Nokia brand remains well known for its feature phones, but the brand has virtually no presence in the smartphone market. Gaining a meaningful market share with sufficient profitability in an already saturated market could therefore prove a daunting task. Hon Hai's engagement in the same business model for Sharp TVs in China could experience the same difficulty. These operational headwinds have weakened Hon Hai's EBITDA margin, which is unlikely to improve quickly due to high initial development costs for new products and business infrastructure. We believe Hon Hai's traditional operations in electronic manufacturing services (EMS) supported by its stable and strong profitability from, even if the company cannot quickly turn around the Nokia mobile phone business. We do not expect
