Ladies and gentlemen, welcome to Nokia’s Third Quarter 2009 Conference Call. I’m Kristian Pullola, Head of Nokia Investor Relations. Olli-Pekka Kallasvuo, President and CEO of Nokia, and Rick Simonson, CFO of Nokia are with me in Espoo today. During this briefing and call, we will be making forward-looking statements regarding the future business and financial performance of Nokia and its 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 11 to 28 in our 2008 20-F and in the press release issued today. Our aim is to finish this call in approximately one hour. To review the supporting slides while listening to the call, please go to the IR website. Please note that today’s press release and this presentation include non-IFRS results information in addition to the reported results information. Our quarterly results release includes a detailed explanation of the content of the non-IFRS information, as well as a reconciliation between the two. I would like to remind you that we will host our annual Capital Markets Day in Espoo, Finland, on Wednesday, December 2. This event will start with keynote presentations in the afternoon and in the evening, you will be invited to Nokia's main offices where you will be able to attend interactive breakout sessions on key topics as well as engage in open conversations with senior members of our executive team. We will also feature an Experience Lounge where you'll be able to interact hands-on with our latest devices and solutions. You can find more information by going to cmd.nokia.com. We hope to see you here in Espoo. With that, Ollie-Pekka, please go ahead.

Good morning and good afternoon. Q3 was a solid quarter for Nokia's devices and services business and I expect Q4 to be the best quarter of the year in terms of net sales, volumes and margins. In Q3, the demand environment for mobile handsets improved faster than anticipated in many markets. In this environment, I was pleased that our net sales performance given the component constraints we encountered. We did a very good job controlling our operating expenses, which helped us to deliver solid earnings. We are experiencing relative stability in the overall economic environment and it is encouraging to see some signs of recovery in our market. Let us be clear - uncertainty in end consumer demand remains. On the last earnings call, we provided new details on our services strategy but one of the big unanswered questions was who will be directly responsible besides me, of course. In Q3, we officially formed our new services unit headed by Alberto Torres and we have recruited new executives that will have leadership roles in that unit. The solutions unit is working together with our devices services and go to market teams. You can say that the solutions unit is a catalyst for better and faster collaboration. This is an important structural change that will improve our ability to execute as well as our ability to innovate as well. Our ambition is nothing less than to create the biggest delivery platform for services on the mobile. We can shape the industry and capture significant opportunities for growth by creating solutions that meet new consumer demands. Through our solutions operational mode, we deliver services, we deliver devices and relevant services that are designed to provide effortless and inspiring user experiences. In addition, we should not forget that the product focused operational mode…

Thanks, Olli-Pekka. I will begin by providing some color on our devices and services OpEx performance and our overall tax position. In both of these areas, our Q3 results were good and somewhat better than expected. In the quarter, devices and services non-IFRS OpEx was €1.36 billion. On a sequential basis, down €77 million in absolute terms and 210 basis points as a percentage of net sales. This was achieved through a combination of continuing to contain discretionary expenses and reducing structural costs. Year-to-date the headcount impact of measures we had announced totals approximately 4,000 people in devices and services and of these approximately 3,500 have already left the company. Taxes. In Q3, Nokia's taxes benefited from a favorable country profit next as well as net credits related to prior years. If Nokia's long-term estimated tax rate of 26% had been applied, non IFRS earnings per share would have been €0.02 lower. I just want to be clear as to the amount that we benefited from overall taxes in the quarter so that you can also see that we delivered underlying operating profits somewhat above the market expectations. Now let me take you through the Q3 results for devices and services. On a reported basis, devices and services net sales of €6.9 billion were up 5% sequentially and down 20% year on year. On a constant currency basis, devices and services net sales were up 6% sequentially and down 20% year on year. The sequential increase was attributable to higher volumes, particularly at the low-end and at the high-end of our product range. Nokia's device average selling price or ASP in the third quarter was €62, flat sequentially on a reported and constant currency basis. Nokia ended quarter three with 4 to 5 weeks of channel inventories, approximately flat sequentially…

Thank you, Rick. In the third quarter, we saw a better demand environment in the mobile handset industry and Nokia in fact did execute well. Our new products which span across a range of price points did very well in Q3 and we expect that our devices and services portfolio will continue to improve further in Q4. More importantly, Q3 was a quarter where we made very important progress in areas that are critical to our future success. We grew our active users from 46 million to 61 million. Focusing on active users is proving to be a very effective way to motivate our employees and accelerate the cultural change that is necessary within Nokia. We are also invigorating our executive team and employee base with talented new additions. I emphasized last quarter that Nokia must accelerate the pace of our strategic transformation. It is clear that we are doing so. With the formation of our new solutions unit, we are taking the next logical step. Naturally, we will also remain focused on our product mode of operation. He we already are investing class but there is a potential to improve and capture new opportunities as well. Thank you very much.

Thank you Olli-Pekka. We will now continue with a Q&A session. Please limit yourself to one question only. Operator, please go ahead.

Your first question comes from the line of Tim Boddy with Goldman Sachs. Tim Boddy – Goldman Sachs: Yes, thank you. I wondered if you could quantify the component impact on your Smartphone shipments and whether that actually also impacted the gross margin during the quarter? I also noticed that in Europe, despite very strong growth overall, you did see pressure in ASPs which is surprising given the sales of N97, I wondered if you could comment on that? Thank you.

Okay, it is Olli-Pekka here. So I will take this one. So yes, definitely, we were referring to the component constraints that we experienced in the third quarter, and the background here is basically the fact that a lot of sort of capacity was taken down in the electronics components industry during the end of – the latter half of last year and the first part of this year when the crisis hit. Now many of the suppliers are basically taking that capacity into use again and that has caused at times constraints for us as well as to other industry players. So, let me make it very clear. We would have sold both devices and smart phones in the third quarter with our peak capacity constraints. And in fact, the constraints in fact did hit the smart phones part of the business more than the rest of the devices. As an example, a good example of our constraint component is the camera model, it's typically of course is more used in the higher end of the portfolio as opposed to the low-end. As an example, now looking at the situation where we are now, like I said, it has been a situation where capacity will have –has been taken and will be taken into re-use and in that way the situation seems to be improving and has improved. Also, it is really a situation where I feel our experience in managing this business comes to play. We have really paid a lot of attention since June, July on this topic, and including senior management of course here. And I am pretty confident that we can manage the situation in the way that there is also upside, upside in the component availability. But you know that needs to be done…

Can we have the next question please?

Our next question comes from the line of Michael Walkley with Piper Jaffray. Michael Walkley – Piper Jaffray: Great. Thank you very much. Based on my calculations, your macro handset guidance for Q4 implies a 7% to 8% sequential growth for the industry. What factors do you see that leads to maybe less than normal seasonality? Is there inventory in certain markets in your competitors or do you believe the channel is unlikely to build inventory for the holiday season and that it might have better seasonal trends for the March quarter, or is it just that China and India are such a large part of the market and don't have big seasonal trends that this is kind of the new normal seasonality we should expect from the handset market?

Hi Mike, Rick. Let me hit on the last one. I'm not sure what the normal seasonality is given that we have gone from years of blooming seasonality that were double-digit Q3 to Q4 to the drop off with the collapse of the world economy at the last turn of the calendar. And now here I think we are somewhere in between. And as you said, given our update here with the numbers that we have printed through three quarters and then our guidance for the total year, remember those are rounded numbers and so you know we can be a little bit higher than that if you work your numbers. And then I think maybe the market was thinking, well, gee, certainly expect maybe 9% or 10% sequential growth, but maybe we will. And as Olli-Pekka pointed out too, we have some pretty good experience if there is more growth there of how do you play well into that with how we manage the flexibility in our factories and the supply chain. So you know I think really we are somewhere between last year's really abnormal economic crisis seasonality and then the previous growth years, we kind of feel right in the middle of that to me. The inventory in the industry is in good shape and the channel industry as we commented in the call, our inventory is good, so we don't think that there is, we think it is sustainable, given the end user demand. And you know we don't see that there's any kind of problem channel inventory that would prevent good shipments and that will match up well with user demand. So we are really seeing sell in, sell out, having equaled out here, and that phenomenon from the beginning of the year I think you can say is history. And you mentioned China and India. Increasingly of course, China and India are having a bigger impact to mute what used to be considered Christmas holiday seasonality, Q3, Q4, as they become bigger parts of the market. So yes I would agree with your statement. Michael Walkley – Piper Jaffray: Thank you very much.

Thank you. The next question please.

Our next question comes from the line of Mark Sue with RBC. Mark Sue – RBC: Thank you. Rick, the sequential rebound in devices operating margins in the fourth quarter, is that something sustainable into 2010 or do you feel Nokia still needs to ramp spending to defend (inaudible) implying big fluctuations in operating margins? And separately, Olli-Pekka, would Nokia ever consider a new operating system such as Android or something else?

Hi Mark. Rick, I will take the first, and you know again as we emphasize here, we expect our operating margin and devices and services to be up 100 basis points or more in the fourth quarter and we – that is a factor of improved product portfolio, a better mix, because we have more devices coming in that end, and as Olli-Pekka pointed out, the increase in the number of touch and clarity devices for instance. Of course then with the seasonal, the sequential growth will pick up in the low end as well, but we really think that those things drive increasing gross margin absolutely in the quarter compared to Q3 and this better performance with the upside in the operating profit. We will continue to manage the OpEx in a very prudent way. In terms of devices and services, of course, we would expect absolute OpEx in quarter four to be somewhat higher than Q3 because we have got the volumes, the ramp ups, some amount of that, but as a percentage of net sales, you should expect it to be pretty flat as we look quarter on quarter. Of course, that helps us give us leverage right into the operating margin. And you know that is the dynamic in devices and services. In you know for looking out into 2010, of course, we're going to give you a much deeper dive on that, the capital markets, and really would hold it to that, but to emphasize here, improvements in the product portfolio overall are coming. We're driving these two solutions – modes of operations so that we have the speed and flexibility and innovation on one hand, the low cost lead, scale and volume on the other. And we're showing here that we're bringing down our OpEx both structurally and in discretionary items in a way that is ahead of the guidelines I gave you earlier. So that is the kind of set up for 2010 and we'll put met on the bone at capital markets.

Okay. And I will continue onto operating system. So in fact if you look at our offering right now, so we don't believe in only one operating system. We are – we will be sort of launching the N900 based on Linux or Maemo in the fourth quarter. we of course continue to invest in Symbian, and definitely we will see that as our smart phone platform. We are investing in series 40 in the product side of the business. And in fact, quite interestingly we did launch our – at the moment launching a booklet, a mini laptop, using Windows 7, and this is really a mobile device if you look at the sort of functionality and the feature set there. So we are pragmatic as well. At the same time, the thinking here really is based on openness as well, and really Symbian and Linux or Maemo here, we believe will benefit from the openness and from the ability to try the ecosystem in that way. And it is quite interesting that you know if you look at the Symbian here, we did announce in the summer, a sort of major or significant cooperation agreement with Microsoft, where in fact Microsoft Office solutions will be co-created and ported on the Symbian, which definitely is something that in my mind gives a lot of credibility to Symbian as well. Will we – would we consider Android, we really don't have that thinking right now. And the basic thinking here is to go for openness, to go forward where you can add value, and that is what we believe we can do. There is a lot of work remaining of course with Symbian, that is very clear. Make no mistake. We understand that the user experience needs to improve, but you know we have got so much in the pipeline there, so much in the pipeline there, where we basically can in the right way, and this is a positive statement here, when I talk about legacy. We, in the right way and can combine the telecommunication legacy, the power consumption, the Linux version, the operator variant and openness working with Symbian. And you know that combination of the positive telecom legacy and the openness and innovation on top of that, you know that will be extremely competitive in the future. Having said that, I understand, yes, there is work that needs to be done, done there going forward, and there is so much that we have in the pipeline here.

Good, thank you. Could we have the next question please?

Our next question comes from the line of Stuart Jeffrey with Nomura. Stuart Jeffrey – Nomura: Hi there. Thank you very much. A question on Nokia Siemens, your comment saying that you are really having to prioritize the top line and market share, that sound a (inaudible) statement, in that we should perhaps be expecting quite a bit lower margins going forward, when I guess you can't be introducing products that quickly, so I am assuming pricing and contract terms in a way that you have to go try and turn around that market share. Could you just give us a bit more detail on that if that is one way to think about it and perhaps an update on how the (inaudible) changing now that you've got the former head of services heading NSN?

Hi Stuart, Rick. There is nothing ominous about that statement. I mean we are going to walk the right balance here. We need to do more in terms of picking back up some of the markets share that we have recently lost on the product side and that is what we are referring to here. On the services side, we actually continue to grow, we continue our lead. And with the new CEO Rajeev Suri coming from the services side, I'm confident and absolutely certain that we're going to continue to do that. But he started in the product side too, earlier in his career in infrastructure, so he knows both, he knows how they are linked to one another. Right now in this industry, you really do best by having both there, and leveraging one off of the other. What we have got to do is we've just got to make sure that with the right kind of terms and conditions, we start to fight back and pick up a bit more market share on the product side. And particularly 3G now is as Olli-Pekka said, you know we have got the industry-leading number of deployments and references in there. We have Flexi base stations that we're shipping that has remote upgradeable LTE. And so that's we have got a lot of the pieces in place to now start to have this market share recovery, so it is not just about going out there and competing on pricing and having that hit the gross margin in that ominous ways you referred to, Stuart. It is a balance.

Thank you. Could we have the next question please?

Our next question comes from the line of Kulbinder Garcha with Credit Suisse.

Thanks. Just a clarification and a question. My clarification is for Rick, on the operating margin expansion in Q4, should we assume that the OpEx will grow in absolute terms a lot less than it previously had in recent years, just given the more muted seasonality and the cost cutting? Or do you actually believe that the gross margins can meaningfully expand as well? And the second question, the question I really have is, more about the size of the industry. Given the amount of volume that you have seen MediaTek is selling, and I appreciate that sell in to handset vendors and not sell through, there can be some adjustment there, just the aggregate size of it, of what they are selling, does that not tell us possibility entire handset industry is much larger than the sell side? Gartner, Nokia, most of the observers have probably reported and maybe your share is low and how do you take into account, just a very sizable branded OEM and the gray market that seems to be existing in Asia right now? Thanks very much.

Okay. Let me step through this, Kullbinder. On your first question you asked is the seasonal absolute up tick in OpEx in devices and services going to be less than what has been historically, the answer is yes. You've also asked, or is it possible that there is actually underlying improvement in the gross margins, because we're getting paid for the value that we're delivering given the mix that we have. The answer there is yes as well, so it is both. But on the OpEx, your clear question, the clear answer, yes. Then you come to MediaTek and it is a question of you know how do we take MediaTek into account in our numbers and the market share estimates and all of that. And like you know I think who has written on this, there is a lot of claims out there and there is also quite a bit of confusion. It is not only sell-in versus sell-out but it is also you have to understand that MediaTek, they make a lot more chips than ever end up in actual devices to get in consumer hands because they have high failure rates. They have high quality problems and you have to do numerous subtractions from the numbers that are the chips that are supposedly made in MediaTek to get into to the actual devices that are out on the street. And of course you have to look at the original number and the claim on that is that even valid. So there is a pretty big gap there. But having said that, in our market estimates, we take into account everything that we can quantify reliability estimate from the market and we probably got – well not probably, we do have the most extensive global data network to capture that, and I think we captured it pretty well. And I think what you're seeing though is the whole industry is realizing that these OEM productions come from literally hundreds of small little shops. And many of them are copycat devices, many of them are outright you know fakes or forgeries, and some of them, or most of them also are using IPR that is not being paid for, are going a lot into what we call the tier 5 and 6 distribution levels in China and a little bit some of the other emerging markets. And those are hard to count precisely but we make estimates as others do and the important thing there is, the devices that are actually going in in those tiers that might not be accounted for hundred percent in yours and (inaudible) and other peoples market estimates in the past are ultra low end devices. So the value impact is I would argue much less even than the volume impact even if there is some millions that previously had been unaccounted for.

Would Nokia address that market then, Rick?

(inaudible) of course, we are addressing that market as we speak.

But we don't – we worry more about getting it in the hand and getting paid for that accounting some of these other things but we are doing our estimates on that. We're paying attention to that. And hopefully, you know, your question in this discussion and the research that you and others are doing hoping to clear up and shed some good light on this and some facts about what is happening, and what is not happening, but we are beyond competitive. We are ultra low-end is where we intend to continue to profit and grow.

Thank you.

Thank you. Could we have the next question please?

The next question comes from the line of Ittai Kidron with Oppenheimer. Ittai Kidron – Oppenheimer: Thank you. Rick, wanted to dig a little bit into the gross margin, give us a sense of magnitude on the operating margin side, can you possibly try and do the same on the gross margin, how much of that hedging is impacting still the next quarter or not? And with the change in mix, what sort of the magnitude we should expect gross margin to improve? And also if you can clarify on the component shortages, maybe I missed it, but it wasn't clear to me whether you expect that to also impact your fourth quarter or you think that at this point you have it under control?

Yes, let me take the first and Olli-Pekka the second since he's talked about components earlier. You know in terms of the gross margin as I mentioned to you we expect improvements there for the reasons I discussed previously. And we expect underlying improvement and basically what we are doing in the fourth quarter is we are going to offset some of the impact that we had in the third quarter from the net hedging effects which we talked about for a few quarters. We talked to you how this would develop and that is why the third quarter was what it was with the gross margins. But our underlying margins are absolutely improved as I said in the third quarter and they will get better in the fourth quarter with the mix as we talked previously. You know so in terms of the – you know I think quantifying that as we said, you know we have had a negative impact from the cost and FX position in the hundreds of basis points, and what we're seeing is that's history. We're starting to make that up and we're going to have improvement in the fourth quarter. We have taken down our sourcing of components as a percentage of our cost of sales to somewhat just about 15% here as we exit this quarter to where it was approximately closer to 25 percent and more at the end of 2008. That is one of the big changes that we have made and we have of course have negotiated price reductions there and we're working with those suppliers to make sure that they are able to take the efforts that they need to continue to supply competitively with us and I would say they're actually doing quite well in that regard. You also have to look at those major fluctuations in the euro dollar rate as well and we source most of our components there, so it is not just a question of yen. But let me be clear again, underlying gross margins for the devices and services improved in Q3 versus Q2. They will get better in Q4 and we will see that reflected in our estimate of hundred basis points or more improvement in the operating profit for devices and services in Q4. And components I think…

And components, I spoke at length about the components, so I just very briefly, so our sales were impacted somewhat by component trends in Q3. That somewhat did continue somewhat in Q4, that is what I said basically the bottom line was I believe we can manage that situation.

Thank you. Next question please.

Our next question comes from the line of Gareth Jenkins with UBS. Gareth Jenkins – UBS: Yes, thanks. A couple of quick ones if I can. Just going back to the margin, you gave us good detail on the revenues and ASPs with two new divisions, I just wonder whether if you could give us a sense of margins? And related to that and an earlier question, it seems the volume (inaudible) Q4 and since you've gotten should give you a 100 basis points of margin improvement on gross margins, so would you classify your guidance as overly prudent? And then secondly on solutions and kind of overall view more generally, it seems historically that you have some problems bringing three devices that have been coupled together with services, and I just wonder whether that poses a threat or a challenge going forward? Thanks.

Hi, Gareth. Let me take the first and ask Olli-Pekka to take the second. Well, overly prudent, I don't think our legal guys would let me comment on what – that attitude. I think – the point here is devices and services, we said will (inaudible) our expectations is hundred basis points or more improvement and I gave you a very clear view as you said on what we think is happening, with let's say in OpEx there. In terms of NAVTEQ, as you've seen we're actually with NAVTEQ at the top end. We are back to slight top line growth even after the collapse of the economy as we look at Q3 year on year here. And I think that that is quite encouraging. You saw good gross margins with NAVTEQ in the quarter and of course season – quarter four actually has very large seasonality in their business, from Q3 to Q4. So there of course absolute spend will be up there, but in terms of OpEx, a little bit percentage of net sales up a little bit, but again you are going to get very good seasonality improvement in sales gross margin and operating profit in NAVTEQ based on historical seasonality there. And NSN, we talked about fourth quarter is a seasonally strong quarter. It really goes fourth quarter is the best, second quarter is usually the next strongest and then you have seasonally weak first and third quarters in the industry. So Q4 we see shaping up as seasonally the normal expected kind of relative strength there. Of course, you would have your absolute amount of OpEx going up a little bit but as a percentage of net sales, it should go down materially. That's the area where you really get leverage when the top line moves in the NSN business, even much more than you get in devices and services. So maybe Olli-Pekka then will give the other…

And that is of course a very important question and you know that is exactly what we have been working on for the last two years in order to get better here. Because of course it is quite clear you are not combining hardware only in different constellations but you are adding services in order to send a solution. The complexity increases and you rightly pointed out that we have struggled in the past, couple of times with that complexity. Now looking at where we are now, of course we have been working on this topic, when it comes to modularity, when it comes to architecture, common planning and so forth, very intensely. And you know I really feel that we've got a good group on this one now. And every sort of product launch that we announce and the timings of those of course, that is done bearing in mind what is the services combination and what is the service integration to that one. So if you're saying that we will launch a product in Q4, that definitely includes the services component. And that's operating mode that will be even enhanced by the solutions unit provided (inaudible) and can really reap the benefit of the new strategy by doing so. Gareth Jenkins – UBS: Just a follow up I think my first – I am sorry, I misunderstood, great, thanks for the color on that. I can understand the (inaudible) the mix within the solutions business between the S30, S40 portion and the S60 Maemo portion?

Yes, there – yes, I think given the revenues that we did, and given more operational metrics, leave it at that and we will start building on that as we go forward in the future quarters. Gareth Jenkins – UBS: Ok, thank you.

Thank you. And operator, could we have the final question please?

Our final question will come from the line of Sherief Bakr with Citi. Sherief Bakr – Citigroup: Thanks very much. Rick, I wondered if you could maybe tell us what the actual underlying gross margin is and what the improvement has been? I think it is kind of very sensitive area and one of the reasons why we have seen a negative reaction to your stocks, I think it could be very helpful as people are trying to kind of benchmark what is temporary or structural gross margin level moving forward? And just as a quick follow-up for Olli-Pekka, in making this transition to solutions, could you maybe sort of help us understand how far along the way you are in making that transition, and at what point do you think you'll be delivering user experience and solution that you think will be best in class, assuming that is the actual objective? Thank you.

Yes, Sherief. 200 basis points plus or minus.

Yes. And that is of course no doubt but the most relevant question we can have here, so in that way, that is very good to have that as the final question. So of course here it is almost always question about you know, this is not like (inaudible). You either are there or then you are not there, but it is evolution. And that is how things happen in business. And you know we will see a lot of that evolution happening in the fourth quarter with some of the new devices that we will be launching. The music integration comes with music, with X6 is a great example. With a new user experience N97 mini will improve on the N97 even more and so forth and so forth. And I really look at – I have got a pretty good picture now on the road map here when it comes to solutions, the way we can integrate the devices and services as one seamless user experience. We have got a new management here, we have got new executives, and I've got a pretty good picture of that one. And I really believe we can evolve during the latter part of this year and we can continue to evolve next year as well. And but we will and nobody will ever get there because there are always things that you can do better.

Ladies and gentlemen, that 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 11 to 28 in our 2008 20F and in our press release today. Thank you.