Nokia Requires Heavy R&D Investment to Hold Revenue Flat

Nokia’s largest businesses supply mobile and fixed-line equipment to telecom carriers worldwide, markets characterized by intense pricing pressure as rivals battle to innovate around industry-standard technologies. The firm stands to benefit from the growing demand among hyperscale cloud computing providers, but this customer base currently accounts for only around 5% of sales. We expect Nokia to generate minimal growth, forcing it to maintain strict cost controls to support profitability.