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Nokia Reports Fourth Quarter 2006 Net Sales of EUR 11.7 billion, EPS of EUR 0.32

- Nokia Reports 2006 Net Sales of EUR 41.1 Billion, EPS of EUR 1.05

- Nokia Achieves Record Quarterly and Annual Device Volumes, Net Sales and EPS

- Net Sales Grew 13% in Q4 and 20% in 2006

- EPS Grew 28% in Q4 and 27% in 2006

- Nokia Board of Directors Will Propose a Dividend of EUR 0.43 Per Share for 2006 (EUR 0.37 Per Share for 2005)

The complete press release with tables is available at: http://www.nokia.com/results/results2006Q4e.pdf

NOKIA Q4 and 2006

EUR million Q4/2006 Q4/2005 Change 2006 2005 Change

(%) (%)

Net sales 11 701 10 333 13 41 121 34 191 20

Mobile Phones 7 076 6 217 14 24 769 20 811 19

Multimedia 2 136 2 024 6 7 877 5 981 32

Enterprise Solutions 305 153 99 1 031 861 20

Networks 2 184 1 951 12 7 453 6 557 14

Operating profit 1 519 1 368 11 5 488 4 639 18

Mobile Phones 1 257 1 060 19 4 100 3 598 14

Multimedia 326 310 5 1 319 836 58

Enterprise Solutions -64 -136 -258 -258

Networks 129 268 -52 808 855 -6

Common Group Expenses -129 -134 -481 -392

Operating margin (%) 13.0 13.2 13.3 13.6

Mobile Phones (%) 17.8 17.1 16.6 17.3

Multimedia (%) 15.3 15.3 16.7 14.0

Enterprise Solutions (%) -21.0 -88.9 -25.0 -30.0

Networks (%) 5.9 13.7 10.8 13.0

Net profit 1 273 1 073 19 4 306 3 616 19

EPS, EUR

Basic 0.32 0.25 28 1.06 0.83 28

Diluted 0.32 0.25 28 1.05 0.83 27

All reported Q4 and 2006 figures can be found in the tables on pages 8-10 and 18-23.

Special Items

Fourth quarter 2006 special items

- EUR 39 million Nokia Siemens Networks related incremental costs expensed during the fourth quarter (impacting Networks operating profit)

- EUR 84 million tax refund (included in taxes)

Excluding the net impact of these special items, diluted EPS was EUR 0.30

2006 special items

The following items had a net positive impact of EUR 87 million on operating profit:

- EUR 128 million of charges primarily related to the restructuring of the CDMA business and associated asset write-downs (included in Mobile Phones operating profit)

- EUR 276 million gain representing Nokia's (NYSE: NOK) share of the proceeds from the Telsim sale (included in Networks operating profit)

- EUR 14 million initial restructuring charge for the CDMA business in Mobile Phones - EUR 8 million restructuring charge in Enterprise Solutions - EUR 39 million Nokia Siemens Networks related incremental costs expensed during the fourth quarter (impacting Networks operating profit)

Other special items include:

- EUR 84 million tax refunds (included in taxes)

Excluding the net impact of these special items, diluted EPS was EUR 1.02

Fourth quarter 2005 special items

- EUR 29 million charge for Enterprise Solutions restructuring (impacting operating profit)

- EUR 48 million tax refund (included in taxes)

Excluding the net impact of these special items, diluted EPS remained at EUR 0.25

2005 special items

The following items had a net positive impact of EUR 80 million on operating profit:

- EUR 45 million gain for real estate sales (booked in the group common other income)

- EUR 61 million gain related to the divestiture of Nokia's Tetra business (EUR 42 million included in Networks and EUR 19 million included in Multimedia)

- EUR 18 million gain related to the partial sale of a minority investment (included in Networks)

- EUR 15 million negative impact for restructuring in Multimedia

- EUR 29 million charge for Enterprise Solutions restructuring

Other special items included:

- EUR 57 million gain for the sale of the France Telecom bond (included in financial income)

- EUR 48 million tax refund (included in taxes)

Excluding the net impact of these special items, diluted EPS was EUR 0.79

Fourth Quarter 2006 Highlights

- Nokia net sales up 16% sequentially and 13% year on year

- Nokia reported diluted EPS was EUR 0.32, and excluding special items was EUR 0.30

- Nokia gross margin 32.4%, up from 30.9% in Q3 2006, and gross margins were sequentially up in all business groups

- Nokia operating margin 13.3%, up from 12.2% in Q3 2006 (excluding special items)

- Nokia operating cash flow EUR 1.7 billion

- Nokia device ASP of EUR 89, down from EUR 93 in Q3 2006

- Nokia quarterly device volumes 106 million units, up 19% sequentially and 26% year on year

- Nokia estimated device market share 36%, unchanged from Q3 2006 and up from 34% in Q4 2005

- Estimated industry Q4 device volumes 290 million units, up 19% sequentially and year on year

- Nokia's Networks business group net sales up 21% sequentially and 12% year on year

Olli-Pekka Kallasvuo, Nokia CEO: "I am very pleased with Nokia's excellent quarterly and full year growth and performance, and I would like to personally thank the Nokia team for their great effort in making this happen. We achieved record device volumes, net sales and EPS for both the fourth quarter and full year 2006. Also, on a sequential basis profitability improved significantly, with gross margins for the quarter up in all Nokia business groups.

"Nokia was able to increase its share of the global device market significantly in 2006 to an estimated 36%, clearly solidifying our number one position in the industry. We achieved this result through the strengths of Nokia's world class brand, products, cost structure and efficiency, without sacrificing our operating margins or cash flow.

"I am also pleased with the net sales growth in Nokia's Networks business group, both in the fourth quarter and full year 2006, executing well on its strategy to grow its market share. The Nokia Siemens Networks integration work is progressing and the joint compliance review is under way. We expect to begin operations as previously communicated.

During 2006, Nokia continued to have excellent operating cash flow of EUR 4.5 billion, and we distributed EUR 4.9 billion to our shareholders through dividends and buybacks."

Industry and Nokia Outlook for the First Quarter and Full Year 2007

- Nokia expects industry mobile device volumes in the first quarter 2007 to reflect normal industry seasonality following a strong fourth quarter 2006 selling period.

- We expect Nokia's device market share in the first quarter 2007 to be at approximately the same level sequentially.

- We expect net sales in Nokia's Networks business group to experience a sequential seasonal decline in the first quarter 2007.

- Nokia expects industry mobile device volumes in 2007 to grow by up to 10% from the approximately 978 million units Nokia estimates for 2006.

- Nokia continues to expect the device industry to experience value growth in 2007, but expects some decline in industry ASPs, primarily reflecting the increasing impact of the emerging markets and competitive factors in general.

- Nokia continues to expect slight growth in the mobile and fixed infrastructure and related services market in euro terms in 2007.

- Nokia continues to target an increase in its market share in mobile devices in 2007.

Fourth Quarter 2006 Financial Highlights

(Comparisons are given to the fourth quarter 2005 results, unless otherwise indicated.)

Nokia Group

Nokia's fourth quarter 2006 net sales increased 13% to EUR 11.7 billion, compared to EUR 10.3 billion in the fourth quarter 2005. At constant currency, group net sales would have been up 12% year on year.

Nokia's fourth quarter 2006 operating profit increased 11% to EUR 1.5 billion (including a negative special item of EUR 39 million), compared to EUR 1.4 billion in the fourth quarter 2005 (including a negative special item of EUR 29 million). Nokia's fourth quarter 2006 operating margin was 13.0% (13.2%).

Operating cash flow for the fourth quarter 2006 was EUR 1.7 billion, compared to EUR 1.1 billion for the fourth quarter 2005. As of December 31, 2006, our net debt-to-equity ratio (gearing) was -68% (-77% as of December 31, 2005).

Mobile devices

The combined mobile device volume of our Mobile Phones, Multimedia and Enterprise Solutions business groups for the fourth quarter 2006 was a record 106 million units, up 19% sequentially and 26% year on year. Overall industry volumes for the fourth quarter 2006 reached an estimated 290 million units, up 19% sequentially and year on year.

In converged devices, according to Nokia estimates, the total industry volume reached approximately 24.6 million units for the fourth quarter 2006, compared to an estimated 17.8 million units in the fourth quarter 2005. Nokia's own converged device volumes for the fourth quarter 2006 grew to 11.1 million units, compared to 9.3 million units in the fourth quarter 2005. Almost 6 million Nokia Nseries multimedia computers were shipped in the fourth quarter.

The following chart sets out, by geographic area, Nokia's mobile device volumes for the periods indicated, and provides year on year and sequential growth rates.

Nokia Mobile

Device Volume by Geographic Area

YoY QoQ

Change Change

(million units) Q4 2006 Q4 2005 (%) Q3 2006 (%)

Europe 33.3 29.9 11.4 24.8 33.9

Middle East & Africa 15.5 10.3 50.5 13.3 16.5

China 14.6 9.5 53.7 13.8 5.8

Asia-Pacific 23.7 14.8 60.1 20.9 13.4

North America 5.9 9.8 -39.8 5.8 1.7

Latin America 12.5 9.4 33.0 9.9 26.3

Total 105.5 83.7 25.9 88.5 19.1

Nokia's estimated market share for the fourth quarter 2006 was 36%, flat sequentially and up from 34% in the fourth quarter 2005. On a sequential basis, Nokia gained market share in Europe. This gain was offset by market share declines in Latin America, North America and Asia-Pacific, while our market share in China and Middle East & Africa remained virtually unchanged sequentially. On a year on year basis, Nokia gained market share in every area except North America in the fourth quarter 2006.

The average selling price of Nokia's mobile devices declined in the fourth quarter 2006 to EUR 89, compared to EUR 93 in the third quarter 2006 and EUR 99 in the fourth quarter 2005. Sequentially, our ASP was impacted by a lower percentage of sales from our higher end products, specifically from our Multimedia business group, that more than offset the relatively stable ASPs in our entry-level product sales. The year on year decline in our ASP was driven primarily by the strong growth of the emerging markets, which have lower ASPs, and the growth of Nokia's market share in those markets, in addition to which certain higher-end products in our portfolio were not viewed as sufficiently competitive in various markets.

Mobile Phones: Fourth quarter 2006 net sales grew 14% to EUR 7.1 billion, compared to EUR 6.2 billion in the fourth quarter 2005. Net sales growth was driven by strong volume growth, especially in the entry level, and Nokia's ability to capture incremental volumes with its competitive entry-level product portfolio and strong logistics. Volume growth was partially off-set by declining ASPs. Net sales growth was strongest in Latin America, followed by Asia-Pacific, Middle East & Africa, Europe and China. Net sales declined significantly in North America, driven primarily by the continued lack of broad acceptance of certain products in our portfolio, and lower volumes in our CDMA business.

Mobile Phones fourth quarter 2006 operating profit increased 19% year on year to EUR 1 257 million, compared to EUR 1 060 million in the fourth quarter 2005, with an operating margin of 17.8% (17.1%). The strong operating profit growth was driven by strong net sales and effective operating expense control.

Multimedia: Fourth quarter 2006 net sales grew 6% to EUR 2 136 million, compared to EUR 2 024 million in the fourth quarter 2005. Multimedia continued to benefit from good sales of Nokia Nseries multimedia computers, but net sales were somewhat affected by the delay in ramp up of new products. Net sales growth was strongest in Latin America, followed by China, Asia-Pacific and Middle East & Africa. Net sales decreased in North America and Europe.

Multimedia fourth quarter 2006 operating profit grew 5% to EUR 326 million, compared to EUR 310 million in the fourth quarter 2005, with an operating margin of 15.3% (15.3%). Operating profit in the fourth quarter 2006 reflected the challenges noted above, but also benefited from effective operating expense control.

Enterprise Solutions: Fourth quarter 2006 net sales increased 99% to EUR 305 million, compared to EUR 153 million in the fourth quarter 2005. Net sales in the fourth quarter 2006 were driven primarily by a buoyant enterprise device market and Nokia's strong volume growth in its enterprise device business, especially from the Nokia Eseries. Net sales were up more than 100% in China, Latin America, North America, Europe and Middle East & Africa, but less than that in Asia-Pacific.

In the fourth quarter 2006, Enterprise Solutions had an operating loss of EUR 64 million, compared to an operating loss of EUR 136 million in the fourth quarter 2005. The fourth quarter 2005 operating loss included a EUR 29 million restructuring charge. The improved operating loss reflected the increased net sales and improved operating expense control.

Networks: Fourth quarter 2006 net sales increased 12% to EUR 2 184 million, compared to EUR 1 951 million in the fourth quarter 2005. Net sales growth was strongest in Middle East & Africa, followed by Asia-Pacific, China, Latin America and Europe. Net sales were down significantly in North America.

Networks fourth quarter 2006 operating profit decreased 52% to EUR 129 million (including the negative impact of EUR 39 million incremental costs related to Nokia Siemens Networks), compared to EUR 268 million in the fourth quarter 2005, with an operating margin of 5.9% (13.7%). Excluding the charge, the operating margin would have been 7.7% in the fourth quarter 2006. The decline in operating profit, excluding the incremental costs related to Nokia Siemens Networks expensed during the fourth quarter, primarily reflected pricing pressure and our efforts to gain market share, a greater proportion of sales from the emerging markets and a higher share of services sales.

Fourth Quarter 2006 Operating Highlights

Mobile Phones

Highlights include:

- The strengthening of Nokia's mid-range offering with the announcements of the Nokia 6300, a thin phone with appealing design; the Nokia 6290, a 3G model with a number of practical new features and Quick Cover access keys; and the Nokia 6086, a quad-band GSM and UMA-enabled camera phone.

- Nokia's announcement with T-Mobile of the sleek and powerful Nokia 6133 handset with a 1.3 megapixel camera and an integrated music player.

- The announcement of the latest addition to Nokia's family of "Active" phones with the Nokia 5500 Sport Music Edition.

- An addition to Nokia's entry portfolio with the announcement of the Nokia 2626, a colorful mobile phone designed for style-conscious consumers.

- The announcement of two CDMA entry models, the Nokia 1325 and Nokia 1265, which feature a number of desirable features such as handsfree speakers and voice recorders.

- An announcement from Nokia and Yahoo! on the extension of their partnership to offer Yahoo! branded services including Yahoo! Mail and Messenger on Nokia's wide range of mobile phones operating on the Series 40 platform.

Multimedia

Highlights include:

- The completion of Nokia's acquisitions of gate5 AG, a leading supplier of mapping, routing and navigation software and services; and Loudeye Corp, a global leader of digital music platforms and digital media distribution services.

- First sales of the Nokia Nseries music range: Nokia N70 and Nokia N73 music editions, and Nokia N91 8GB.

- Nokia and SIPphone's announcement of the availability of Gizmo VoIP Services for the Nokia N80 Internet Edition.

- Nokia's announcement of a DVB-H broadcast mobile TV pilot with Indian national television broadcaster Doordarshan.

Enterprise Solutions

Highlights include:

- The announcement of the Nokia for Business Channel Program designed to accelerate the widespread adoption of business mobility. Well over 600 companies had registered for the program by end of the fourth quarter.

- Strong growth in email licenses of Nokia Intellisync Mobile Suite, growing from 1 million to 1.2 million.

- The announcement of multiple new customers for Nokia Intellisync Mobile Suite, including EPUSH Software Solution Gmbh and the Associated Carrier Group (ACG).

- Nokia and TietoEnator's announcement of increased cooperation, with the launch of next-generation mobility services.

- The expansion of Nokia's security offerings with the launch of Nokia Intrusion Prevention with Sourcefire, offering advanced protection for the "dissolving" network perimeter.

Networks

Highlights include:

- Nokia's selection by Sprint Nextel US as a key infrastructure provider for its 4G WiMAX next generation mobility network.

- The announcement of a number of managed services deals including: a USD 400 million network expansion and Managed Services agreement with Bharti Airtel; a USD 230 million Managed Services contract with Vodafone Australia; and Managed Service contracts in Indonesia with Indosat and Hutchison Telecom Indonesia.

- The announcements of a GSM/GPRS/EDGE network expansion contract with Russia's MegaFon worth over EUR 320 million; a USD 110 million GSM/EDGE network expansion contract with DTAC in Thailand; a USD 100 million GSM/EDGE network and services contract with Thailand's AIS; expansion deals with China Mobile Zhejiang and Guangdong MCC; and network expansion and modernization contracts with Wataniya in Kuwait and AVEA in Turkey.

- Nokia won a 3-year frame agreement for 3G core and radio network to Ukraine's Ukrtelecom, with Nokia the sole equipment supplier to the operator.

- Nokia's selection to deploy WCDMA 3G for T-Mobile USA, for its modular Flexi WCDMA Base Station. Another Flexi deal was won with Wind in Italy.

- The expansion of Nokia's Flexi range with the announcement of the Nokia Flexi WiMAX and Flexi EDGE Base Stations.

- Nokia supported Australia's Optus, Poland's Polkomtel, Orange France, and Vodafone Australia and New Zealand with the launch of HSDPA trials or services in the quarter; and along with Singapore's M1 completed Southeast Asia's first HSUPA data call with a Nokia Flexi WCDMA Base Station.

Nokia in Fourth Quarter 2006

(International Financial Reporting Standards (IFRS) comparisons given to the fourth quarter 2005 results, unless otherwise indicated.)

Nokia's net sales increased 13% to EUR 11 701 million (EUR 10 333 million). Sales of Mobile Phones increased by 14% to EUR 7 076 million (EUR 6 217 million). Sales of Multimedia increased by 6% to EUR 2 136 million (EUR 2 024 million). Sales of Enterprise Solutions increased by 99% to EUR 305 million (EUR 153 million).

Sales of Networks increased by 12% to EUR 2 184 million (EUR 1 951 million).

Operating profit increased by 11% to EUR 1 519 million (EUR 1 368 million), representing an operating margin of 13.0% (13.2%). Operating profit in Mobile Phones increased 19% to EUR 1 257 million (EUR 1 060 million), representing an operating margin of 17.8% (17.1%). Operating profit in Multimedia increased by 5% to EUR 326 million (EUR 310 million), representing an operating margin of 15.3% (15.3%). Enterprise Solutions reported an operating loss of EUR 64 million (operating loss of EUR 136 million). Operating profit in

Networks decreased to EUR 129 million (EUR 268 million), representing an operating margin of 5.9% (13.7%). Common Group expenses totaled EUR 129 million (EUR 134 million).

Financial income was EUR 44 million (EUR 78 million). Profit before tax and minority interests was EUR 1 568 million (EUR 1 453 million). Net profit totaled EUR 1 273 million (EUR 1 073 million). Earnings per share increased to EUR 0.32 (basic) and to EUR 0.32 (diluted), compared to EUR 0.25 (basic) and EUR 0.25 (diluted) in the fourth quarter 2005.

Personnel

The average number of employees from January to December 2006 was 65 324. At December 31, 2006, Nokia employed a total of 68 483 people (58 874 people at December 31, 2005).

Shares and Share Capital

Nokia repurchased through its share repurchase plan a total of 45 350 000 shares on the Helsinki Stock

Exchange at an aggregate price of EUR 699 988 150, and an average price of EUR 15.44 per share, during the period from October 20, 2006 to December 19, 2006. The price paid was based on the market price at the time of repurchase. The shares were repurchased to be used for the purposes specified in the authorization held by the Board. The aggregate par value of the shares purchased was EUR 2 721 000, representing approximately 1.1% of the share capital of the company and of the total voting rights. These new holdings did not have any significant effect on the relative holdings of the other shareholders of the company nor on their voting power.

As announced on October 20, 2006, Nokia transferred a total of 222 042 Nokia shares held by it as settlement under the Nokia Restricted Share Plan 2003 to the Plan participants, personnel of Nokia Group. The aggregate par value of the shares transferred was EUR 13 322.52, representing approximately 0.005% of the share capital of the company and the total voting rights. The transfer did not have a significant effect on the relative holdings of the other shareholders of the company nor on their voting power.

On December 31, 2006, Nokia and its subsidiary companies owned 129 312 226 Nokia shares. The shares had an aggregate par value of EUR 7 758 733.56, representing approximately 3.2% of the share capital of the company and the total voting rights. The total number of shares at December 31, 2006 was 4 095 042 619. On December 31, 2006, Nokia's share capital was EUR 245 702 557.14.

It should be noted that certain statements herein which are not historical facts, including, without limitation, those regarding: A) the timing of product and solution deliveries; B) our ability to develop, implement and commercialize new products, 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) expected timing, scope and effects of the merger of Nokia's and Siemens' communications service provider businesses; and H) statements preceded by "believe," "expect," "anticipate," "foresee," "target," "estimate," "designed," "plans," "will" or similar expressions are forward-looking statements. Because these statements 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) the extent of the growth of the mobile communications industry, as well as the growth and profitability of the new market segments within that industry which we target; 2) the availability of new products and services by network operators and other market participants; 3) our ability to identify key market trends and to respond timely and successfully to the needs of our customers; 4) 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; 5) competitiveness of our product portfolio; 6) timely and successful commercialization of new advanced products and solutions; 7) price erosion and cost management; 8) the intensity of competition in the mobile communications industry and our ability to maintain or improve our market position and respond to changes in the competitive landscape; 9) our ability to manage efficiently our manufacturing and logistics, as well as to ensure the quality, safety, security and timely delivery of our products and solutions; 10) inventory management risks resulting from shifts in market demand; 11) our ability to source quality components without interruption and at acceptable prices; 12) our success in collaboration arrangements relating to development of technologies or new products and solutions; 13) the success, financial condition and performance of our collaboration partners, suppliers and customers; 14) any disruption to information technology systems and networks that our operations rely on; 15) our ability to protect the complex technologies that 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 and solution offerings; 16) general economic conditions globally and, in particular, economic or political turmoil in emerging market countries where we do business; 17) developments under large, multi-year contracts or in relation to major customers; 18) 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; 19) the management of our customer financing exposure; 20) our ability to recruit, retain and develop appropriately skilled employees; 21) the impact of changes in government policies, laws or regulations; and 22) satisfaction of the conditions to the merger of Nokia's and Siemens' communications service provider businesses, including achievement of agreement between Nokia and Siemens on the results and consequences of a Siemens compliance review, and closing of transaction, and Nokia's and Siemens' ability to successfully integrate the operations and employees of their respective businesses; as well as 23) the risk factors specified on pages 12 - 22 of the company's annual report on Form 20-F for the year ended December 31, 2005 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 plans to report Q1 2007 results on April 19, 2007.

- The Annual General Meeting will be held on May 3, 2007.

http://www.nokia.com

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