Nokia Q2 2008 net sales EUR 13.2 billion, EPS E...

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Market share gains and strong profitability drive EPS growth
(excluding special items)

Nokia Corporation
Interim report
July 17, 2008 at 13.00 (CET +1)

The complete press release with tables is available at


http://www.nokia.com/results/results2008Q2e.pdf.


+-----------------------------------------------------------------------------------------------------+
|NOKIA SECOND QUARTER 2008 OPERATING RESULTS SUMMARY                                                  |
|-----------------------------------------------------------------------------------------------------|
|Reported & Excluding Special Items1, 2                                                               |
|-----------------------------------------------------------------------------------------------------|
|EUR million |Q2/2008         |Q2/2007          |YoY Change       |Q1/2008          |QoQ Change       |
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|Net sales - |                |                 |                 |                 |                 |
|reported    |          13 151|           12 587|               4%|           12 660|               4%|
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|  Devices & |                |                 |                 |                 |                 |
|Services    |           9 090|            9 163|              -1%|            9 263|              -2%|
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|  Nokia     |                |                 |                 |                 |                 |
|Siemens     |                |                 |                 |                 |                 |
|Networks    |           4 067|            3 438|              18%|            3 401|              20%|
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|            |                |                 |                 |                 |                 |
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|Group       |                |                 |                 |                 |                 |
|operating   |                |                 |                 |                 |                 |
|profit  -   |                |                 |                 |                 |                 |
|reported    |           1 474|            2 359|             -38%|            1 531|              -4%|
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|  Group     |                |                 |                 |                 |                 |
|operating   |                |                 |                 |                 |                 |
|profit -    |                |                 |                 |                 |                 |
|excluding   |                |                 |                 |                 |                 |
|special     |                |                 |                 |                 |                 |
|items1, 2   |           1 934|            1 393|              39%|            1 864|               4%|
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|  Group     |                |                 |                 |                 |                 |
|operating   |                |                 |                 |                 |                 |
|margin -    |                |                 |                 |                 |                 |
|excluding   |                |                 |                 |                 |                 |
|special     |                |                 |                 |                 |                 |
|items1, 2   |           14.7%|            11.1%|                 |            14.7%|                 |
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|            |                |                 |                 |                 |                 |
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|Devices &   |                |                 |                 |                 |                 |
|Services    |                |                 |                 |                 |                 |
|operating   |                |                 |                 |                 |                 |
|profit -    |                |                 |                 |                 |                 |
|reported    |           1 565|            1 779|             -12%|            1 883|             -17%|
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|  D&S       |                |                 |                 |                 |                 |
|operating   |                |                 |                 |                 |                 |
|profit -    |                |                 |                 |                 |                 |
|excluding   |                |                 |                 |                 |                 |
|special     |                |                 |                 |                 |                 |
|items1      |           1 824|            1 779|               3%|            1 964|              -7%|
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|  D&S       |                |                 |                 |                 |                 |
|operating   |                |                 |                 |                 |                 |
|margin -    |                |                 |                 |                 |                 |
|excluding   |                |                 |                 |                 |                 |
|special     |                |                 |                 |                 |                 |
|items1      |           20.1%|            19.4%|                 |            21.2%|                 |
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|            |                |                 |                 |                 |                 |
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|Nokia       |                |                 |                 |                 |                 |
|Siemens     |                |                 |                 |                 |                 |
|Networks    |                |                 |                 |                 |                 |
|operating   |                |                 |                 |                 |                 |
|profit -    |                |                 |                 |                 |                 |
|reported    |             -47|           -1 266|                 |              -74|                 |
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|  NSN       |                |                 |                 |                 |                 |
|operating   |                |                 |                 |                 |                 |
|profit -    |                |                 |                 |                 |                 |
|excluding   |                |                 |                 |                 |                 |
|special     |                |                 |                 |                 |                 |
|items1, 2   |             154|             -361|                 |              -39|                 |
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|  NSN       |                |                 |                 |                 |                 |
|operating   |                |                 |                 |                 |                 |
|margin -    |                |                 |                 |                 |                 |
|excluding   |                |                 |                 |                 |                 |
|special     |                |                 |                 |                 |                 |
|items1, 2   |            3.8%|           -10.5%|                 |            -1.1%|                 |
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|            |                |                 |                 |                 |                 |
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|Group Common|                |                 |                 |                 |                 |
|Functions - |                |                 |                 |                 |                 |
|reported    |             -44|            1 846|                 |             -278|                 |
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|  Group     |                |                 |                 |                 |                 |
|Common      |                |                 |                 |                 |                 |
|Functions  -|                |                 |                 |                 |                 |
|excluding   |                |                 |                 |                 |                 |
|special     |                |                 |                 |                 |                 |
|items1      |             -44|              -25|                 |              -61|                 |
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|            |                |                 |                 |                 |                 |
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|Net Profit -|                |                 |                 |                 |                 |
|reported    |           1 103|            2 828|             -61%|            1 222|             -10%|
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|  Net       |                |                 |                 |                 |                 |
|Profit  -   |                |                 |                 |                 |                 |
|excluding   |                |                 |                 |                 |                 |
|special     |               1|                 |                 |                 |                 |
|items1, 2   |             365|            1 259|               8%|            1 451|              -6%|
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|            |                |                 |                 |                 |                 |
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|EPS, EUR    |                |                 |                 |                 |                 |
|Diluted -   |                |                 |                 |                 |                 |
|reported    |            0.29|             0.72|             -60%|             0.32|              -9%|
|------------+----------------+-----------------+-----------------+-----------------+-----------------|
|  EPS, EUR  |                |                 |                 |                 |                 |
|Diluted -   |                |                 |                 |                 |                 |
|excluding   |                |                 |                 |                 |                 |
|special     |                |                 |                 |                 |                 |
|items1, 2   |            0.36|             0.32|              13%|             0.38|              -5%|
+-----------------------------------------------------------------------------------------------------+



Note 1 to table relating to figures excluding special items:
Q2 2008 special items
- EUR 259 million of charges related to closure of the Bochum site in
Germany (impacting Devices & Services operating profit).
- EUR 201 million restructuring charge and other one time items
(impacting Nokia Siemens Networks operating profit).
Please see "Q2 2007 special items" of net positive EUR 966 million,
and "Q1 2008 special items" of net negative EUR 333 million, on page
11 in this press release for a description of the special items for
those quarters.

Note 2 to table relating to Nokia Group operating profit, Nokia
Siemens Networks operating profit and Nokia EPS, both reported and
excluding special items, and Nokia Group operating margin and Nokia
Siemens Networks operating margin, excluding special items:
In addition to the special items, Nokia Siemens Networks reported
operating profit in Q2 2008 included EUR 120 million of intangible
asset amortization and other purchase price accounting related items
arising from the formation of Nokia Siemens Networks; Q2 2007
included a total of EUR 297 million of intangible asset amortization,
other purchase price accounting related items and inventory value
adjustments arising from the formation of Nokia Siemens Networks; and
Q1 2008 included EUR 120 million of intangible asset amortization and
other purchase price accounting related items arising from the
formation of Nokia Siemens Networks.

EPS excluding special items, intangible asset amortization and other
purchase price accounting related items arising from the formation of
Nokia Siemens Networks was EUR 0.37 in Q2 2008; EUR 0.35 in Q2 2007
(also excluding inventory value adjustments); and EUR 0.39 in Q1
2008.

SECOND QUARTER 2008 HIGHLIGHTS
- Nokia net sales of EUR 13.2 billion, up 4% year on year and up 4%
sequentially (up 11% and 7% at constant currency).
- Devices & Services net sales of EUR 9.1 billion, down 1% year on
year and down 2% sequentially (up 6% and 1% at constant currency).
- Nokia Siemens Networks net sales of EUR 4.1 billion, up 18% year on
year and up 20% sequentially (up 26% and 23% at constant currency).
- Services and software net sales of EUR 119 million, up 42%
sequentially.
- Nokia diluted EPS of EUR 0.36, up 13% year on year, excluding
special items.
- Nokia operating margin of 14.7%, up from 11.1% in Q2 2007 and flat
sequentially, excluding special items.
- Devices & Services operating margin of 20.1%, up from 19.4% in Q2
2007 and down sequentially from 21.2%, excluding special items.
- Nokia Siemens Networks operating margin of 3.8%, excluding special
items, and 6.7%, excluding special items and purchase price
accounting related items arising from the formation of Nokia Siemens
Networks.
- Nokia operating cash flow of EUR 1.5 billion.
- Estimated industry mobile device volumes of 303 million units, up
15% year on year and up 3% sequentially.
- Nokia mobile device volumes of 122 million units, up 21% year on
year and up 6% sequentially.
- Nokia estimated mobile device market share of 40%, up from 38% in
Q2 2007 and up from 39% sequentially.
- Nokia mobile device ASP of EUR 74, down sequentially from EUR 79
(approximately 40% of the decline was caused by the impact of
exchange rate movements).

OLLI-PEKKA KALLASVUO, NOKIA CEO:
"Nokia delivered increased device market share and strong underlying
profitability in the quarter. Looking at the rest of the year, we are
optimistic and have had good feedback about the broad range of new
products we expect to sell in our device business. In the second
quarter we saw good momentum in the early stages of our services and
software business, and we believe that the next wave of growth will
be driven by devices linked with services. On the infrastructure
side, Nokia Siemens Networks delivered a second quarter with good net
sales growth and improved profitability."

INDUSTRY AND NOKIA OUTLOOK
- Nokia expects industry mobile device volumes in the third quarter
2008 to be up sequentially.
- Nokia expects its mobile device market share in the third quarter
2008 to be approximately at the same level sequentially.
- Nokia now expects industry mobile device volumes in 2008 to grow
10% or more from the approximately 1.14 billion units Nokia estimated
for 2007. This is an update to Nokia's earlier estimation that
industry mobile device volumes would grow approximately 10% in 2008.
- Nokia continues to target an increase in its market share in mobile
devices in 2008.
- Nokia and Nokia Siemens Networks continue to target for Nokia
Siemens Networks market share to remain constant in 2008, compared to
2007.
- Nokia and Nokia Siemens Networks continue to expect the mobile
infrastructure and fixed infrastructure and related services market
to be flat in Euro terms in 2008, compared to 2007.
- Nokia and Nokia Siemens Networks continued cost synergy target for
Nokia Siemens Networks is to achieve substantially all of the EUR 2.0
billion of targeted annual cost synergies by the end of 2008, as
previously announced.

OUTLOOK FOR FINANCIAL IMPACT OF NAVTEQ
Nokia expects NAVTEQ to be slightly dilutive to EPS in 2008,
approximately neutral in 2009 and accretive thereafter, excluding
purchase price accounting related items arising from the NAVTEQ
acquisition. On a reported basis, Nokia expects NAVTEQ to be slightly
dilutive to EPS in 2008, 2009 and 2010, and accretive thereafter.
Nokia currently expects to recognize approximately EUR 2 billion of
intangibles related primarily to the navigable map database and
customer relationships. We expect these intangibles to be amortized
over approximately five years. Net of deferred taxes, we expect the
impact on our Consolidated Profit and Loss Account of the purchase
price accounting related items arising from the NAVTEQ acquisition to
be approximately EUR 250 million on an annual basis.

Q2 2008 FINANCIAL HIGHLIGHTS
(Comparisons are given to the second quarter 2007 results, unless
otherwise indicated.)

Nokia Group
Nokia's second quarter 2008 net sales increased 4% to EUR 13.2
billion, compared with EUR 12.6 billion in the second quarter 2007.
At constant
currency, group net sales would have increased 11% year on year and
7% sequentially.

The following chart sets out the year on year and sequential growth
rates in our net sales on a reported basis and at constant currency
for the periods indicated.


+-------------------------------------------------------------------+
| NOKIA SECOND QUARTER 2008 NET SALES                               |
|-------------------------------------------------------------------|
| Reported & Constant Currency1                                     |
|-------------------------------------------------------------------|
|                                 | Q2/2008 vs.    | Q2/2008 vs.    |
|                                 | Q2/2007 Change | Q1/2008 Change |
|---------------------------------+----------------+----------------|
|                                 |                |                |
|---------------------------------+----------------+----------------|
| Group net sales - reported      |             4% |             4% |
|---------------------------------+----------------+----------------|
| Group net sales - constant      |                |                |
| currency1                       |            11% |             7% |
|---------------------------------+----------------+----------------|
|                                 |                |                |
|---------------------------------+----------------+----------------|
| Devices & Services net sales -  |                |                |
| reported                        |            -1% |            -2% |
|---------------------------------+----------------+----------------|
| Devices & Services net sales -  |                |                |
| constant currency1              |             6% |             1% |
|---------------------------------+----------------+----------------|
|                                 |                |                |
|---------------------------------+----------------+----------------|
| Nokia Siemens Networks net      |                |                |
| sales - reported                |            18% |            20% |
|---------------------------------+----------------+----------------|
| Nokia Siemens Networks net      |                |                |
| sales - constant currency1      |            26% |            23% |
+-------------------------------------------------------------------+


Note 1 to table relating to net sales figures at constant currency:
Change in net sales at constant currency excludes the impact of
changes in exchange rates in comparison to the Euro, our reporting
currency

Nokia's second quarter 2008 reported operating profit decreased 38%
to EUR 1.5 billion (including the EUR 460 million negative impact of
special items), compared with EUR 2.4 billion in the second quarter
2007 (including the EUR 966 million net positive impact of special
items). The special items for the second quarter 2008 included EUR
259 million of charges related to the closure of the Bochum site in
Germany (impacting Devices & Services operating profit) and a
restructuring charge and other one time items of EUR 201 million
(impacting Nokia Siemens Networks operating profit). The special
items for the second quarter 2007 included a EUR 1 879 million gain
on the formation of Nokia Siemens Networks (impacting Group Common
Functions operating result); EUR 905 million restructuring charges
and other one-time items in Nokia Siemens Networks (impacting Nokia
Siemens Networks operating profit); a EUR 15 million gain on sale of
real estate (impacting Group Common Functions operating
result); and EUR 23 million Nokia Siemens Networks related other
costs (impacting Group Common Functions operating result). Nokia's
second quarter 2008 reported operating margin was 11.2% (18.7%),
including the EUR 460 million negative impact of the special items.
Excluding the special items, Nokia's second quarter 2008 operating
margin was 14.7% (11.1%).

Operating cash flow for the second quarter 2008 was EUR 1.5 billion,
compared with EUR 1.5 billion for the second quarter 2007, and total
combined cash and other liquid assets were EUR 8.0 billion at June
30, 2008, compared with EUR 11.8 billion at December 31, 2007. At
June 30, 2008, our net debt-equity ratio (gearing) was -46%, compared
with -61% at December 31, 2007.

Devices & Services
In the second quarter 2008, the total mobile device volume of our
Devices & Services group reached 122 million units, representing 21%
year on year growth and a 6% sequential increase. The overall
industry mobile device volume for the same period reached 303 million
units based on Nokia's estimate, representing 15% year on year growth
and a 3% sequential increase.

Of the total industry mobile device volumes, converged mobile device
industry volumes in the second quarter 2008 increased to 37.1 million
units, based on Nokia's estimate, compared with an estimated 27.0
million units in the second quarter 2007. Our own converged mobile
device volumes rose to 15.3 million units in the second quarter 2008,
compared with 13.9 million units in the second quarter 2007. We
shipped over 10 million Nokia Nseries and almost 2 million Nokia
Eseries devices during the second quarter 2008.

The following chart sets out our mobile device volumes for the
periods indicated, as well as the year on year and sequential growth
rates, by geographic area.


+-------------------------------------------------------------------+
| NOKIA MOBILE DEVICE VOLUME BY GEOGRAPHIC AREA  |         |        |
|------------------------------------------------+---------+--------|
|                   |         |         | YoY    |         | QoQ    |
| (million units)   | Q2/2008 | Q2/2007 | Change | Q1/2008 | Change |
|-------------------+---------+---------+--------+---------+--------|
| Europe            |    27.1 |    27.1 |   0.0% |    25.7 |   5.4% |
|-------------------+---------+---------+--------+---------+--------|
| Middle East &     |         |         |        |         |        |
| Africa            |    21.1 |    17.1 |  23.4% |    20.2 |   4.5% |
|-------------------+---------+---------+--------+---------+--------|
| Greater China     |    17.6 |    15.9 |  10.7% |    21.0 | -16.2% |
|-------------------+---------+---------+--------+---------+--------|
| Asia-Pacific      |    36.4 |    25.6 |  42.2% |    34.1 |   6.7% |
|-------------------+---------+---------+--------+---------+--------|
| North America     |     4.5 |     4.1 |   9.8% |     2.6 |  73.1% |
|-------------------+---------+---------+--------+---------+--------|
| Latin America     |    15.3 |    11.0 |  39.1% |    11.9 |  28.6% |
|-------------------+---------+---------+--------+---------+--------|
| Total             |   122.0 |   100.8 |  21.0% |   115.5 |   5.6% |
+-------------------------------------------------------------------+


Based on our preliminary market estimate, Nokia's market share for
the second quarter 2008 was 40%, compared with 38% in the second
quarter 2007 and 39% in the first quarter 2008. Our year on year
market share increase was driven primarily by our strong position in
the fastest growing markets globally and by strong share gains in
Latin America, Asia-Pacific and a slight increase in North America.
Our market share decreased year on year in Middle East & Africa,
Greater China and Europe. We had sequential market share gains in
North America, Europe, Middle East & Africa and Asia Pacific. Our
market share decreased sequentially in Greater China and to a lesser
extent in Latin America.

Our mobile device average selling price (ASP) in the second quarter
2008 was EUR 74, down from EUR 90 in the second quarter 2007 and down
from EUR 79 in the first quarter 2008. The lower year on year and
sequential ASP was primarily due to a higher proportion of lower
priced products and the negative impact of the weaker US dollar.
Approximately 30% of the year on year decline and approximately 40%
of the sequential decline in ASP was caused by the impact of changes
in exchange rates. Starting from the first quarter 2008, our mobile
device ASP excludes net sales from our services and software
business. Prior periods have been reclassified for comparison
purposes.

Second quarter 2008 Devices & Services net sales declined 1% to
EUR 9.1 billion, compared with EUR 9.2 billion in the second quarter
2007. At constant currency, Devices & Services net sales would have
increased 6%. Strong overall volume growth was offset by an ASP
decline, driven primarily by a higher proportion of lower end devices
and the negative impact of the weaker US dollar on net sales in the
second quarter 2008, compared to the second quarter 2007.

Net sales year on year growth was strongest in Latin America,
followed by Asia-Pacific and Middle East & Africa. Net sales were
down in Europe, North America and Greater China year on year. Of our
total Devices & Services net sales, services and software net sales
were EUR 119 million in the second quarter 2008, up from EUR 84
million in the first quarter 2008.

Devices & Services gross profit decreased 3% to EUR 3.3 billion,
compared with EUR 3.4 billion in the second quarter 2007, with a
gross margin of 36.1% (36.7%). The year on year gross margin decrease
was primarily due to a higher proportion of sales of lower end
devices, a lower proportion of new high-end devices shipping in
volumes, and a mix shift of sales to lower margin regions during the
second quarter 2008.

Devices & Services reported operating profit decreased 12% to EUR 1.6
billion (including the negative impact of the EUR 259 million special
item), compared with EUR 1.8 billion in the second quarter 2007, with
a reported operating margin of 17.2% (19.4%). Second quarter 2008
reported operating profit included EUR 259 million of charges related
to the closure of the Bochum site in Germany. The 3% year on year
increase in operating profit for the second quarter 2008, excluding
the special item, was driven primarily by effective operating
expenses control partially offset by a decrease in gross margin,
compared to the second quarter 2007. Excluding the special item,
Devices & Services second quarter 2008 operating margin was 20.1%
(19.4%).

Nokia Siemens Networks
Second quarter 2008 net sales increased 18% to EUR 4.1 billion,
compared with EUR 3.4 billion in the second quarter 2007. At constant
currency, Nokia Siemens Networks net sales would have increased 26%.
Net sales year on year growth was strongest in Latin America,
followed by Middle East & Africa, Greater China and Europe. Net sales
were down in Asia-Pacific and North America. The higher year on year
net sales primarily reflected the favorable comparison to the second
quarter 2007, which was negatively impacted by challenges related to
the start of operations of Nokia Siemens Networks, which commenced on
April 1, 2007.
The following chart sets out Nokia Siemens Networks net sales for the
periods indicated, as well as the year on year and sequential growth
rates, by geographic area.


+-------------------------------------------------------------------+
| NOKIA SIEMENS NETWORKS NET SALES BY GEOGRAPHIC AREA      |        |
|----------------------------------------------------------+--------|
|                   |         |         | YoY    |         | QoQ    |
| EUR million       | Q2/2008 | Q2/2007 | Change | Q1/2008 | Change |
|-------------------+---------+---------+--------+---------+--------|
| Europe            |   1 412 |   1 186 |  19.1% |   1 212 |  16.5% |
|-------------------+---------+---------+--------+---------+--------|
| Middle East &     |         |         |        |         |        |
| Africa            |     553 |     369 |  49.9% |     448 |  23.4% |
|-------------------+---------+---------+--------+---------+--------|
| Greater China     |     413 |     294 |  40.5% |     269 |  53.5% |
|-------------------+---------+---------+--------+---------+--------|
| Asia-Pacific      |   1 076 |   1 183 |  -9.0% |     944 |  14.0% |
|-------------------+---------+---------+--------+---------+--------|
| North America     |     158 |     164 |  -3.7% |     192 | -17.7% |
|-------------------+---------+---------+--------+---------+--------|
| Latin America     |     455 |     242 |  88.0% |     336 |  35.4% |
|-------------------+---------+---------+--------+---------+--------|
| Total             |   4 067 |   3 438 |  18.3% |   3 401 |  19.6% |
+-------------------------------------------------------------------+


Nokia Siemens Networks gross profit increased 114% to EUR 1.1
billion, compared with EUR 534 million in the second quarter 2007,
with a gross margin of 28.2% (15.5%). The increase in gross profit in
the second quarter 2008 resulted primarily from the favorable
comparison to the second quarter 2007, which had significant costs
associated with restructuring charges, other special items and
inventory value adjustments related to the start of operations of
Nokia Siemens Networks.

Nokia Siemens Networks had a second quarter reported operating loss
of EUR 47 million (including the negative impact of EUR 201 million
in special items), compared with a reported operating loss of EUR 1.3
billion in the second quarter 2007 (including the negative impact of
EUR 905 million in special items), with a reported operating margin
of -1.2% (-36.8%). The reported second quarter 2008 operating loss
included a restructuring charge and other one time items of EUR 201
million. The reported second quarter 2007 operating profit included a
charge of EUR 905 million related to Nokia Siemens Networks
restructuring costs and other one time charges. The operating margin
for the second quarter 2008, excluding these special items, was 3.8%
(-10.5%).

The operating profit in the second quarter 2008, both reported and
excluding special items, also included EUR 120 million of intangible
asset amortization and other purchase price accounting related items
arising from the formation of Nokia Siemens Networks. Second quarter
2008 operating margin was a positive 6.7%, excluding both the special
items and the purchase price accounting related items arising from
the formation of Nokia Siemens Networks. The operating profit in the
second quarter 2007, both reported and excluding special items, also
included EUR 297 million of purchase price accounting related items
arising from the formation of Nokia Siemens Networks (EUR 115
million) and inventory value adjustments (EUR 182 million). Second
quarter 2007 operating margin was -2%, excluding both the special
items, the purchase price accounting related items and the inventory
value adjustments arising from the formation of Nokia Siemens
Networks. The year on year improvement in operating profit, excluding
both the special items, the purchase price accounting related items
and the inventory value adjustments arising from the formation of
Nokia Siemens Networks, reflected the higher net sales, improved
gross margin and lower operating expenses. Nokia Siemens Networks
continued to be on track to deliver the annual EUR 2 billion cost
synergy target as previously announced.

Q2 2008 OPERATING HIGHLIGHTS
Nokia
- Nokia announced plans to acquire Symbian Limited, the UK based
software company that develops and licenses Symbian OS, the leading
converged device software.
- Nokia and nine other industry leaders announced plans to establish
the Symbian Foundation to manage and unify the platform, to license
it on a royalty-free basis and ultimately to make it available as an
open source platform within two years. To date, more than 30 industry
leading companies have announced their support for the initiative and
intent to join.
- Nokia announced that it had completed its acquisition of Trolltech
ASA, a recognized software provider with world-class software
development platforms and frameworks.

Devices
- The Nokia E71 and Nokia E66, optimized for email, were announced in
June. These devices support email accounts from more than 1,000 ISPs
around the world, including Gmail, Yahoo! mail and Hotmail.
Additionally, the Nokia E71 and Nokia E66 support corporate email
solutions, including Microsoft Exchange, Nokia Intellisync Wireless
Email solution, SYSTEM Seven and Visto Mobile email. The Nokia E71
also began shipping during the quarter.
- Two other key products, the Nokia N78 and Nokia 6220, also began
shipping during the quarter.
- As part of our renewed strategy for North America, we announced the
Nokia 6205 exclusively with Verizon in June. The Nokia 6205 is
scheduled to begin shipping in July.
- In April, Nokia unveiled a new range of mobile devices specifically
for entry markets, highlighted by the Nokia 5000, our first
mega-pixel device priced at under EUR 100. All of these devices offer
support for email.
- In June, Nokia unveiled our latest collection of style-driven
devices, the Supernova collection. The flagship model of the
collection, the Nokia 7610 Supernova, is available in a range of
exchangeable color covers.

Services & Software
- Sony BMG Music Entertainment signed up to support Nokia Comes With
Music, with the top three music labels -- Universal Music Group
International, Warner Music Group and Sony BMG Music Entertainment --
now committed to this service concept.
- The Nokia Music Store opened in Australia, France, Italy, the
Netherlands, Singapore and Sweden, bringing to 10 the total number of
stores opened by the end of the second quarter.
- The N-Gage mobile games service became commercially available. The
service allows consumers to try all N-Gage games for free from any
one of the tens of millions of compatible Nokia devices in the
market.
- Nokia Maps 2.0 - our next generation location based service - was
released and downloaded over 406 000 times during the quarter.
- Nokia announced the acquisition of Plazes AG, to help Nokia to
accelerate its vision of bringing people and places closer together,
in line with our broader services strategy.

Nokia Siemens Networks
- Nokia Siemens Networks signed a multi-year managed services network
operations agreement with Embarq Corporation in the United States.
Nokia Siemens Networks also won a consulting contract with China
Mobile Group Beijing Ltd to improve the operator's user experience.
- Nokia Siemens Networks demonstrated its Internet High Speed Packet
Access (I-HSPA) solution with the world's fastest data call using a
mobile device in a test with Mobilkom Austria, in which data speeds
reached 10.1 Mbps.
- Nokia Siemens Networks launched the industry's first DWDM single
optical platform serving Metro to Core and added internet access to
its Village Connection solution.
- Nokia Siemens Networks won contracts with Celcom in Malaysia,
Tusmobil in Slovenia, TIM in Brazil, Zain in Iraq, DTAC in Thailand
and both Indosat and Telkomsel in Indonesia.
- Nokia Siemens Networks signed contracts for Mobile TV services with
Swisscom (in partnership with Nokia) and SingTel in Singapore. It
also signed a contract with T-Mobile Austria for its subscriber data
management solution, which allows the operator to manage its
customers' experience more proactively.
- In May, a consortium led by Nokia Siemens Networks launched a
commercial hosted mobile broadband service throughout Thalys'
high-speed European rail network. Nokia Siemens Networks also
concluded deals with GSM-Railway in India and Europe.

For more information on the operating highlights mentioned above,
please refer to related press announcements at the following links:


http://www.nokia.com/press and


http://www.nokiasiemensnetworks.com/press.

NOKIA IN THE SECOND QUARTER 2008
(International Financial Reporting Standards (IFRS) comparisons given
to the second quarter 2007 results, unless otherwise indicated.)

As of January 1, 2008, our three mobile device business groups,
Mobile Phones, Multimedia and Enterprise Solutions, and the
supporting horizontal groups were replaced by an integrated business
segment, Devices & Services. Prior period results for Nokia and its
reportable segments have been regrouped for comparability purposes
according to the new reportable segments (on an unaudited basis).
Devices & Services has three business units, Devices, Services &
Software and Markets, supported by a Corporate Development Office.
Link to regrouped 2007 financials: www.nokia.com/investors.

Nokia's net sales increased 4% to EUR 13 151 million (EUR 12 587
million). Net sales of Devices & Services decreased 1% to EUR 9 090
million (EUR 9 163 million). Net sales of Nokia Siemens Networks
increased 18% to EUR 4 067 million (EUR 3 438 million).

Reported operating profit decreased 38% to EUR 1 474 million (EUR 2
359 million), representing a reported operating margin of 11.2%
(18.7%). Reported operating profit in Devices & Services decreased
12% to
EUR 1 565 million (EUR 1 779 million), representing a reported
operating margin of 17.2% (19.4%). The reported operating loss in
Nokia Siemens Networks was EUR 47 million (loss of EUR 1 266
million), representing an operating margin of -1.2% (-36.8%). Group
Common Functions expenses totaled EUR 44 million (positive EUR 1 846
million).

Financial income was EUR 3 million (EUR 60 million). Reported Profit
before tax and minority interests was EUR 1 477 million (EUR 2 446
million). Reported net profit totaled EUR 1 103 million (EUR 2 828
million). Reported earnings per share decreased to EUR 0.29 (basic)
and to EUR 0.29 (diluted), compared to EUR 0.72 (basic) and EUR 0.72
(diluted) in the second quarter 2007. Earnings per share, excluding
special items, increased to EUR 0.36 (diluted), compared to EUR 0.32
(diluted) in the second quarter 2007.

NOKIA IN JANUARY - JUNE 2008
(International Financial Reporting Standards (IFRS) comparisons given
to the January-June 2007 results, unless otherwise indicated.)

As of January 1, 2008, our three mobile device business groups,
Mobile Phones, Multimedia and Enterprise Solutions, and the
supporting horizontal groups were replaced by an integrated business
segment, Devices & Services. Prior period results for Nokia and its
reportable segments have been regrouped for comparability purposes
according to the new reportable segments (on an unaudited basis).
Devices & Services has three business units, Devices, Services &
Software and Markets, supported by a Corporate Development Office.
Link to regrouped 2007 financials: www.nokia.com/investors.

As of April 1, 2007, Nokia results include those of Nokia Siemens
Networks on a fully consolidated basis. Nokia Siemens Networks, a
company jointly owned by Nokia and Siemens, is comprised of the
former Nokia Networks and Siemens' carrier-related operations for
fixed and mobile networks. Accordingly, the results of Nokia Group
and Nokia Siemens Networks for periods from April 1, 2007 are not
directly comparable to any prior period results. Prior periods
include the former Nokia Networks business group only.

Nokia's net sales increased 15% to EUR 25 811 million (EUR 22 443
million). Net sales of Devices & Services increased 6% to EUR 18 353
million (EUR 17 326 million). Net sales of Nokia Siemens Networks
were EUR 7 468 million (EUR 5 135 million).

Reported operating profit decreased to EUR 3 005 million (EUR 3 631
million), representing a reported operating margin of 11.6% (16.2%).
Reported operating profit in Devices & Services increased 14% to EUR
3 448 million (EUR 3 031 million), representing a reported operating
margin of 18.8% (17.5%). Reported operating loss in Nokia Siemens
Networks was EUR 121 million (EUR 1 188 million), representing a
reported operating margin of -1.6% (-23.1%). Group Common Functions
reported expenses totaled EUR 322 million (positive EUR 1 788
million, including a gain of EUR 1 879 million on the formation of
Nokia Siemens Networks).

In the period from January to June 2008, net financial income was EUR
71 million (EUR 108 million). Reported profit before tax and minority
interests was EUR 3 084 million (EUR 3 771 million). Reported net
profit totaled EUR 2 325 million (EUR 3 807 million). Reported
earnings per share decreased to EUR 0.61 (basic) and to EUR 0.61
(diluted), compared with EUR 0.97 (basic) and EUR 0.96 (diluted) in
the first six months of 2007. Earnings per share, excluding special
items, increased to EUR 0.74 EUR (diluted), compared to EUR 0.58
(diluted) in the first six months of 2007.

PERSONNEL
The average number of employees during January-June 2008 was 115 786.
At June 30, 2008, we employed a total of 117 212 people (112 262
people at December 31, 2007).

SHARES
The total number of Nokia shares at June 30, 2008 was 3 800 415 410.
At June 30, 2008, Nokia and its subsidiary companies owned 90 255 504
Nokia shares, representing approximately 2.4% of the total number of
Nokia shares and the total voting rights.

The complete press release with tables is available at


http://www.nokia.com/results/results2008Q2e.pdf.

FORWARD-LOOKING STATEMENTS

It should be noted that certain statements herein which are not
historical facts, including, without limitation, those regarding: A)
the timing of product, services and solution deliveries; B) our
ability to develop, implement and commercialize new products,
services, solutions and technologies; C) expectations regarding
market growth, developments and structural changes; D) expectations
regarding our mobile device volume growth, market share, prices and
margins; E) expectations and targets for our results of operations;
F) the outcome of pending and threatened litigation; G) expectations
regarding the successful completion of contemplated acquisitions on a
timely basis and our ability to achieve the set targets upon the
completion of such acquisitions; and H) statements preceded by
"believe," "expect," "anticipate," "foresee," "target," "estimate,"
"designed," "plans," "will" or similar expressions are
forward-looking statements. These statements are based on
management's best assumptions and beliefs in light of the information
currently available to it. Because they 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) competitiveness of our product,
service and solutions portfolio; 2) the extent of the growth of the
mobile communications industry and general economic conditions
globally; 3) the growth and profitability of the new market segments
that we target and our ability to successfully develop or acquire and
market products, services and solutions in those segments; 4) our
ability to successfully manage costs; 5) the intensity of competition
in the mobile communications industry and our ability to maintain or
improve our market position or respond successfully to changes in the
competitive landscape; 6) the impact of changes in technology and our
ability to develop or otherwise acquire complex technologies as
required by the market, with full rights needed to use; 7) timely and
successful commercialization of complex technologies as new advanced
products, services and solutions; 8) our ability to protect the
complex technologies, which we or others develop or that we license,
from claims that we have infringed third parties' intellectual
property rights, as well as our unrestricted use on commercially
acceptable terms of certain technologies in our products, services
and solution offerings; 9) our ability to protect numerous Nokia and
Nokia Siemens Networks patented, standardized or proprietary
technologies from third-party infringement or actions to invalidate
the intellectual property rights of these technologies; 10) Nokia
Siemens Networks' ability to achieve the expected benefits and
synergies from its formation to the extent and within the time period
anticipated and to successfully integrate its operations, personnel
and supporting activities; 11) whether, as a result of investigations
into alleged violations of law by some current or former employees of
Siemens AG ("Siemens"), government authorities or others take further
actions against Siemens and/or its employees that may involve and
affect the carrier-related assets and employees transferred by
Siemens to Nokia Siemens Networks, or there may be undetected
additional violations that may have occurred prior to the transfer,
or ongoing violations that may have occurred after the transfer, of
such assets and employees that could result in additional actions by
government authorities; 12) any impairment of Nokia Siemens Networks
customer relationships resulting from the ongoing government
investigations involving the Siemens carrier-related operations
transferred to Nokia Siemens Networks; 13) occurrence of any actual
or even alleged defects or other quality issues in our products,
services and solutions; 14) our ability to manage efficiently our
manufacturing and logistics, as well as to ensure the quality,
safety, security and timely delivery of our products, services and
solutions; 15) inventory management risks resulting from shifts in
market demand; 16) our ability to source sufficient amounts of fully
functional components and sub-assemblies without interruption and at
acceptable prices; 17) any disruption to information technology
systems and networks that our operations rely on; 18) developments
under large, multi-year contracts or in relation to major customers;
19) economic or political turmoil in emerging market countries where
we do business; 20) our success in collaboration arrangements
relating to development of technologies or new products, services and
solutions; 21) the success, financial condition and performance of
our collaboration partners, suppliers and customers; 22) exchange
rate fluctuations, including, in particular, fluctuations between the
euro, which is our reporting currency, and the US dollar, the Chinese
yuan, the UK pound sterling and the Japanese yen, as well as certain
other currencies; 23) the management of our customer financing
exposure; 24) allegations of possible health risks from
electromagnetic fields generated by base stations and mobile devices
and lawsuits related to them, regardless of merit; 25) unfavorable
outcome of litigations; 26) our ability to recruit, retain and
develop appropriately skilled employees; 27) the impact of changes in
government policies, laws or regulations; and 28) our ability to
effectively and smoothly implement our new organizational structure;
as well as the risk factors specified on pages 10-25 of Nokia's
annual report on Form 20-F for the year ended December 31, 2007 under
"Item 3.D Risk Factors." Other unknown or unpredictable factors or
underlying assumptions subsequently proving to be incorrect could
cause actual results to differ materially from those in the
forward-looking statements. Nokia does not undertake any obligation
to update publicly or revise forward-looking statements, whether as a
result of new information, future events or otherwise, except to the
extent legally required.


Nokia, Helsinki - July 17, 2008

Media and Investor Contacts:
Corporate Communications, tel. [phone]
Investor Relations Europe, tel. [phone]
Investor Relations US, tel. [phone]

- Nokia plans to report its Q3 2008 results on October 16, 2008

www.nokia.com


 
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