Matt Shimao - Head, IR Stephen Elop - President and CEO Timo Ihamuotila - CFO

Gareth Jenkins - UBS Tim Boddy - Goldman Sachs Tim Long - Bank of Montreal Andrew Griffin - BofA Merrill Lynch Mike Walkley - Canaccord Genuity Kulbinder Garcha - Credit Suisse Mark Sue - RBC Capital Markets Ittai Kidron - Oppenheimer Jeff Kvaal - Barclays Pierre Ferragu - Bernstein Stuart Jeffrey - Nomura Zahid Hussein - Citigroup Alexandre Peterc - Exane BNP

At this time, I would like to welcome everyone to the Nokia first quarter 2011 earnings results conference call. (Operator Instructions) I will now turn the call over to Mr. Matt Shimao, Head of Investor Relations.

Ladies and gentlemen, welcome to Nokia's first quarter 2011 conference call. I am Matt Shimao, Head of Nokia Investor Relations; Stephen Elop, President and CEO of Nokia; and Timo Ihamuotila, CFO of Nokia are here in Espoo with me today. During this 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 we currently expect. 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 through 32 of our 2010 20-F and in our quarterly results press release issued today. Please note that our results disclosed today include non-IFRS results information in addition to the reported results information, our complete interim report with tables available on our website includes a detailed explanation of the content of the non-IFRS information and a reconciliation between the non-IFRS and the reported information. With that, Stephen, over to you.

Thank you, Matt. Q1 of 2011 has been a remarkable quarter for Nokia. It was during this quarter that we articulated the serious nature of Nokia's challenges in a manner that served as a quality arms for our employees. We also constructed and announced Nokia's new strategy for the years ahead. And now, we have shifted our purpose from defining our new strategy to taking the first important steps to realization. During this time the fiercely competitive environment continue to increase and affect our business. Yet with our new strategy, we have more clarity around future direction and a stronger recognition for the work we must accomplish in order to improve our financial results. In Q1, we took immediate steps to mobilize the company around three new business objectives, which are, regaining our leadership in smart devices with Microsoft as a partner; growing our leadership in mobile phones, as we bring the internet to the next billion; and also investing in future disruptions. To accomplish these objectives, we are focusing on key differentiators, including signature user experiences, iconic hardware, differentiated software, and supporting an eco-system of services that consumers' demand. We are also taking advantage of our global reach, powerful supply networks and the strength of our brand. With all of this transformation, we also recognized that we must change the way we work in order to achieve our new objectives. Today, I am going to structure my remarks around the current situation and the steps we are taking relative to the different pillars of our new strategy. First, we are focused on improving the product competitiveness of our smart devices. This begins with being laser-focused on our Symbian results, as we commence our transition to the Windows Phone platform. While competitive challenges remain and the trends that precipitated our new strategy persist, we saw no immediate evidence of a sudden change in the consumer perception around Symbian, as a result of our announcements on February 11. During the quarter, we took deliberate action in an effort to support Symbian sales during the transition to the Windows Phone platform, including work, to enhance the ongoing competitiveness of the Symbian range of products. For example, we recently announced the Nokia E6 and Nokia X7, two products with the new Symbian Anna software. The team has renewed the user experience with fresh icons of faster browser and enterprise-grade security. Consumers, who purchased the Nokia N8, E7, C7 and the C601 also will be able to upgrade the Symbian Anna software. The combination of these new devices are future products and the ongoing pattern of software enhancements, gives us increased confidence that we can engage both existing and new Symbian customers, during our transition. Additionally, we started shifting our smartphone business from Symbian to the Windows Phone platform, through our work with Microsoft and various industry partners. As we said previously, we will not announce specific ship dates until we are quite close to the product launch. But our confidence to deliver products with improved quality is growing everyday. It was encouraging to show-off our early work on the Windows Phone platform to our sales and marketing team, during our annual sales and marketing meeting last month. But most notably for our smart devices effort, today we signed the definitive agreement between Nokia and Microsoft. While this partnership is significant in size and scope, we are able to finalize it earlier, than originally anticipated. We thought it would be helpful to characterize the nature of this agreement, as this is a key to our future strategy. At the highest level, we believe this is a win-win partnership. It is the complementary nature of our assets and the overall competitiveness of that combined offering that is the foundation of our relationship. Nokia will adopt the Windows Phone platform as our principle smarphone strategy and we are innovating and differentiating on top of the platform in a variety of areas to drive the future of the Windows Phone eco-system. We believe the structure of the agreement is balanced and reflects each of our contributions to the partnership. I intend to think of the agreement along four broad areas. The first aspect of the relationship, something which makes the partnership truly unique is the combination of assets we both bring to the eco-system. For example, Nokia will deliver mapping navigation and certain location-based services to the Windows Phone eco-system. Additionally, we will bring our global scale, the extensive supply network and strength of our brand. Microsoft will provide search services across the Nokia smartphone portfolio as well as contributing strength in productivity, advertising, gaming, social media and a variety of other services. The combination of navigation with advertising and search will enable better monetization of Nokia's navigation assets. We also gained completely new forms of advertising revenue, which is in area where we have not previously participated. Together with Microsoft, we will work on develop our outreach and application sourcing for the creation of new local and global applications. Further, Windows Phone developer registration will be free for all Nokia developers. As partners, we will open a new Nokia branded global-application store that leverages the Windows marketplace infrastructure. And we will contribute our expertise and operator billing, to ensure that participants in the Windows Phone eco-system can take advantage of our billing agreements with 112 operators in 36 markets. The second aspect of the agreement is that we will pay a royalty to Microsoft for the Windows Phone platform, which will commence when we ship the first devices based on the Windows Phone platform. We believe that these royalties over the life of the agreement are very competitive for us. They reflect the large volumes that we expect to ship and a variety of other considerations related to engineering work to which we are jointly committed. In return, Microsoft will deliver the Windows Phone platform to us and we are able to reduce our operating expenses significantly, a topic that I will cover latter, in my remarks. The third aspect of the relationship further reflects the growing importance of intellectual property and we created mechanisms for exchanging intellectual property rights. As part of this, Nokia will receive substantial payments under the agreement. And fourth, in recognition of the unique nature of this partnership and Nokia's substantial commitment to the Windows Phone platform, we will receive payments from Microsoft, totaling billions of dollars. In addition to closing the deal, hundreds of people already are engaging on joint engineering efforts, collaborating on a portfolio of new Nokia devices, porting key applications and services to operate on the Windows Phone platform and reaching out to third-party application developers. Overall, I am encouraged by our early progress with Microsoft. Let's now move to the second pillar of our strategy, which is our mobile phones business. We launched the Nokia C3 QWERTY device last year and in Q1 the lower price Nokia X201 QWERTY ramped-up nicely. In total, we shipped more than 8 million C3 and X201 devices in Q1. However, the competition in the mobile phone space remains fierce and we find ourselves at an important point of product-family transition. In Q1, one of the leading sources of pressure on our mobile phones business has been the lack of dual-SIM products. We expect this pressure to further increase in Q2. However, we plan to ship the Nokia C2 dual-SIM device by the end of Q2 2011, to begin to address the gap in our portfolio. The C2 will be the first of a range of dual-SIM devices, designed to significantly increase the competitiveness of our mobile phones offering through the balance of the year. I'll now move to our third pillar. We are making progress with our objective of investing in future disruptions. This is not an area on which we will provide regular operational updates. However, we have begun the process of pursuing the next generation of platforms, devices and user experiences that we believe will define some of the future disruptions in our market. As we navigate through this transition, we are allocating key talent and resources against differentiators, which I have referenced before as our unpolished gems. For example, we are continuing to make progress with services. The Ovi Store is up to 5 million downloads per day with more than 40,000 applications. This is nearly an eightfold growth in applications in one year. Also, during quarter that saw the heartbreaking tragedy in Japan. Our world-class supply chain was put to the test. We quickly determined our exposure points with both our direct suppliers and with suppliers deep in the supply chain. As a result, we are able to immediate steps in an effort to secure supply. We mitigated much, although not all of our initially assessed Q2 2011 exposure related to the earthquake, tsunami and the ongoing nuclear incident in Japan. Therefore, our Q2 2011 guidance reflects in part the turmoil triggered by the Japanese disasters. Timo will take you through this in more detail in a few moments. Finally, I wanted to talk briefly about changes to the way we work. We need unquestionably accelerate our pace, which means changing how we operate. While we are still in the early days, we are undergoing changes to adjust our workforce to a challenger mindset. Over the last few weeks we have implemented new organizational efforts including being very deliberate in defining the behaviors, the attitudes and the environment that we believe must be present to drive great results. Additionally, we are shifting to more localized empowerment, so the teams in the field, who are closest to our partners and customers, can respond to local market conditions more quickly. And we are increasing accountability across the organization by clarifying senior leadership roles, being unambiguous about decision-making rights and designing measures to tie compensation incentives more closely to performance metrics. The changes I have described are designed to bring a corresponding substantial reduction in our operating expenses. We target to reduce our Devices & Services' non-IFRS operating expenses by €1 billion for the full year 2013, compared to the full year 2010 Devices & Services' non-IFRS operating expenses of €5.65 billion. Next week, we will be ready to commence the detailed consultation processes with their employees. We will provide more details about the impact on employment, the transition process for employees, new opportunities for employment and unique programs that we will put in place to reflect the importance that we attribute to our social responsibility. It is important to note that because new programs will be ramped-up as other efforts are transitioned, generally all employees can stay on the payroll through the end of the year. Additionally, it is important to highlight that the targeted reduction in operating expenses comes from a variety of different sources, not only from a reduction and the number of employees. These other areas include normal attrition, a reduction in the use of outsource professionals, reductions in facility costs, improvements in efficiencies and a variety of other topics. Speculation on the exact numbers and timing of reductions is therefore best postponed until we have discussed and developed the initial plans with employee representatives through the official consultation process. In summary, we are making some very difficult decisions, because our business is faced with a challenging situation. However, with our new strategy in place, we are able to remove elements of ambiguity. Today, I provided more clarity in the areas where we have answers. For example, we intend to reduce our operating expenditures by €1 billion. We have signed the definitive agreement with Microsoft. And we have confirmed the planned timing of our dual-SIM offering. But we have not removed all of the uncertainty around our new strategy, we are taking measures to provide as much visibility as possible, during each step of this journey. In conclusion, we indeed all of us at Nokia have shifted from a mode of developing our strategy to want to putting our strategy into action. With every day that passes, we gain new clarity, so we can deliver results. And let me be clear, at Nokia, results matter. Results means building inspired teams that deliver great products to consumers, which ultimately drives superior financial results. With that, I'll now turn it over to Timo to provide additional details on the Q1, 2011 financial results.

Thank you, Stephen. According to our preliminary estimates, in terms of unit volumes, the overall handset market in Q1 declined 7% sequentially, but grew 16% year-over-year. On a sequential basis, the industry showed relatively better performance in emerging markets compared to developed markets, consistent with typical Q1 seasonality. On a year-over-year basis, the industry saw solid growth continue in both developed markets and emerging markets. Mobile devices are a modern necessity and the fundamental growth characteristics of our industry remain healthy. On a reported basis, Devices & Services net sales of €7.1 billion were down 17% sequentially and up 6% year-over-year. The sequential decrease in net sales reflected lower ASPs as well as lower device volumes in most regions. In Q1, converged mobile devices delivered relatively good performance led by our new products including the Nokia N8, Nokia C7, Nokia C5 and Nokia E7, as well as the attractive price Nokia 5230 touch screen and Nokia E63 QWERTY devices. Mobile phones in Q1 was led by continued strong performance of the Nokia C3 Qwerty device. The top five devices in mobile phones blanketed a broad ASP range from €17 to €99. In Q1, services net sales were €211 million, up 5% sequentially and 43% year-over-year. Billings were €338 million in Q1, down 4% sequentially and up 48% year-over-year. In Q1 our active services users grew of 280 million from 187 million at the end of Q4. Beginning Q2, we will no longer disclose services net sales, billings and active users. Rather we will begin disclosing additional P&L information by business unit down to the operating contribution line. This means that within Devices & Services, we will provide disclosure for net sales down through the operating profit contribution line for our two newly created business units as of April 1, 2011, Smart Devices and Mobile Phones. We believe that providing this new incremental disclosure is the best way to provide investors with transparency to key factors and trends impacting our Devices & Services business Our overall device volumes were down 12% sequentially and up 1% year-over-year. The sequential decline was primarily due to lower seasonal demand for our devices and the intense competitive environment offset to some extent by improved component availability. Our device volumes in Q1 were not significantly impacted by the devastation caused by the earthquake and tsunami in Japan. Due to the tremendous work done by our world-class supply chain team, we have been able to mitigate most of the potential exposure. But we currently expect some impact to our mobile devices volumes in Q2 and Q3 2011. Our process to assess our potential exposures has been rigorous and extensive. It is important to understand that in Japan there are often complex interdependencies in the supply chain. Thus it is not good enough to validate continuity of supply from your direct suppliers only. You'll have to go several layers deeper and determine the situation of your supplier's suppliers. Through this work we have identified exposures and mitigating actions. In Q2, we expect supply constraints related to particular devices, but on an overall basis we have planned to shift production to devices that do not fail supply constrains. In Q3, we believe we will see some impact as well as disruptions deeper in the supply chain begin to surface. However, we will work hard to try to mitigate our exposure. We ended Q1 with channel inventory, just slightly above our normal range of four to six weeks. China has been a bit more willing to stock higher levels of inventory, as there is potential for industry supply disruption in Q2 and Q3. For Q2, our guidance incorporates and expectation that we will work down our channel inventory and in the quarter within our normal four to six-week range. Devices & Services ASP in Q1 was €65 including services revenue down €4 or 5% sequentially, and up €3 or 6% year-over-year. Our sequential ASP decrease was primarily driven by general price erosion and increased proportion of lower price converged mobile devices. Converged mobile devices, representing a smaller proportion of our overall mobile device sales and for an exchange hedging, offset to some extent by the appreciation of certain currencies against the euro, and an increased proportion of higher-price mobile phones. Due to the industry-wide shortage of certain components since Q2 of 2010, we believe the industry have experienced a relatively benign pricing environment, which supported our ASP development particularly during the second half of 2010. We expect our price erosion to accelerate in Q2 due to competitive industry dynamics and our planned tactical pricing actions. In Q1, our converged mobile devices ASP was €147, down €9 million or 6% sequentially, and down €8 or 5% year-over-year. On a sequential basis, the decline was primarily driven by general price erosion and an increase in the proportion of lower priced converged mobile devices. In Q1, our mobile phones ASP was €42, down €1 or 2% sequentially, and up €3 or 9% year-over-year. On a sequential basis, the decline was mainly driven by general price erosion offset to some extent by an increase in the proportion of higher-priced mobile phones. Device & Services non-IFRS gross margin in Q1 was 29.1%, down 10 basis points sequentially. The slight gross margin decline was primarily due to general price erosion being higher than cost erosion. Offset to large extent by a smaller negative one quarter impact from foreign exchange hedging as well as an increased proportion of sales of higher margin mobile devices. At the present time, we expect a 40 basis points negative impact in Q2 related to hedging activities, assuming static foreign currency rates at the end of Q1 levels, but this could change due to intra-quarter fluctuation in rates. In Q1, Devices & Services non-IFRS OpEx was €1.4 billion, down approximately €125 million on a sequential basis, but up approximately 180 basis points as a percentage of net sales. Devices & Services non-IFRS operating margin was 8.9% in Q1, down 150 basis points sequentially, largely driven by lower operating leverage. And now on to Nokia Siemens networks and NAVTEQ. In Q1, NSN delivered another solid quarter. Reported net sales were €3.2 billion, a 20% decline sequentially, primarily driven by typically industry seasonality and 17% year-over-year increase. In Q1, NSN recorded a third successive quarter of year-over-year sales growth, driven by growth in the GSM, 3G and managed services business. On a regional basis, NSN's net sales declined sequentially, due to negative seasonality in most regions, but experienced strong growth sequentially in Asia-Pacific driven by a major customer build-out in Japan. Non-IFRS gross margin was 26.9%, up 50 basis points sequentially. The increase reflect an improvement in project execution and more favorably regional mix in Q1, more than offset the negative leverage from lower sales. On a year-over-year basis, non-IFRS gross margin was down from 31.4%, reflecting the continued top rising environment in the infrastructure market, particularly in relation to modernization projects. In Q1, non-IFRS operating margin was 0.1%, down 360 basis points sequentially and 50 basis points year-over-year. The sequential decline was primarily driven by negative operating leverage. NSN's operating expenses were down 3% sequentially, reflecting industry seasonality and up 1% year-over-year. NSN continues to target reducing its non-IFRS annualized operating expenses and production overheads by €500 million by the end of 2011 compared to the end of 2009. NSN's contribution to the Nokia's cash flow from operations was negative €72 million in Q1. At the end of Q1, NSN’s contribution to Nokia’s gross cash was €797 million and NSN’s contribution to Nokia’s net cash was negative €362 million. Having prioritized progress in mobile broadband, managed services and customer experience management in 2011, NSN has made a strong start to the year with good momentum in all areas. Overall, we continue to be confident that NSN is executing its turnaround very well. They have demonstrated their ability to innovate and capture share. Last week NSN and Motorola Solutions announced that they had agreed a new price for the acquisition of networks assets of US$975 million. We are now able to communicate that all necessary regulatory approvals have been received including unconditional approval from the Ministry of Commerce in China, and NSN aims to close the transaction on April 29, 2011. Then on NAVTEQ. In Q1, NAVTEQ delivered strong year-over-year growth in the seasonally weaker first quarter. Reported net sales in Q1 were €232 million, down 25% sequentially and up 23% year-over-year. On a sequential basis, NAVTEQ declined in reported net sales was mainly driven by seasonally lower sales in all business segments. Non-IFRS gross margin was 84.1%, down 360 basis points sequentially, due to a higher proportion of sales to lower margin automotive and wireless customers in Q1. Non-IFRS operating margin was 23.3%, down 910 basis points sequentially, primarily driven by lower net sales and gross margin offset to some extent by lower OpEx. And as I highlighted last quarter as well, to help you understand NAVTEQ’s contributions to the overall P&L in Nokia, on Page 22, of the complete interim report with tables. We provide two tables that show elimination of inter-segment net sales and elimination of operating profits. Then turning back to Nokia, as a whole. Nokia’s financial income and expense in Q1 was an expense of €32 million compared to an expense of €65 million in Q4. And then in open taxes, Nokia taxes continued to be unfavorably impacted by Nokia Siemens Networks taxes. No tax benefits are recognized for certain Nokia Siemens Networks differed tax items. In Q1, this was partially offset by favorable profit mix, both in Devices & Services and in Nokia Siemens Networks taxes. If Nokia's estimated long-term tax rate of 26% had been applied, non-IFRS Nokia EPS would have been approximately €0.004 higher in Q1, 2011. Going forward, I would continue to recommend that you model taxes separately for each of our reportable segments. To do this, first you need to allocate financial income and expenses, allocate approximately two-thirds of the expense to NSN and the remaining one-third of the expense to Devices & Services. Second, use a tax expense of approximately €50 million per quarter for NSN, while using the long-term tax rate of 26% for both Devices & Services and NAVTEQ. After NSN achieves a sufficient level of profitability, then you can go back to using the overall long-term tax rate of 26% for the whole company. In Q1, our operating cash flow was negative €173 million compared to €2.4 billion positive in Q4. Sequentially, the decrease in operating cash flow was driven by negative networking capital impact as well as lower underlying profitability. Additionally, on a sequential basis, operating cash flow was negatively impacted due to the timing of certain customer payments and value-added tax refunds. As I mentioned last quarter, cash flow in the fourth quarter of 2010 benefited by approximately €600 million due to timing. Finally, in the first quarter 2011, we experienced cash outflows related to foreign exchange hedging activities, both operative as well as balance sheet, and this also led to sequential declines in operating cash flow. We ended Q1 with total cash and other liquid assets of €11.1 billion and net cash of €6.4 billion. And finally, a summary of our Q2 guidance. We target Devices & Services net sales to be between €6.1 billion and €6.6 billion, and we target Nokia Siemens Networks net sales to be between €3.2 billion and €3.5 billion. We target Devices & Services non-IFRS operating margin to be between 6% and 9%, and we target NSN non-IFRS operating margin to be between 1% and 4%. The outlook for Devices & Services net sales and non-IFRS operating margin for the second quarter 2011 is based on our expectations regarding factors, including a receipt of approximately €150 million of royalty income related to earlier periods, competitive industry dynamics and our planned tactical pricing actions, greater impact in Q2 than in Q1 related to the tragic events in Japan, particularly relating to component supply visibility for particular devices, our portfolio gap in dual-SIM devices which we expect to have a bigger impact in Q2 relative to Q1, and lower contribution from new products in Q2 compared to Q1 as the majority of our new products are planned to start shipping in the second half of the year. We target Devices & Services net sales in Q3 to be at approximately the same level as in Q2, and we expect Devices & Services net sales in Q4 to be seasonally higher compared to Q3. As Stephen mentioned, we target to shape the Nokia C2 Dual Sim device by the end of Q2. This would be the first range of Dual Sim devices designed to increase our competitiveness in number of markets through the balance of the year. In addition, we plan to start shipping a renewed family of Symbian smartphones during the second half of 2011, building on the UIM software enhancements from the Symbian Anna release. On a full year basis, 2011, we expect devices and services non-IFRS operating margin to be between 6% and 9%. This is a tough time for the company, but we have a clear new direction and we are moving swiftly to improve our execution. As we said at the investor event in February, after the transition period with target devices and services to grow faster than the market and to deliver non-IFRS operating margin of 10% or more. Our NSN guidance does not include any amounts related to the planned NSNs acquisition of certain network infrastructure assets from Motorola Solutions. For your models, the €o dollar exchange rate we are using at the start of Q2 is € 1.418. And with that I will hand over to Matt for Q&A. And before we start with the Q&A, just one correction; there were two numbers transposed; the devices and services non-IFRS operating margin was 9.8% in Q1, down 150 basis points sequentially.

Thank you, Timo and Stephen. For the Q&A question, please limit yourself to one question only. Operator, please go ahead.

(Operator Instructions) And your first question will come from the line of Gareth Jenkins from UBS. Gareth Jenkins - UBS: On the Microsoft deal, I just wondered if you'd give us the timing and frequency of the billions of dollars of payments that you're expecting, and do you have to allocate that to the Microsoft ecosystem, or can you allocate it to anything that you so choose. And then just secondly, on the Finnish elections, I just wondered if they'll have any bearing on your headcount reductions and have union agreements been reached?

First of all, with respect to the specific timing and frequency of the payments, we are not disclosing this. Although, it will become apparent as the devices begin to ship, as the financial results for those quarters are posted, it will become quite apparent because they'll be visible within our income statement. With respect to the Finnish elections, the company is operated for the benefit of its shareholders, its employees and all of our other stakeholders, so we do not see a correlation between the Finnish elections or any of our specific plans to operate the company. As it relates to the relationships with union representatives and specifically employee representatives, those conversations begin in earnest next week. And so, those conversations begin and then we work through those. So there isn’t an agreement or something that has happened that triggers them. You actually begin those and go through a process over a relatively short period of time to work through those conversations.

Your next question is from the line of Tim Boddy with Goldman Sachs. Tim Boddy - Goldman Sachs: Just a clarification on the restructuring goal of a €1 billion. Does that include potential savings which result from actually marketing subsidy or cash from Microsoft, or would those payments from Microsoft be over and above the €1 billion? And then my question is really just around your time to market. How long is it today? Why is it taking so long to bring out Microsoft products relative to the pace at which some of your peers move to android? And once you're up and running on Microsoft, what do you think your time to market will be in future?

Okay, I’ll try and take a couple of those. With respect to the €1 billion savings, that is pure savings within our current OpEx structure. It is in no way related to any payments coming from Microsoft; that’s pure and true OpEx savings. I realize also, I didn’t relate it to the Microsoft payments. Didn’t answer part of the question that was first answered in terms of our liberty to apply or take advantage of the financial benefits arising from the deal. And that is at our discretion in terms of how that's done; it's not specific or specified. But clearly, we are interested in building the ecosystem driving our business and things like that. With respect to the Microsoft productization and the schedules that we have, we are very happy with the fact that our time to market and our ability to produce devices, taking advantage of the Windows Phone platform will be substantially faster than anything we’ve been able to do with other platforms. And so we look at it as something that's significantly increasing our time to market as it relates to any device platforms. We’ve already seeing the impact of that. I reference the ability to show off some of the Windows phone work at our recent sales and marketing meeting. We’re making great progress. So the pace of activity there is quite good and we’re happy with that.

Just to be clear here, we have not disclosed any specific accounting treatments regarding the Microsoft agreement. So what we are saying is that the overall agreement will become generally visible in our income statements when we move forward with the co-operation with the Microsoft.

Your next question comes from the line of Tim Long with Bank of Montreal. Tim Long - Bank of Montreal: Stephen, if I could just follow up on one of your comments. You said there was no consumer change in behavior or attitude about Symbian. Could you just talk to us a little bit about what you're hearing from distributors and service providers? In other words, is there a little bit more hesitance on some of the go-to-market partners than what you might see from the consumers directly, and any impact there, would be great.

I think the conversations with operators and distributors and various partners, they tend to focus on a couple of things; first of all, the competitiveness of the products. And obviously, they have visibility into future products, new software versions and things that are not yet visible in the market, and as we continue to invest in the competitiveness of Symbian, they see the results of that and athey are encouraged by that. And of course they are encouraged by the consumer response that they are seeing to some of the latest work that we have done. So we’re seeing an appropriate level of engagement and so forth. Now, at the same time I am going to balance my remarks. It is the case that we made a significant strategic set of decisions because of trends that we see in terms of market share and so forth. And so, those trends are still evidence in the numbers being reported. There are those challenges, and yet there isn't something discontinuous in terms of the consumer perception of our products that we have observed. As well, what we’re doing very carefully is to make sure that we are applying what we refer to as tactical pricing actions in various markets. Perhaps it's because of the competitiveness in the environments in which we are operating. But it's also important to note that roughly, I don’t have the precise number off the top of my head, but roughly 60% of our business is accomplished through open distribution where operators and others tend to have far less influence over pricing, and it's actually the ultimate consumer interest and demand that drives the success of our products, essentially more a pure market condition, which helps us a great deal in terms of moving through all of this. I think, as we said, the consumer perception is something that generally reflects where we are with the competitiveness of our products, which is strong in some markets and obviously weaker in other markets as well.

Your next question comes from the line of Andrew Griffin with BofA Merrill Lynch. Andrew Griffin - BofA Merrill Lynch: Just wondered about the dividends next year; I know it's a bit early to be forecasting it, but with consensus expecting earnings to be down and you going through this product transition, I wondered if you could give, particularly investors who are focused on your dividend an idea of how you'll think about whether or not to maintain it. You already have more net cash than you need, but what are the puts and takes in terms of the dividend decision for this year?

Well, I mean it’s early in the year first of all. And what we can say here is that the dividend remains our primary mechanism to distribute earnings to our shareholders. And despite the fact that the Board has proposed a dividend of 4% for three years in a row, I cannot say that you can assume 4% as a minimum going forward. Of course this is based on variety of factors, and we consider totality of the situation, not just one or two factors when we then from our side propose something to the Board, which is again, then proposed to the AGM. Andrew Griffin - BofA Merrill Lynch: Do you have a particular level of net cash that you see a minimum though? I'm just wondering whether you'd be willing to reduce your net cash level during this period of transition in order to maintain the dividend.

I don't think I have anything to add to the answer what I have just said. We feel that the cash levels, net cash what we have at the moment are sufficient for our current business position, clearly as we are expecting to pay that about €1.5 billion dividend now. In some weeks' time, net cash level will go down.

Your next question is from the line of Mike Walkley with Canaccord Genuity. Mike Walkley - Canaccord Genuity: With the supply situation in Japan, I was hoping you could update us on some conversations with your customers. Do you believe carriers may have built some excess handset inventory and attempt to navigate supply issues, which might have had a positive impact on March sales and maybe a slightly more negative impact on June? And also, just given your strong distribution and the logistics team, can you elaborate on the interdependency talked about in Japan, and why you think that supply could be even more constrained maybe exiting Q2 into Q3 timeframe?

I'll take the first part of that. As it relates to the supply chain and so forth, the thing that we observe more than anything, I think everyone intrinsically understood but needed to see firsthand is the degree of interdependencies. It is the case that you may have a broad perspective of your supply chain, and obviously we have a very deep understanding of it. But as was reported early on in the disaster sequence where, for example certain chemicals that are used in virtually all processes related to wafers all of the sudden were in questionable supply because of factory closings and what have you. So those are the types of interdependencies that you don't initially think of or would anticipate in a situation like this. Now at the same time, there is a tremendous amount of creativity as it relates to finding alternative sources, in terms of everyone chipping in to get factories up and running or whatever is necessary, right across the industry because it affects everybody. With respect to the Q1 to Q2 to Q3 dynamics, Timo noted in his comments that inventory was just a bit higher than normal coming out of Q1, and our intent to correct that going into Q2, and as we came to understand that and saw that pattern forming, there was certainly an aspect of that of people not understanding where the supply shortages would hit, and therefore, taking some precautions in terms of perhaps building a little bit of extra inventory. And so you see that reflected in the Q1 numbers, but it's something as we said, we expect to see corrected in Q2. In your question, I think you characterized the transition into Q3 as perhaps more difficult or something like that related to supply. We're anticipating that the supply situation in Japan becomes more visible, more concrete, less of an issue as we move into Q3. Still some impact, but Q2 was the most difficult that we anticipate from a supply impact, just to put that in perspective.

Your next question comes from the line of Kulbinder Garcha with Credit Suisse. Kulbinder Garcha - Credit Suisse: I just want a couple of clarifications. Stephen, on the point of just the billions of payment on both IPR from Microsoft as well as the €1 billion of savings, this still only results in a business there's a long term 10% operating margin. That does strike me as very conservative, unless you are expecting the top-line to be much lower or gross margins to be much lower. I am trying to balance all these comments, so with a long-term 10% margin. And then for Timo, just one clarification, you've got the €150 million of royalty payment this quarter in your guidance. Is there anything you are assuming in full year margin guidance for further royalty payment in Q3 and Q4 so that the underlying margin would actually be potentially lower?

With respect to the guidance as it relates to the operating margin, I think the way I would respond to that is by commenting specifically on what our guidance is. We say 10% or more; seems the number of people, because of the transition and various ambiguity and so forth are focused on the 10%. Obviously, we're (incented) here to drive the more part of that. And so, without characterizing it as conservative or not conservative, we wanted to give a clear indication, at a minimum where we expect it to perform. But certainly the encouragement that we are all receiving from our shareholders, our Board and everybody else is to do better than that. I'd also point out that with respect to the payments and so forth, it's a long-term contract with Microsoft. Those payments are spread over some number of years associated with that. And so, without getting into the specifics, again the dynamics of the Microsoft contract will become clear. And I'll let Timo take the second question.

The second question was regarding gross margin dynamics, and this one of royalty. We are expecting to receive, during Q2, and we will back then, if I understood correctly continue to the following quarters. So if we can like, first of all, say that this one of royalties we have felt, we have called them earlier in putting forth, and to call it now, given that it is an important part of our Q2 expectations, we are not saying or expecting that this kind of royalty dynamic would continue to the following quarters as this is a one-off item. And then when we look at the gross margin dynamics in general going into Q2, you can see from our operating margin guidance that we are expecting, if you take out this one-off payment, a clear reduction in gross margin going into Q2. And this is coming from the competitive dynamics and pricing factors as was discussed earlier, i.e. the dual sim, new products coming to market and then also from the Japan visibility factor. So those are really the dynamics there. Kulbinder Garcha - Credit Suisse: And just one thing, sorry, Timo on (bad luck). In terms of the full year margin guidance, in Q4 there is quite a big recovery implied. Are you assuming that you will have a Windows phone this year, because there has been mixed messages from the company as to whether you will have one this year or not?

I'll just reiterate what we have said here. Devices that take advantage of the Windows phone platform will be shipping in volumes in 2012. And the pressure is clearly on to be delivering devices in 2011 as well.

If I may add to that, because let's still note that our guidance range is fairly wide for full year. That is there on purpose. I mean, what we are trying to say now is that we have moved to executing the new strategy. We have one quarter behind us at the moment. We have bit more visibility, but we are not saying that the visibility is great going into full year.

Your next question comes from the line of Mark Sue with RBC Capital Markets. Mark Sue - RBC Capital Markets: Are there proactive thoughts on differentiating with the Microsoft devices, since there will be a lot of devices by the time Nokia comes with phones this year, or is that differentiating more of a next year ambition? And then maybe a longer term industry question. With the reliance of an outside operating system, can the operating margins for mobile device hardware makers recover that to historical levels, or should we see it rather as a permanent shift with operating margins moving from one side to another? And I ask, as investors are concerned, mobile device margins can look somewhat like PCs over time.

With respect to the differentiation in and around our efforts on the Windows phone platform, clearly a critical part of our relationship with Microsoft is the ability to differentiate both as it relates to other ecosystems and when and if necessary within the context of the Windows phone ecosystem as well; that's a critical component of the unique nature of our relationship, and one that we will be very focused on. The number varies, where already for example if you look at across our Symbian products or services and so forth, there are a number of unique differentiators visible today in some of the products we ship, whether it's in areas like photography and video, whether it's in areas like the services around mapping and navigation in other location-based services. All of these types of things contribute to our differentiation, And of course, we'll be building on those capabilities, extending them and adding some new areas of differentiation, both at the beginning and on an ongoing basis with respect to the Microsoft differentiation. Now as it relates to the industry at large, of course margins are ultimately dictated by differentiation. So for example, there are some dynamics that are becoming perhaps apparent over time as it relates to the Android ecosystem, where there is a huge number of people, each contributing different devices and trying to differentiate. The ability of any particular participant to gain greater margins will be a function of how well they differentiate. The same applies to Nokia, and the same applies to the Windows Phone ecosystem as well in terms of its overall differentiation relative to the other environments. And so, part of our fundamental decision-making, as it relates to the partnership with Microsoft was the belief that there was an opportunity to establish a third ecosystem, as we characterize it to make it a three-horse race, to increase the possibility for differentiation and therefore drive better margins, certainly for us and for participants in our ecosystem than would otherwise be the case. That said, the alternative way, our sense was that if we had made the Android decision, that that would have accelerated commoditization in the marketplace.

If I may add to that just one point, that still compared to the PC industry, we at Nokia feel that this is a very personal device, and that differentiation of course comes from the overall user experience. That can still in the future as well come from very, very good hardware phone factors for example.

Your next question is from the line of Ittai Kidron with Oppenheimer. Ittai Kidron - Oppenheimer: What I wanted to get into, Timo, if you can, the linearity of the €1 billion savings. It sounds like as you mentioned most of the people would still be on payroll through the end of the year. So you won't realize much savings there, and I don’t know how much in facilities as a result of that can you really terminate. But is it safe to assume that the savings will be fairly limited this year and will start showing in much significant numbers through '12 and '13?

Yes, from the (inaudible) what we have given today, we clearly have a situation where we are in a transition period. There is also a lot of work to do during the transition period. So we think this is the right way to manage this for the company. We have also given a very clear target, i.e. it is a comparison from the actual OpEx 2010 to actual OpEx what we expect to see in 2013. So those are really the dynamics. But from that it is clear that the majority of the reduction we are currently expecting to happen during 2012.

Your next question is from the line of Jeff Kvaal with Barclays. Jeff Kvaal - Barclays: I was wondering how you are prioritizing market share and margins over the transitional period? And it seems though, particularly in converged device your market share is down a bit each of the last several quarters. And wondering, how you would like to see that versus maintaining ASP?

First of all, there isn’t a single answer to the question because of the different dynamics and different channels around the world. For example, in an open distribution setting, where again, the consumers directly are driving demand, are influencing pricing through overall market conditions and so forth, the need for fine-tuning on pricing and things like that is a bit less pronounced. Whereas, in certain environments, where for example an operator maybe auctioning, they are creating a very competitive environment on a pricing perspective, clearly there, the use of tactical pricing items or tactical pricing actions may be necessary. So the way we deliberately think about this is not one versus the other or even hand waving around the balance; it's treating each channel and each partner and each situation very deliberately. It is important, for example, that we maintain share and shops space for example in the operator mindset. It's important that we respect the consumer demand and the competitiveness of our products in open distribution. We have to reflect that as well. So it's something we dealing with at a very detailed level, recognizing that share must be maintained, but at the same time, we may have to take actions on a pricing perspective that affects gross margin. Jeff Kvaal - Barclays: We'd see in a transition period that you would have some flexibility. We know that your high end portfolio is going to refresh dramatically, and therefore you have a chance to reset pricing. So why not just take a real aggressive stance towards market share over the course of the next nine months?

Part of the reason for that is if that was our general message, hey, share at all costs or what have you, that type of message tends to ripple through an organization and then decisions are made that perhaps don’t have to be made as it relates to pricing. We have to balance and respect that if you like to want to maintain some degree of direct control on a detailed basis on pricing decisions that are made to avoid unnecessary price changes and so forth as we go. But again, to support your point, in a particular operator auction situation or so forth, where it's competitive and so forth with all of the other vendors, we will compete. And obviously part of that is the pricing action.

If I may add, if we look at this market by market, we clearly have the first pyramid there which we try to optimize is the absolute gross margin, not the percentage on gross margin. And that is the pyramid, but clearly you can't let market share go; that's clear as well. And again, there was a question earlier regarding gross margin for Q2. And if we take this one-off item out, we are clearly looking at lower gross margin, which is partly driven by these dynamics. But ultimately, optimization pyramid, the first level, we try to keep as the absolute gross profit.

Your next question is from the line of Pierre Ferragu with Bernstein. Pierre Ferragu - Bernstein: I'd like come back to the billions of dollars payment by Microsoft you mentioned. I just wanted to clarify the nature of this payment. Is that cash that we take from the cash pile and put on your cash pile, or is it more something like revenue sharing, for instance on advertising revenue that would be driven by Bling, or would that be something like a distribution fee, for instance Microsoft would pay you on the distribution of Bling?

The short answer to that is cash. I'm not sure if it's a wire transfer or a large check, but it's cash. As we said earlier, the accounting treatment is something that's still being worked through precisely how it shows up in the income statement. Obviously, it will appear in various ways, also balance sheet impact and so forth, but it’s as simple as that.

Your next question is from the line of Stuart Jeffrey with Nomura. Stuart Jeffrey - Nomura: I had a question, IPR, you seem to be talking about generating more and more money, be more aggressive in IPR. And I remember a few years ago Nokia tried being more aggressive in IPR and it did have a huge impact really. So I was wondering what's different now and whether perhaps you might also try and use IPR with Microsoft to be more strategic to try and increase the cost space of Android vendors, for example.

You answered part of the question in the second part. Indeed, I think it's very evident in the industry today that intellectual property is playing a critical role. It plays a critical role in the defense of a company, or in this case an ecosystem. And clearly, it’s in our interest jointly with Microsoft to ensure that the participants in the Windows Phone ecosystem are well protected from the aggression of others and at the same time our usual euphemism, clearly there's an opportunity to be more strategic in the use of intellectual property. Some of those patterns are already set, and of course our overall interest is to ensure that people are properly licensed for the use of our intellectual property and that people properly pay for what they are using.

We'll move forward to the next question. It is from the line of Zahid Hussein with Citigroup. Zahid Hussein - Citigroup: Just wanted a follow up on the IPR question just asked. You quantified billions from Microsoft. So, should we think of that in a similar kind of run rate or will it be a lot lower? And secondly, in terms of Windows phone, when do you think you'd be able to scale down the ASP so that's competitive? At the moment the Android World has targeted some €150 this year. Where do you think you can be at the end of 2012 and 2013?

On the IPR, we are really not giving any particular definition of the op amount at the moment and we can’t go deeper into that. I mean, you know well that in this IPR contract in general, and like holding the fact that the contracts are just simply usually not disclosed is what we need to do here.

With respect to the price points and so forth with Windows Phone, it's very important to recognize that our aspirations, and indeed some of our unique contribution to the Windows Phone ecosystem and our efforts reflect the fact that we do intend to serve a wide range of price points with the Windows Phone platform. We bring some particular expertise here, given our experience with Symbian, given our experience with alternative chipsets and so forth that are contemplated in the strategic work that we’ll do together. And so I won't comment specifically on what we’re doing by the end of 2012. Clearly, it is our intent to make Windows Phone a platform with a series of devices from Nokia that spans with substantially more price points than it is at today, and we’ll be pushing on that effort very aggressively in the years ahead.

Today’s final question will come from the line of Alexandre Peterc from Exane BNP. Alexandre Peterc - Exane BNP: Just a quick question if I may on the portfolio in H2 on your planned releases in the second half. Are we talking more feature phone kind of products, maybe Symbian phones in the mid to lower end, and what will be their impact on ASPs and gross margins in the second half?

First of all, I'll comment on the portfolio then I'll let Timo comment on overall impact. H2 is a busy season, both for Symbian and for the lower end mobile phones devices. On the Symbian front, I think the way to think about those devices is that they are lower down the pricing portfolio than the initial iconic devices like the N8 and E7 which are already out there. And so those devices are further down the pricing point. As it relates to the mobile phones area, again, anticipating, as I said in my remarks, a range of devices, particularly taking advantage of the dual sim technology, and thus you should see, within those price bands served by those devices a range of different price points anticipated.

If we talk about the dynamics here, so we do not give gross margin guidance as you know. But regarding ASP coming, the mobile phones products are really pretty much coming throughout the range. And what we can say that now more and more of the new smart devices are on the new Symbian platform, and that also means that the gross margin dynamics of the new Symbian products will start to be close to the average company gross margin dynamics because there is a broader portfolio of these products out there.

I would like to turn this call back to Stephen for some closing comments.

Just to summarize, some of our overall messages, particularly for the investor community, clearly we are going through a transition. We recognize the challenges that we are facing and we are taking very aggressive action to remedy that. What we wanted to communicate today in large part was the beginning of the reduction of ambiguity; lots of questions about the ability to get the Microsoft deal signed in what timeframe. We did that very well, very aggressively, and preserved the integrity of what was originally agreed. So that was well done. You clearly saw some good results in Q1. There are some challenges in Q2 that we've characterized, but also seeing things like new versions of Symbian devices, Symbian software and a variety of other things gives us a lot of hope for the quarters ahead, which gave us the confidence to further reduce ambiguity about the guidance for this year. There is also clearly a lot of questions about whether we were serious or not about the operating expense targets. The target that we communicated I think illustrates very clearly our intent to take that on very aggressively. And so, we still have ambiguity ahead, when precisely the first Windows device ship and all of those types of questions. That will become clear quite soon. So we appreciate the support that you have shown us on an ongoing basis, and our pledge to you is to continue to not only reduce ambiguity but begin to post the results that we are hopeful for. So thank you all.

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 risk 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 39 in our 2010 20-F and our press release issued today. Thank you.

Ladies and gentlemen, thank you for joining the Nokia first quarter 2011 earnings results conference call. You may now disconnect.