At this time, I would like to welcome everyone to the Nokia first quarter 2007 earnings conference call. (Operator Instructions) I will now turn the call over to Mr. Bill Seymour, Head of Investor Relations. Sir, you may begin.

Thank you. Ladies and gentlemen, welcome to Nokia's first quarter 2007 conference call. I am Bill Seymour, Head of Nokia Investor Relations. Olli-Pekka Kallasvuo, President and CEO of Nokia; and Rick Simonson, CFO of Nokia are with me today. During this briefing and call, we will be making forward-looking statements regarding the future business and financial performance of Nokia in the mobile communications industry. These statements are predictions that involve risks and uncertainties, actual results may therefore differ materially from the results currently expected. Factors that could cause such differences can be both external, such as general economic and industry conditions, as well as internal operating factors. We have identified these in more detail on pages 12 to 24 in our 2006 Form 20-F and in our press release issued today. Our aim is to finish this call in approximately one hour. To view the supporting slides while listening to the call, please log on to nokia.com/investor. A replay of the call will be available shortly after this call until April 26. The call will also be archived on our website. Olli-Pekka, please go ahead.Olli-Pekka Kallasvuo: Thanks, Bill. Good morning and good afternoon, ladies and gentlemen. Nokia had a solid first quarter. Our gross margin was 33.1%, up 70 basis points sequentially. Excluding special items, Nokia operating margin of 13.6% was also up. The EUR 89 device ASP was the same as last quarter. Nokia operating capital was very strong at EUR 1.6 billion. Our device market share was 36%, flat sequentially, but up compared to last year. In a seasonally down market, net sales were actually up sequentially in multimedia and enterprise solutions, driven by highly popular products like the Nokia n73 multimedia, achieved an all-time record high quarterly net sales and operating margin. During the quarter, we started…

Thanks, Rick. These events we have seen in our industry over the last few months have really underlined the validity and virtues of Nokia's long-term business model. Nokia's key competitive advantages over the years have been its leading brand and world-class logistics and distribution. Having a few key products can make a big difference in the short term, and can pay you a lot in terms of share and margin, but that strategy does not form the basis of long-term competitive sustainability. Of course, our core strengths don't always fully insulate us from dips in our product cycle, however, these course trends continue to be a huge competitive advantage for Nokia. Looking at the current product portfolio, I am very encouraged after the recent product launches; and of course, there's more to come. We have been exploring what we believe will be the next wave of value creation for Nokia and its shareholders. I believe that in the future, Nokia’s long-term value will be driven by Internet convergence that enables Nokia to expand into music, cameras, video, games and enterprise applications. By offering people end-to-end experiences, including devices, applications and services, we provide simplicity and ease of use in these new areas of convergence. We believe that this value add for the consumer will translate into incremental clout and value to Nokia. We will be discussing about this in the near future. Thank you very much. Bill Seymour : Thanks. We will now continue with the Q&A session. As a friendly reminder, please limit yourself to one question only. Operator, please go ahead.

(Operator Instructions) Your first question comes from Bill Cusack – Bear Stearns. Bill Cusack – Bear Stearns: I want to talk a little bit about OpEx and margins. The drop in the OpEx in multimedia in particular was great, and I wonder about the sustainability in that; especially given the number of products that have launched in the last few weeks and will be launching over the next couple of months. Should we be watching for an OpEx increase, or is that something that we can see sustainable over the next few quarters? Thanks. Rick Simonson : Thanks for the question and noticing the impact. This is about gross margins, and let me start there. We have shown now two quarters of sequential increase in gross margins, so I think we have answered the question about stability there. OpEx, again, I feel good about how the team has been working at the OpEx. We really saw the benefit of the scale in multimedia. To your question of going forward, in the second quarter in terms of aggregate OpEx, of course, we expect an appropriate increase. On the Nokia level, you are going to see quite a larger number because of our larger infrastructure side, but let's focus back to devices, where I think your question was. What you are saying is, is that sustainable? I think we have shown that we struck a pretty good balance of the right level of OpEx so that we can sustain the operating margins at or above the targets we have given to you. We are operating in mobile phones and multimedia here at a pretty good rhythm, at or above those 17% target levels when you get down to operating profit. Bill Cusack – Bear Stearns: So you think that 17% holds going forward? Rick Simonson : We haven't changed that. It looks like by the numbers it's holding, and we also saw, I think importantly, you will have noticed the good improvement in the mobile devices and enterprise solutions and that makes a difference. Bill Cusack – Bear Stearns: That's great. Thanks very much.

Your next question comes from the line of Has Malik - Citigroup. Has Malik – Citigroup: I would like to ask a question on the U.S., and specifically if you could give us a bit more detail on what has driven the delays to the retail launch of the n75 in the U.S. market? Is it to do with operator testing? Is it to do with customization? Is it to do with the IPR issues? Particularly asking this question in light of Motorola's comments yesterday about some subsidy activity shifting from 2G to 3G in the U.S. market. A very strong quarter obviously, but the U.S. remains an area of weakness.

I understand the question is really about n75, as opposed to a wider question about the U.S., and in fact, I would be very, very optimistic that that product would be hitting the markets very soon. So that's something very positive I can almost report now here. Has Malik – Citigroup: And in terms of what has actually driven the delays so far?

The delay, of course, we can always talk about delays and how they do come about, but this matter here is a pretty complex matter. Mainly the delay has been related to operator testing. Has Malik – Citigroup: Thanks very much.

Your next question comes from the line of Tim Long - Banc of America. Tim Long - Banc of America : Olli-Pekka, could you talk a little bit about, obviously you have a competitor back on their heels right now and it seemed like Q1, very solid on both ASP and margins. Could you talk to us a little bit about how you look at your strategy on the tradeoff between market share and profitability over the next two quarters? Related to that, looking into Q2, you have a lot of new products. You highlighted some marketing expense that will be needed for that. Why is the goal not to gain share in Q2, rather than have flat shares sequentially? Thank you.

As always, that's a very good question and definitely, I continue to believe that we need a reasonable target for more market share; but at the same time, I think we need to tactically manage the situation that we maximize the bottom line in any given quarter. That's what we have been doing. Also now in the first quarter, we are not overly aggressive with our pricing, and in that way, we did maximize our bottom line and you saw a very good progress in the gross margin. However, I would like to take the opportunity really to talk about the good progress we have been seeing here when it comes to market share in certain parts of the market that are not always noticed. I think too much attention has been paid of late to our emerging market position, and there's been a lot of discussion about that. The good progress we have been making in other markets has been put aside. Now in the first quarter, we took market share in wideband CDMA, we took market share in music and very importantly, in addition to Asia Pacific, we took market share in Europe. Since we all know the nature of the European market, I think it's a very good illustration of the fact that we are making, really, a lot of headway in all tiers and all segments, price points of the market. In that way, you need to look at the market share but I think even more so going forward, also as the value market share as opposed to volume market share. I think the first quarter was the best possible illustration of the fact that we can grow our share outside the so-called emerging markets as well. I feel a lot of attention should be paid to that. However, of course like I said, the overall thinking goes and will continue to go, volume market stays important. You get the volume benefit in your sourcing because of that, and that's what we will target for the full year. When it comes to second quarter, we basically gave out the estimate that the markets will be approximately the same as in the first quarter; but obviously the full year target setting will be relevant in our thinking also in the second quarter.

Your next question comes from the line of Jeffrey Schlesinger - UBS. Jeffrey Schlesinger - UBS : Olli-Pekka, we have seen your numbers, your competitor numbers, ASPs have actually been pretty good in the first quarter. Do you think this is starting to reflect some of the dynamics in the emerging markets where there's an upgrade cycle now occurring, with trends in new product cycles in the developed markets? Second, you touched on long-term value being driven by Internet services and applications. Can you give us a sense of when, based on your model for rolling this out, when that will start to become evident to investors? That's it for now. Thank you.

Thank you, Jeffrey. Yes, I think, in fact, you are right in saying that in the emerging markets are not any more too simplistic when it comes to their dynamics. Obviously we are seeing the upgrade cycle happen more and more in China and also in India. But at the same time, there's a lot of possibility to do penetration increases as well. We cannot put that aside at all. We need to be very, very proactive in targeting more and more rural markets in India and really leverage the penetration increases as well. Of course, then we'll look at the operating in India and China, and in addition to that, like I said a moment ago, there's a pretty good opportunity in the multimedia area as well. I continue to think that the ASPs really then will reflect on how each of these markets will develop in the future. In that way, I'm not going to really give out ASP estimates, but at the same time, I'm pretty encouraged by the stability we have seen there now during the last two quarters. In that way, it is encouraging. Multimedia will be more and more important in that totality. Then we have the second question concerning the…? Jeffrey Schlesinger - UBS : The Internet services and applications that you touched on.

How can I forget that important – I mean, I am really ashamed here in the way that that is so relevant. We will be discussing our target setting when it comes to consumer Internet services and experiences in this business here in the near future. We are not in a position to communicate our final targets here as of yet. We feel we need to be able to be in a position to make a material addition to Nokia sales from Internet services and experiences business, but it's too early to comment on the final targets in this call. A lot of work is ongoing in that area and we are extremely committed and excited about the possibilities.

Your next question comes from the line of Mike Walkley - Piper Jaffray. Mike Walkley - Piper Jaffray: I wanted to go back to your comments on competitive inventory in the channel. Can you give us some color on which markets you still see some inventory out there, and which product tiers they are in?

Like I said in the opening, that fortunately the markets have been working through the excess inventory pretty well and the situation is more like normal as we speak. So in that way, I see less of an impact from that in Q2 in comparison to Q1. Like I said, it's more like normal. But definitely during first quarter it was a very interesting situation. I think the impact there has been quite a big difference between sell in and sell out market sizes. That really has distorted the picture quite a bit. In fact, it looks to me that in the first quarter the sell in market size was smaller than the sell out market size in a material manner. That definitely had an impact on the dynamics in the first quarter.

Your next question comes from the line of Richard Kramer - Arete. Richard Kramer - Arete : Thanks very much. On the last quarter conference call, you talked about turning up the heat, albeit slowly, on some of your competitors and exploiting some of their weaknesses. How might you intend to do so in the coming quarters? How might we see that or see Nokia benefit from the fact that several of your competitors seem to be refocusing on some internal issues or trying out new business models? Will this be something we see in a geographic sense? Will it be something we see, as you mentioned before, in terms of particular product segments or profitability? Or is there some push later in the year, perhaps not in the second quarter, for more market share? You really didn't address fully the question previously on the U.S. market. I think a year or so ago when you came on as CEO, you mentioned you were going to spend a week or so out of every month in the U.S. We continued to see units decline year on year. Can you give us some sort of prognosis, when and if the U.S. might turn around for Nokia, and what might spark that happening? Thanks.

I will start with the second question and then I will move on to this turning up the heat matter. If you look at the U.S. market and I simplify a bit, if you allow that, in order to make the point. So in China, we do have about 1.3 billion customers -- or potential customers -- meaning the consumers in that market. In the U.S., we have four -- and I'm not talking about billions here. Four customers. In that way, at the moment because of the operator dominance in the channel, you need to look at each of these customers separately. You have, in this way, one dimension only looking at this situation. So there we have to look at obviously, Verizon Wireless, Sprint Nextel, AT&T, and T-Mobile, the four customers that really are very, very important in the totality. I will discuss each of them separately, in that order, in fact. With Verizon, we definitely are undergoing a change in the business model, like you know. We decided to stop R&D and manufacturing and CDMA and move to an ODMA business model in CDMA and here Verizon Wireless comes to play very extensively. We have a very good cooperation, a very good discussion ongoing with Verizon here, as we are moving from one business model to another. That transition will take place during this year, and we will see the impacts of that transition in '08. With Sprint, it's partly a question about the same matter that I just spoke about when I mentioned Verizon; but more importantly, with Sprint we are making inroads to their new fourth generation WiMAX networks both on the systems side and in the handset side. Again here, looking at their implementation schedules, the relevant time period for that change is also…

Your next question comes from the line of Paul Sagawa - Bernstein. Paul Sagawa – Bernstein: If I'm looking at some significant differences between shipments into the channel and out of the channel in the first quarter, it would suggest that the end demand in the first quarter was really quite robust. You reported on a ship in basis 18% year-over-year market growth. If there were a material difference between sales out and shipments in, we're looking at growth maybe approaching 20% or even over 20% year-over-year. Now, if we look at your overall market guidance of 10% growth for the full year and for flattish to slightly up market in the second quarter, despite an idea that perhaps the shipments in and the sales out would equilibrate a little bit more with the channel inventory situation, are we to read that you are implying some sort of real inflection point in the nature of demand in the marketplace and that we would see a material slowdown? Or is your overall guidance more just taking the light of trying to set an overall conservative target and not meant to be explicitly looking at that particular dynamic? The second piece I wanted to ask was about the 3G side of this. When do you expect HSDPA to be a significant device market? If we look at the sales for this year, 2007, in 2006 globally 10% of the market were 3G units. Where do you think that will be for 2007? Thanks. Rick Simonson : I will take the in and out question in terms of the sell in/sell out and channel inventory. Olli-Pekka will comment on HSDPA. Let me answer what was your next to last question, which is are we changing our estimate about the overall industry and the…

I will take the HSDPA. I think that's a very good question in the way that of course, there's been a lot of us also trying to understand how quickly HSDPA will become mainstream. I have to tell you, the operator opinions on how they are going to invest to how aggressively vary a lot from market to market. We definitely do have many operators who are investing in a major way in HSDPA and seeing that really having an impact. I in fact believe in that scenario. I think the data speeds simply are something that are so grateful to consumers that once you get that experience, you will buy in to that, and that's basically the 3G in the real sense of the word. But it varies from market to market. I think a good illustration of what is happening here is the fact that we introduced in March our first HSDPA product, n95, and now in the second quarter we are already coming up with two more, namely the 6110 and the e90. In that way, when the market leader starts to ramp up its HSDPA offering, we have seen what type of impact that can have. I'm quite a big believer in HSDPA, but obviously when it comes to this year 2007 the total impact from the market will be smaller.

Your next question comes from the line of Kulvinder Gersha - Credit Suisse. Kulvinder Gersha - Credit Suisse : Could you just clarify? I think you said that entry level rose in the mix in the first quarter, and given what the overall device gross margins did, mobile phones or otherwise, it seems that's not having any impact. So you are preserving very high gross margins there, combined with the fact that you are diversifying suppliers somewhat and the single-chip solution is ramping up, if anything, that should expand. Is that the right way of thinking about it? Rick Simonson : We did say, you heard right, that in terms of the entry level was up a bit in Q1 from Q4, but only a bit. That's how we said this would play out. That's working well. We continue to show the breadth of our portfolio there, our cost basis and our distribution advantage has allowed us to continue to drive good margins in the entry business. We feel good about how we have the operations working when it comes to executing in the low end; the cost structure and then importantly the product portfolio is just going from strength to strength as we go through the years. So a good way to think about it. Kulvinder Gersha - Credit Suisse : Last time around, when you moved chip sets, your major chip set platforms, the ramp was from three-quarters, maybe four. Is that something similar to this type of evolution? Now you want to do it as quickly? Rick Simonson : When you are talking about the ramp to the new chip set, was that the question? Kulvinder Gersha - Credit Suisse : Exactly. Rick Simonson : We will have a significant ramp in that, and in that way…

Your next question comes from the line of Gareth Jenkins - Deutsche Bank. Gareth Jenkins - Deutsche Bank: Two questions on free cash flow, if I can. You have very strong free cash flow in the quarter. I wonder if you can talk about the component parts of the non-operational stuff, so networking capital movements and the cash tax which seemed quite low, what the sustainability of those are and whether there are any more one-off impacts that we saw last quarter coming into this. Secondly related to that, Rick, and at the risk of sounding like a broken record, the generosity of your payout to shareholders is already market leading. I wonder whether, given the strength of your free cash flows covering the dividend essentially that you are paying in Q2, what you feel you can pay out going forwards from here? Is there a potential upside or do you see acquisitions going from here? Rick Simonson : Cash flow, I love to talk about it. 1.6 billion operating cash flow in the quarter, the same as fourth quarter, and who would have predicted that? When you are at the high watermark in what is traditionally your best quarter, Q4, strong cash flow and we do the same in the first quarter. There has been a lot of good operational work there. Part of it is we are seeing the benefit of what I talked about in the second quarter and going into the third quarter last year as mentioned, we had some higher inventories than usual. Part of that was in the network side. We said that we would work through that and we did. We saw the benefit of that in the fourth quarter. We managed that well. So we see the continued good work and the…

I really see the acquisitions happening but rather on the software and Internet technology side than on the hardware side.

Your final question comes from the line of Mark Sue - RBC Capital. Mark Sue - RBC Capital : Thank you. Rick, are there any thoughts on the financial implications of market share gains from current levels? Can we quantify the costs and then the subsequent benefit to earnings for each 100 basis points of market share, for example? I ask because mathematically it seems the benefits can be really significant when you get to, let’s say about 40% market share. Rick Simonson : We have said and continue to believe that there's no reason not to have aspirations to go to 40% market share, but we are going to do it in a sustainable way that doesn't trade off total profitability for market share. We are going to continue to execute. I think Olli-Pekka laid it out quite well in terms of what our strategy is. There is benefit. We have shown that as the leader. We would expect to manage it so that as we increase market share, we will continue to enjoy that benefit and perhaps pick up some incremental benefit, as you say.

Thank you. Bill Seymour : Ladies and gentlemen, this concludes our conference call. I would like to remind you that during the conference call today we have made a number of forward-looking statements that involve risks and uncertainties. Actual results may therefore differ materially from the results currently expected. Factors that could cause such differences can be both external, such as general economic and industry conditions, as well as internal operating factors. We have identified these in more detail on pages 12 to 24 in our 2006 Form 20-F and in our press release issued today. Thank you and have a nice day.