Nokia needs no introduction. Nokia, probably the largest manufacturer of cameras has held its leadership position in the cell phones industry as well. Nokia's constant innovation coupled with focus on user friendly technologies has helped secure leadership position in mobile communications.
Nokia has not been immune to rapid changes in market dynamics. It has so far been successful by developing user friendly technologies especially in the area of mobile internet. Growth in the use of the Internet also contributed to the increase in demand for mobile Internet and related mobile data and Internet applications.
[...] This model is quoted in Euros Sales Growth Rate The sales growth rate of between and used in the model was chosen based on past performances of the firm. In 2002, net sales fell by the first in as many years, dating back 1999. Sales might have fallen because of a market saturation of the firm's products. For this reasons the most realistic rates to choose were the above. Share price The share price of the firm is calculated using the free cash flow and the industry's average weighted average cost of capital (WACC). [...]
[...] Nokia may gain rave reviews, but then again customers might prefer to buy products from other rival companies like Sony- Ericsson or Motorola. These are questions of style and taste and the financial model is absolutely hopeless at dealing with these qualitative subjective issues. These same factors could however be the very matters that lead to the success of Nokia 2. Models do not create knowledge. One of the principal reasons for this is that financial models can only analyze existing knowledge or information. [...]
[...] Research and Development In 2002, Nokia continued to invest in its worldwide research and development network and co-operation. R&D increased by in 2001 and totaled EUR 3052 million (EUR 2985 million in 2001), representing of net sales ( of net sales in 2001) Outlook In 2002, Nokia confirmed its ability to perform well in a challenging environment, where there existed stiff competition from rival companies, a downturn in the global economy, September 11th terrorism events. Going into 2003, the company expects market conditions to remain challenging, in that changes in the communication industry are expected to increase competition and change the competitive landscape, which may affect their sales and operating profit negatively. [...]
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