed, high-capacity 3G networks is expected
to contribute to the market growth.



Nokia expects the competition in the mobile device and infrastructure
markets to further intensify in 2005 due to expected slower overall growth.



Nokia outlook for Q1 2005



First-quarter Nokia group net sales are expected to be in the range of
EUR 7.0 billion - EUR 7.3 billion, compared with EUR 6.6 billion in the first
quarter 2004. EPS (diluted) is expected to be in the range of EUR 0.12 - EUR
0.15, including an estimated charge of EUR 60 - EUR 80 million (equal to
approximately EUR 1 cent - EUR 1.5 cents per share) related to restructuring
actions announced to date, compared with EPS (diluted) EUR 0.17 in the first
quarter 2004.



MOBILE PHONES IN THE FOURTH QUARTER 2004



Nokia further renewed its mobile device offering in the fourth quarter
with the announcement of seven new models and the first shipments of nine
models.



Of the new models announced, three were from our middle range device
category. The Nokia 6020 is a business-focused camera phone in a classic
Nokia design and offers Push to talk over Cellular, while the first middle
range megapixel camera phone, the Nokia 3230, is based on the Series 60
Platform and features video recording and editing as well as Push to talk
over Cellular. The Nokia 3128 is a fold, or clamshell, phone designed
specifically for the Chinese market. All three models are expected to begin
shipping in the first quarter of 2005.



Nokia also announced and has begun shipping two new models for the entry
category: the Nokia 1108 with basic voice and messaging functionality, mainly
targeting Asian markets, and the Nokia 2651, an affordable, fold phone
targeting the Latin American market.



The company's CDMA offering was further expanded with two CDMA2000 1X
camera phones, the Nokia 6235 and Nokia 6235i. Shipments of these phones are
expected to begin in the second quarter of 2005.



In the fourth quarter, Nokia began shipping nine new models of which five
included cameras. These models covered all product ranges and designs: two
were entry models with color screens, the Nokia 2600 (GSM) and Nokia 3125
(CDMA); two were folding camera phones aimed at business users, the Nokia
6170 (GSM) and the Nokia 6255 (CDMA); and three were from the art-deco
inspired Fashion Collection, the Nokia 7260, Nokia 7270 and Nokia 7280.



MULTIMEDIA IN THE FOURTH QUARTER 2004



During the quarter, more than 30 operators worldwide, including in Japan,
helped make the Nokia 6630 3G WCDMA megapixel smartphone a leader in the
growing 3G WCDMA market. Nokia also began shipping the Nokia 6670 megapixel
smartphone.



The Nokia 7710 wide-screen multimedia smartphone, announced in the fourth
quarter, has generated significant market interest with its innovative design
and rich features. The Nokia 7710, which takes pen input and recognizes
individual handwriting, combines the capabilities of a smartphone and a
handheld computer. This makes it suitable for a broad customer base,
including consumers and business users.



In the developing area of mobile phone TV, Nokia signed several DVB-H
(Digital Video Broadcast - Handheld) mobile phone TV pilots, including one
with Crown Castle in the US and Bridgeway Networks in Australia, adding to
the global pilots already underway. During the quarter, the DVB-H standard
was finalized by the European Telecommunications Standards Institute (ETSI).



In games, sales of several key N-Gage titles started, including Pathway
to Glory, Pocket Kingdom and the Colin McRae Rally. Sales of N-Gage QD
started in China. By the end of the quarter, Nokia had cumulatively sold 1.3
million N-Gage devices.



ENTERPRISE SOLUTIONS IN THE FOURTH QUARTER 2004



During the fourth quarter, Nokia began shipping the Nokia 9500
Communicator, one of Nokia's first mobile devices on the market designed to
meet corporate IT demands for customized, manageable and secure mobile access
to email and enterprise software. Nokia's two high-end network security
gateways, the Nokia IP2250 and Nokia IP1220, continued to gain positive
traction in the market.



Nokia also introduced a strategy to become the device of choice for
mobile e-mail and messaging in the enterprise market. Several Nokia alliances
and activities were announced or reaffirmed during the quarter, including
agreements with Good Technology, Smartner and Visto and to provide a broad
range of e-mail options on Nokia business-optimized devices, such as the
Nokia 9500 Communicator and Nokia 9300 enterprise smartphone.



For images of the mobile devices mentioned in the above sections, please
click here: http://www.nokia.com/results2004Q4e.products.pdf



NETWORKS IN THE FOURTH QUARTER 2004



Nokia announced eight GSM/EDGE network expansion deals, including:

- AIS in Thailand
- Comcel in Columbia
- Henan MCC in China
- O2 in the UK
- Oi in Brazil
- ONE in Austria
- Porta in Ecuador and
- Smart in the Philippines.




We also extended our strategic cooperation with Cingular in the US with a
significant GSM/EDGE radio and core network contract, which also includes the
possibility to support the deployment of their 3G/UMTS network.



Nokia won WCDMA 3G expansion contracts with Hutchison in Austria and
Orange in Switzerland. By the end of the year, 33 Nokia customers were
rolling out WCDMA networks in 22 countries.



Nokia announced Push to talk over Cellular deals with Chungwa Telecom in
Taiwan, Eurotel in the Czech Republic, Oi in Brazil and with Telefonica
Moviles in Mexico. Nokia also signed contracts to deliver TETRA networks in
China.



In November, Nokia launched its End-user Services Consulting solution,
designed to help operators and service providers develop new successful
services for their consumer and enterprise customers.



TECHNOLOGY DEVELOPMENTS IN THE FOURTH QUARTER 2004



Nokia outlined plans to expand the Series 60 Platform for smartphones to
cover high-end and mid-range categories. As a part of this future development
the core features of the Series 90 platform will merge into Series 60 during
2006.



During the quarter, Nokia launched Preminet, a solution that lets
operators source leading Java(TM) and Symbian operating system software and
offers them a solution for delivery, billing and revenue distribution of that
content.



During the quarter, Nokia also announced important technology cooperation
agreements with operators. Nokia and France Telecom plan to jointly develop
new, rich media solutions to extend mobility, including remote access to
content stored at home. T-Mobile and Nokia agreed to cooperate on developing
T-Mobile specific applications for Series 60.



NOKIA IN OCTOBER - DECEMBER 2004



(International Accounting Standards, IAS, comparisons given to the fourth
quarter 2003 results, unless otherwise indicated. Business Group fourth
quarter 2003 figures are based on the unaudited, regrouped 2003 financial
results as published on March 25, 2004.)



Nokia's net sales increased 3% to EUR 9 063 million (EUR 8 789 million).
Sales of Mobile Phones decreased by 6% to EUR 5 660 million (EUR 6 038
million). Sales of Multimedia increased by 29% to EUR 1 230 million (EUR 953
million). Sales of Enterprise Solutions increased by 122% and totaled EUR 280
million (EUR 126 million). Sales of Networks increased by 12% to EUR 1 906
million (EUR 1 706 million).



Operating profit decreased by 19% to EUR 1 357 million (EUR 1 669
million), representing an operating margin of 15.0% (19.0%). Operating profit
in Mobile Phones decreased by 38% to EUR 1 060 million (EUR 1 697 million),
representing an operating margin of 18.7% (28.1%). Operating profit in
Multimedia increased to EUR 164 million (EUR 107 million), representing an
operating margin of 13.3% (11.2%). Enterprise Solutions reported an operating
loss of EUR 43 million (operating loss of EUR 59 million). Operating profit
in Networks increased to EUR 260 million (EUR 41 million), representing an
operating margin of 13.6% (2.4%) and including a negative impact from R&D
impairment totaling EUR 50 million. This impairment was related to the WCDMA
radio network access project. Common Group expenses totaled EUR 84 million
(EUR 117 million) and included a one-time positive item of EUR 50 million
representing the premium return under our multi-line, multi-year insurance
program, which expired during 2004. The return was due to our low claims
experience during the policy period. It also included a EUR 12 million
negative impact from the divestiture of Nextrom.



Financial income totaled EUR 116 million (EUR 71 million). During the
quarter, Nokia sold approximately 38% of the remaining holdings in its
subordinated convertible perpetual bonds issued by France Telecom. As a
result, the company booked a total net gain of EUR 35 million. The bonds had
been classified as available-for-sale investments and fair valued through
shareholders' equity. Profit before tax and minority interests was EUR 1 463
million (EUR 1 731 million). Net profit totaled EUR 1 019 million (EUR 1 168
million). Earnings per share decreased to EUR 0.23 (basic) and to EUR 0.23
(diluted), compared with EUR 0.25 (basic) and EUR 0.25, (diluted) in the
fourth quarter 2003.



Nokia repurchased through its share repurchase plan a total of 60 000 000
shares on the Helsinki Exchanges at an aggregate price of approximately EUR
0.727 billion during the period from October 15, 2004 to November 26, 2004.
The price paid was based on the market price at the time of repurchase. The
shares were repurchased to be used for the purposes specified in the
authorization held by the Board. The aggregate par value of the shares
purchased was EUR 3 600 000, representing approximately 1.3% of the share
capital of the company and the total voting rights. These new holdings did
not have any significant effect on the relative holdings of the other
shareholders of the company nor on their voting power.



It should be noted that certain statements herein which are not
historical facts, including, without limitation, those regarding: A) the
timing of product and solution launches and deliveries; B) our ability to
develop, implement and commercialize new products, solutions and
technologies; C) expectations regarding market growth, developments and
structural changes; D) expectations and targets for our results of
operations; E) the outcome of pending and threatened litigation; and F)
statements preceded by ''believe,'' ''expect,'' ''anticipate,''
''foresee'',"target" or similar expressions are forward-looking statements.
Because these statements involve risks and uncertainties, actual results may
differ materially from the results that we currently expect. Factors that
could cause these differences include, but are not limited to: 1)
developments in the mobile communications industry and the broader mobility
industry, including the development of the mobile software and services
market, as well as industry consolidation and other structural changes; 2)
timing and success of the introduction and roll out of new products and
solutions; 3) demand for and market acceptance of our products and solutions;
4) the impact of changes in technology and the success of our product and
solution development; 5) the intensity of competition in the mobility
industry and changes in the competitive landscape; 6) our ability to control
the variety of factors affecting our ability to reach our targets and give
accurate forecasts; 7) pricing pressures; 8) the availability of new products
and services by network operators and other market participants; 9) general
economic conditions globally and in our most important markets; 10) our
success in maintaining efficient manufacturing and logistics as well as the
high quality of our products and solutions; 11) inventory management risks
resulting from shifts in market demand; 12) our ability to source quality
components without interruption and at acceptable prices; 13) our success in
collaboration arrangements relating to technologies, software or new products
and solutions; 14) the success, financial condition, and performance of our
collaboration partners, suppliers and customers; 15) any disruption to
information technology systems and networks that our operations rely on; 16)
our ability to have access to the complex technology involving patents and
other intellectual property rights included in our products and solutions at
commercially acceptable terms and without infringing any protected
intellectual property rights; 17) developments under large, multi-year
contracts or in relation to major customers; 18) the management of our
customer financing exposure; 19) exchange rate fluctuations, including, in
particular, fluctuations between the euro, which is our reporting currency,
and the US dollar, the UK pound sterling and the Japanese yen; 20) our
ability to recruit, retain and develop appropriately skilled employees; 21)
our ability to implement our new organizational structure; and 22) the impact
of changes in government policies, laws or regulations; as well as 23) the
risk factors specified on pages 12 to 21 of the company's Form 20-F for the
year ended December 31, 2003 under "Item 3.D Risk Factors."



www.nokia.com

- Nokia will report 1Q results on April 21, 2005.
- Results announcements for 2Q and 3Q 2005 are planned for July 21, 2005,
and October 20, 2005, respectively.
- The Annual General Meeting will be held on April 7, 2005.



Source: Nokia

Media and Investor Contacts: Corporate Communications, tel. +358-7180-34495 or +358-7180-34900; Investor Relations Europe, tel. +358-7180-34289; Investor Relations US, tel. +1-914-368-0555


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