World's largest mobile phone supplier, with a 35% market share at Dec. 31, 2006 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 Negligible debt and €8.5 billion in gross cash and equivalents at Dec. 31, 2006 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 needs and preferences Rapid technological evolution, including transitions to third-generation (3G) wireless technology and to data-centric software from voice-centric hardware Nokia's weak market positions in the U.S. and Japan The ratings on Finland-based
