Nokia Capital Markets Day
Nokia today has their Nokia Capital Markets Day, which you can follow here. Below is a bit of a summary for the interesting tidbits. :)
In the opening remarks Jorma Ollila points out the sources of competitive advantage of Nokia being: Products; Brand; Sourcing, logistics and manufacturing; Technology; Economies of scale; Software…. An interesting mix, even though I am not sure many of them qualify as a sustainable competitive advantage. They serve best at showing what Nokia wants to focus on in the future.
In the slides on Defining Tech Leadership, presented by Pertti Korhonen, the Nokia CTO, there is an explanation on why the platform idea is so important for Nokia. They show the definition of platform giving as an example the VW Gold, Audi A3, Seat Leon and Skoda Fabia, all four cars built on the same basic platform.
It also shows that the latest Series 60 device, based on Symbian 7, the 6600, will be good for operator branding as it has a skinnable version of Series 60, meaning that Vodafone could simply ship it with a Vodafone Live! skin and hence look at feel. With this, Nokia at least gives in half way to operators who want to push their own brand. It also details that the biggest part by a big margin of Nokia’s R&D spending is on Software.
Olli-Pekka Kallasvuo talks about Expanding Mobile Voice. Here you see a direct comparison of Nokia and Dell, where Nokia actually looks fairly good. With only 2/3rd of the sales, but an almost 3times higher operating margin, Nokia’s operating cashflow is slightly bigger than that of Dell. The big difference is Nokia’s 24 and Dell’s 4 days of inventory, which is actually what makes Dell so amazing and where people have higher hopes for an opportunity for moving into other product lines is for Dell, where it is not for Nokia. Then there is the negative cash conversion cycle, -43 for Dell and -79 for Nokia, meaning that they are actually paying for their products 79 days after they sold them. Interestingly enough, Net working capital is a big minus for both of them, meaning that their currently liabilities are bigger than their current assets, which isn’t the best thing to have when a lot of people suddenly want money from you, but this is unlikely to happen to Nokia. It actually means that inventory and receivables are financed by suppliers and customers, without paying interest. How cool is that ey? ;)
Nokia is actually working hard to get the inventory days down though, just to get that one out of the way.
[Driving consumer multimedia](http://media.corporate-ir.net/media_files/webcast/2003/nov03/Nokia/PPT/Drivingconsumermultimedia.pdf) starts talking about the brand and shows that branding is a very long term project for Nokia. Then an interesting fact: Volumes of camera phones exceeded volumes of digital cameras in Q2 2003 and Nokia is today the world’s biggest camera manufacturer!!! :)
Then there are some interesting observations with this, for one, that the megapixel race is over and you now need to focus on picture quality, which is oh so true. Megapixel cameras should come in 2004 and they are pushing their cooperations with Kodak and HP here.
As for media, Nokia has a business unit that is already licensing content it seems and they will distribute among others on MMC card (get your act together with where you put the MMC card slot damn it!!!).
The N-Gage will have 100 titles by the end of 2004. They are in it for the long run and people will need to understand that.
As for the operator problem, being that they want to push their own brand, here are Nokia’s answers, what Nokia brings:
_
\- World class brand — creates consumer pull
\- Easy of use — enables higher ARPU
\- High quality — less need for customer service
\- Enabling operator differentiation_ (see the skinnability of 6600 above)
_\- Wide product range
\- Have the best support resources
\- Best partner for end to end data services market_