​Nokia results: N1 reception 'remarkably favourable', HERE maps sales growing

Nokia is upbeat about its prospects of reinventing itself through its smaller units in mapping and intellectual property.
Written by Liam Tung, Contributing Writer

Nokia says its N1 tablet got a "remarkably favourable reception" when it went on sale recently, while its HERE mapping business and main network unit both saw year-on-year sales growth.

Nokia today released its full year and fourth-quarter results for 2014, showing how its three business units - Networks, Technologies, and HERE - have fared recently.

Overall, Nokia Technologies saw year-on-year sales for the fourth quarter rise from €121m to €149m, primarily due to licensing revenue from Microsoft. Full-year revenues grew nine percent from €529m in 2013 to €578m in 2014.

Nokia Technologies, the smallest of Nokia's three core units, was responsible for the company's recent re-entry into the hardware market with the release of the N1 tablet.

Nokia announced the N1 late last year, only months after agreeing not to manufacture smartphones as part of the sale terms of its devices business to Microsoft in April. OEM partner Foxconn announced earlier this month that it had sold 20,000 units in just four minutes, though Nokia has declined to discuss the claimed sales figures.

"The early reception to the Nokia N1 tablet has been remarkably favourable, showing the ongoing power of the Nokia brand and the long-term potential of our brand licensing business," said Nokia CEO Rajeev Suri.

Nokia doesn't make the tablet itself: it has created a reference design for the hardware, which it licenses to Foxconn. The contract manufacturer is responsible for building, marketing, selling, and supporting the device.

Elsewhere, Nokia's results revealed that Nokia Technologies is renewing its focus on licensing more generally. The unit is spending up on what it believes will be "significant long-term growth opportunities" related to licensing patents to former rivals such as HTC and Samsung, as well as licensing the IP behind products like the N1.

Nokia's HERE mapping business, which increasingly operates as its own brand, also saw 15 percent year-on-year growth in net sales, up from €225m last year to €292m in the most recent quarter, thanks mostly to increased revenue from automotive clients but also from Microsoft, which uses HERE maps on many of its smartphones. The maps unit now lists BMW, Daimler, and Toyota as well as Microsoft, Oracle, SAP, and Yahoo among its "platform service" customers.

Nokia raised HERE's expected full-year non-IFRS operating margin for 2015 to between seven and 12 percent from between five and 10 percent. Non-IFRS exclusions for HERE in the past two quarters included a €1.27bn goodwill impairment charge in Q3, as well as a €30m charge in Q4 due to a cost reduction program.

The lion's share of Nokia's revenues is generated by Nokia Networks, which saw year-on-year net sales for the fourth quarter rise eight percent from €3.1bn to €3.4bn, mostly due to a sharp rise in LTE deployments in North America. The business unit's net sales grew in Europe by four percent year on year.

Nokia's overall net sales of €3.8bn for the fourth quarter were up nine percent from a year ago and, according to Bloomberg, just beat analysts' average estimate of €3.74bn.

As it's previously indicated, Nokia said it expects its arbitration with Samsung over patents to wrap up this year.

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