Nokia: a solid 2020 followed by a challenging 2021

$Nokia Oyj(NOK.US)$ beat analyst earnings estimates by €0.03 and revenue estimates by €60 million in the 4th quarter. But the company's stock tumbled since last week as a broad Reddit-stock sell-off hurts resluts. "We expect 2021 to be challenging, a year of transition," said Pekka Lundmark, Nokia's CEO. In FY 2021, NOK expects net sales to be affected by a significant decline in Mobile Networks, due to not converting all of its 4G footprint into 5G footprint in North America in 2020, as well as price erosion. Come and see what happened in the Q4 2020 earnings call! 

This article is a script from the Q&A session of Nokia's earnings call on February 4. In order to facilitate reading, we have made appropriate cuts. If you want to know more details, you can click the link provided by  @moo_Live  below to re-watch the earnings call.

Q: Could you elaborate on where specifically you feel that you have improved your 5G competitiveness? And also, has these encouraging comments and trends you're seeing made you believe that you can perhaps catch up a bit sooner than you had anticipated and spoke to us about three months ago?
A: We were pretty confident on our ability to catch up back. And this is a matter of both silicon customer and in some cases merchant silicon, but then it's very much the software features and software functionality. There are clearly areas where we don't need any catch-up anymore. We are one of the leaders. And one of the examples is clearly end-to-end network slicing, which cuts across the whole network and also across 4G and 5G and makes it possible for operators to offer specific enterprise -- enterprise-specific slices when they are doing their industrial applications. We are approaching a situation where there is no need to talk about catch-up anymore, but there is a lot of work still to do this year. But once we get through this year, I believe we will get there.

Q: Do you feel confident that you're holding your share in the rest of your North America base? Do you think that we will at the very least be troughing in terms of market share now in 2021? Or is it too early to have that confidence and you need to see a bit more of customer interaction and success on winning this year?
A: Yes. We do need to see more customer interaction before we are able to say anything about '22 or '23 market share. Of course, some of the recent deal activity that we have had, especially the ones that we have published, is promising, but it's still too early to call. And then of course, when it comes to individual customers, customer names, including in North America, we never comment individual customers speculations in terms of what they might or what they might not decide in the future.

Q: Will we have further impacts from China in '21? And then the same for North America? Or are we going to be having this share loss hampering growth in North America for more years than just the current year? For Europe, you have some gains here. Have those already transpired in what we saw in the final quarter, or is there more to come in '21 and beyond?
A:  The overall market share excluding China. Remember this 25% to 27% this year and 27% to 28% last year was excluding China. So that effect is eliminated. Clearly, the negative driver this year is North America. And then Europe is actually supporting this, mitigating some of that negative effect. We have guided only this year's market share, and it's actually very difficult to say anything yet about '22 or '23. We may be able to shed some light on this question at the Capital Market Day, but there is still so many deals to be negotiated and, hopefully, one during this year that will then affect next year's and 2023's market share that it's simply too early to comment that.