World's largest mobile phones supplier, with a 33% market share at Sept. 30, 2005; Strong product offering, high innovative capacity, and strong brand; Large scale and efficient logistics, leading to above-average operating margins; Very low capital intensity of industry, leading to strong free cash flows; and Negligible debt and €11 billion in gross cash and equivalents at Sept. 30, 2005. Fiercely competitive environment that results in ongoing pressure on market share, profitability, and operating cash flows; Ongoing challenge of maintaining a portfolio of phones that meets fast-changing consumer demands; Rapid technological evolution, including transitions to third-generation (3G) wireless technology and to data-centric software from voice-centric hardware; and Nokia's weak market positions in the U.S. and Japan. The ratings on Finland-based
