Thursday, April 30, 2015

Japan Post Group, IBM and Apple Deliver iPads and Custom Apps to Connect Elderly in Japan to Services, Family and Community

Source: Apple - Press Releases - April 30, 2015

TOKYO, ARMONK, New York and CUPERTINO, California—April 30, 2015—Japan Post Group, IBM and Apple® today announced a first-of-its-kind initiative aimed at improving the quality of life for millions of Japanese senior citizens. Built on the global partnership Apple and IBM announced last year, the new initiative will deliver iPads with IBM-developed apps and analytics to connect millions of seniors with services, healthcare, community and their families.

After piloting iPads and apps custom developed for the elderly, Japan Post Group will expand the service in stages with the objective of including 4 million to 5 million customers in Japan by 2020.

Today more than 33 million seniors make up about 25 percent of Japan’s population, projected to grow to 40 percent over the next 40 years.*

“We are joining with two of the world’s most respected leaders in technology to bring our elderly generation into the connected world, expand our businesses by deepening relationships, and discover new ways to strengthen the fabric of our society and economy,” said Taizo Nishimuro, CEO of Japan Post Group.

The initiative includes:

  • iPad® and its intuitive built-in apps, capabilities and features including FaceTime®, Messages, Mail, Photos and iCloud® Photo Sharing, along with access to rich content in the App Store℠, iTunes Store® and iBooks Store℠. iOS 8, offering award-winning accessibility features, including settings for low vision and hearing impaired users.
  • Custom-built apps specifically for the elderly by IBM Global Business Services for reminders and alerts about medications, exercise and diet, along with direct access to community activities and supporting services such as grocery shopping and job matching.
  • Exclusive cloud services of the IBM MobileFirst for iOS platform, for data integration and security, analytics, and management of millions of devices; along with systems integration services and training for Japan Post Group employees.
  • Pioneering text analytics and accessibility technologies, many invented in IBM Research - Tokyo, including Japanese natural language analysis and tracking to guide seniors and make the experience more natural. 
  • The nationwide infrastructure of Japan Post Group and its ability to cover the “last mile” to virtually every citizen of Japan. In addition to 24,000 post offices and a workforce of 400,000, Japan Post Group has existing financial relationships with nearly all of the 115 million adults in Japan.

“What we’re starting today draws on IBM’s long heritage of innovation at the intersection of technology, business and society,” said Ginni Rometty, President, Chairman and CEO of IBM. “The potential we see here—as broad as national economics and as specific as the quality of life of individuals and their families—is one example of the potential of mobile-led transformation anywhere in the world where issues of an aging population exist.”

“This initiative has potential for global impact, as many countries face the challenge of supporting an aging population, and we are honored to be involved in supporting Japan’s senior citizens and helping enrich their lives,” said Tim Cook, Apple’s CEO. “iPad is incredibly intuitive, easy to use and has accessibility features built in, making it a perfect device for any generation to be connected and engaged.” 

Addressing a Global Priority
As a percentage of global population, the elderly will increase from 11.7 percent in 2013 to more than 21 percent by 2050. Every day, 10,000 people turn 65, and 40 percent of seniors live alone or with their spouse only.**

In Japan, these historic generational shifts contribute to an imbalance in the labor force, a concentration of wealth among people who tend to spend less than other age groups, and significant strain on extended families. Today, nearly 180,000 people in Japan between the ages of 15 and 29 provide care for a family member.***

Next Steps
Japan Post Group’s postal operations include the national Watch Over service. For a nominal monthly fee, mail carriers check in on elderly customers and assure families about the well-being of their relatives. That service can now be extended and enhanced with iPad, complementing the in-person monitoring. 

Japan Post Group will begin the pilot service in the second half of this year, which will be offered in conjunction with the Watch Over service. The service will expand in stages, ultimately aiming to reach 4 million to 5 million customers in Japan by 2020.  

* Japan Ministry of Health, Labour and Welfare’s “Comprehensive Survey of Living Conditions 2013”
** UN World Population Aging Report, and US Census Bureau
*** Basic Survey on Employment Structure, 2012, Ministry of Internal Affairs and Communications, Statistics Bureau

About Japan Post Group
Japan Post Group was established in 2007 under the Postal Service Privatization Act in Japan. Japan Post Holdings provides postal, banking and insurance services through three wholly owned subsidiaries, Japan Post, Japan Post Bank, Japan Post Insurance. Japan Post Holdings had consolidated reported revenue of JPY 15,240 billion (USD 127 billion) and Net Ordinary Income of JPY 1,104 billion (USD 9.2 billion) in the financial year ended 31 March 2014. Japan Post Group employs approximately 400,000 people across 13 branches and 24,000 post offices throughout Japan. Japan Post Group offers various products and services required at any life stage, prioritizing customer’s daily life via a nationwide network.

About IBM MobileFirst
IBM’s 6,000 mobile experts have been at the forefront of mobile enterprise innovation. IBM has secured more than 4,300 patents in mobile, social and security, which have been incorporated into IBM MobileFirst solutions that enable enterprise clients to radically streamline and accelerate mobile adoption, help organizations engage more people and capture new markets. Through IBM's partnership with Apple, the two organizations are transforming enterprise mobility with a new class of industry specific business apps. For more information on IBM MobileFirst, visit the press kit or www.ibm.com/mobilefirst. Follow @IBMMobile on Twitter, and see IBM MobileFirst on YouTube, Tumblr and Facebook.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

Interim Report for Q1 2015

Source: Nokia - Press Releases - April 30, 2015

Strong year-on-year sales growth; Weak Nokia Networks profitability compensated by good performance in Nokia Technologies and HERE
This is a summary of the Nokia Corporation interim report for first quarter 2015 published today. The complete first quarter 2015 interim report with tables is available at http://company.nokia.com/en/financials. Investors should not rely on summaries of our interim reports only, but should review the complete interim reports with tables.

FINANCIAL HIGHLIGHTS
  • Net sales in Q1 2015 of EUR 3.2 billion (EUR 2.7 billion in Q1 2014), up 20% year-on-year
  • Non-IFRS diluted EPS in Q1 2015 of EUR 0.05 (EUR 0.04 in Q1 2014), an increase of 25% year-on-year; reported diluted EPS in Q1 2015 of EUR 0.05 (EUR 0.03 in Q1 2014), up 67% year-on-year
Nokia Networks
  • 15% year-on-year net sales growth driven by growth in four out of our six regions, with non-IFRS operating margin declining to 3.2% from 9.3%
  • 21% year-on-year growth in Global Services net sales, primarily driven by strong growth in the network implementation business line. 10% year-on-year growth in Mobile Broadband net sales, primarily driven by overall radio technologies, particularly LTE
  • 61% year-on-year decline in non-IFRS operating profit primarily driven by lower software sales, lower non-IFRS gross profit in the systems integration business line, the short-term impact of strategic entry deals, higher non-IFRS operating expenses due to foreign exchange impacts and increased investments in LTE, 5G and cloud core, and more challenging market conditions
  • 25% year-on-year growth in net sales, with 29% year-on-year increase in sales of new vehicle licenses for embedded navigation systems
  • 90% year-on-year growth in non-IFRS operating profit, with non-IFRS operating margin expanding to 7.3% from 4.8%
Nokia Technologies
  • 103% year-on-year growth in net sales and 124% growth in non-IFRS operating profit, primarily due to non-recurring adjustments to accrued net sales from existing agreements, revenue share related to previously divested intellectual property rights, and intellectual property rights divested in the first quarter 2015. In addition, net sales and non-IFRS operating profit benefitted from higher intellectual property licensing income from existing licensees
Reported first quarter 2015 results1
EUR millionQ1'15Q1'14YoY changeQ4'14QoQ change
Net sales - constant currency11%(21)%
Net sales3 1962 66420%3 802(16)%
  Nokia Networks2 6732 32815%3 365(21)%
  HERE26120925%292(11)%
  Nokia Technologies266131103%14979%
Gross margin % (non-IFRS)42.5%45.6%(310)bps43.5%(100)bps
Operating profit (non-IFRS)265305(13)%524(49)%
  Nokia Networks85216(61)%470(82)%
  HERE191090%20(5)%
  Nokia Technologies19386124%77151%
  Group Common Functions(32)(8) (43) 
Operating margin % (non-IFRS)8.3%11.4%(310)bps13.8%(550)bps
Profit (non-IFRS)20017216%356(44)%
Profit18111065%327(45)%
EPS, EUR diluted (non-IFRS)0.050.0425%0.09(44)%
EPS, EUR diluted0.050.0367%0.08(38)%
(1) Results are as reported unless otherwise specified. The results information in this report is unaudited. Please see "Notes to financial statements - Basis of preparation" in our complete Q1 2015 interim report for more information. Non-IFRS results exclude transaction and other related costs resulting from the sale of substantially all of Nokia's Devices & Services business to Microsoft, goodwill impairment charges, intangible asset amortization and purchase price related items, restructuring related costs, and certain other items that may not be indicative of Nokia's underlying business performance. For a detailed discussion, please see the year to date discussion and the non-IFRS to reported reconciliation note to the financial statements in our complete Q1 2015 interim report. A reconciliation of our Q4 2014 non-IFRS results to our reported results can be found in our complete Q4 2014 interim report with tables on pages 20-25 published on January 29, 2015. A reconciliation of our Q3 2014 non-IFRS results to our reported results can be found in our complete Q3 2014 interim report with tables on pages 22-27 published on October 23, 2014. A reconciliation of our Q2 2014 non-IFRS results to our reported results can be found in our complete Q2 2014 interim report with tables on pages 22-27 published on July 24, 2014.
Subsequent events
After the end of the first quarter 2015, Nokia announced it had entered into a memorandum of understanding regarding a combination with Alcatel-Lucent, and that it had initiated a strategic review process related to HERE. Additionally, there were positive developments in Nokia's venture fund investments after the end of the first quarter. Please refer to page 5 in Nokia's complete Q1 2015 interim report for additional information related to these events.
CEO statement
Nokia delivered a 20% increase in net sales and 25% increase in earnings per share in the first quarter.  Underlying these results was excellent performance from HERE and Nokia Technologies, while good growth at Nokia Networks was offset by unsatisfactory profitability. 
I remain confident that our lean operating model, ongoing focus on cost management, and the current strength of our portfolio will enable us to meet our 2015 goals for Nokia Networks. The business delivered healthy year-on-year growth even after adjusting for currency fluctuations, although a number of factors in the quarter had a negative impact on profitability. We expect some of these negative factors to ease, particularly in the second half of 2015.
HERE's excellent momentum in the automotive sector continued, helping the business deliver 25% year-on-year growth and improved profitability. As we proceed with the strategic review that we announced on April 15, we are considering our options in order to determine what is best for Nokia shareholders and best for HERE. I am very pleased with HERE's performance and firmly believe that it will have a bright future, either with Nokia or with new ownership.
Nokia Technologies also had a strong quarter with year on year sales up more than 100% and operating margin up sharply both year-on-year and sequentially. The business benefitted in the quarter from some non-recurring effects and revenue share from previously divested intellectual property rights. I am more confident than ever that licensing activities are tracking well and that there is a robust pipeline of potential new licensees. In addition, I believe that we are focusing on the right innovation opportunities and that the necessary cost discipline is in place.
Shortly after the end of the quarter, we announced a landmark deal with Alcatel-Lucent. The strategic logic of this proposed transaction is strong and we believe that it will provide long term benefits to shareholders of both Nokia and Alcatel-Lucent. We are moving fast on the necessary integration planning, and have already established a structure designed to minimize disruption to our ongoing business. We will bring the same operational discipline to our integration activities that we have successfully applied to the earlier transformation at Nokia Networks.
Rajeev Suri
President and CEO of Nokia

Nokia in Q1 2015
The following discussion is of Nokia Group's reported results for the first quarter 2015 which comprise the results of Nokia's three businesses - Nokia Networks, HERE and Nokia Technologies, as well as Group Common Functions. Comparisons are given to the first quarter 2014 and fourth quarter 2014 results, unless otherwise indicated.
Financial discussion
Net sales
Nokia's net sales increased 20% year-on-year and declined 16% sequentially. At constant currency, Nokia's net sales would have increased 11% year-on-year and declined 21% sequentially.
Year-on-year discussion
The year-on-year increase in Nokia's net sales in the first quarter 2015 was primarily due to higher net sales in Nokia Networks, Nokia Technologies and, to a lesser extent, in HERE.
Sequential discussion
The sequential decline in Nokia's net sales in the first quarter 2015 was primarily due to seasonally lower net sales in Nokia Networks and, to a lesser extent, in HERE. This was partially offset by higher net sales in Nokia Technologies.
Non-IFRS Operating profit
Year-on-year discussion
Nokia's non-IFRS operating profit declined 13% year-on-year in the first quarter 2015, primarily due to a decline in non-IFRS operating profit in Nokia Networks, partially offset by increases in non-IFRS operating profit in Nokia Technologies and, to a lesser extent, in HERE.
Nokia's non-IFRS other income and expenses was an expense of EUR 19 million in the first quarter 2015, compared to an income of EUR 11 million in the first quarter 2014. On a year-on-year basis, the change in Nokia's non-IFRS other income and expenses was primarily due to lower other income in Group Common Functions and higher foreign exchange hedging related losses.
Sequential discussion
Nokia's non-IFRS operating profit declined 49% sequentially in the first quarter 2015, primarily due to a decline in non-IFRS operating profit in Nokia Networks, partially offset by an increase in non-IFRS operating profit in Nokia Technologies.
Nokia's non-IFRS other income and expenses was an expense of EUR 19 million in the first quarter 2015, compared to an expense of EUR 2 million in the fourth quarter 2014. On a sequential basis, the change in Nokia's non-IFRS other income and expenses was primarily due to foreign exchange hedging related losses.
Non-IFRS Profit
The share of results of associated companies in the first quarter 2015 includes an approximately EUR 25 million out of period adjustment. Nokia has historically accounted for the results of the associated company in arrears as the results have not been material. Due to an increase in the entity's earnings, the amounts reflected in the first quarter 2015 should have been recorded in the fourth quarter 2014.
Year-on-year discussion
Nokia's non-IFRS profit increased 16% on a year-on-year basis in the first quarter 2015, primarily due to lower non-IFRS financial expenses and the approximately EUR 25 million out of period adjustment mentioned above, partially offset by lower non-IFRS operating profit and, to a lesser extent, higher non-IFRS tax expenses. In the first quarter 2015 Nokia's non-IFRS tax expense was based on an effective tax rate of approximately 25%, and this resulted in a higher non-IFRS tax expense than in the first quarter 2014. However, the tax expenses in the first quarter of 2014 and 2015 are not directly comparable due to the fact that Nokia's deferred tax assets in Finland and Germany were subject to valuation allowances until the third quarter of 2014.
Sequential discussion
Sequentially, Nokia's non-IFRS profit declined 44% in the first quarter 2015, primarily due to a decline in non-IFRS operating profit, partially offset by lower non-IFRS tax expenses, the approximately EUR 25 million out of period adjustment mentioned above and lower non-IFRS financial expenses.
OUTLOOK
 MetricGuidanceCommentary
Nokia NetworksFY15 Net salesIncrease YoY 
 FY15 Non-IFRS op. marginAround the midpoint of the long-term range of 8% - 11% for the full year (update)Based on factors including competitive industry dynamics, product and regional mix, the timing of major network deployments, and expected continued operational improvement.
This is an update to the earlier non-IFRS operating margin outlook to be in line with the long-term range of 8%-11% for the full year.
HEREFY15 Net salesIncrease YoY 
 FY15 Non-IFRS op. margin9% - 12% (update)Based on factors including leading market position, positive industry trends and improved focus on cost efficiency.
This is an update to the earlier non-IFRS operating margin outlook to be between 7%-12% for the full year.
Nokia TechnologiesFY15 Net salesIncrease YoYExcludes potential amounts related to the expected resolution of our arbitration with Samsung. Based on factors including higher investment in licensing activities, licensable technologies and business enablers, including go-to-market capabilities, which target new and significant long-term growth opportunities. 
 FY15 Non-IFRS op. expenseApprox. in line with Q4'14 level
NokiaFY15 Capital expenditureApprox. EUR 250 million (update)Primarily attributable to Nokia Networks
This is an update to the earlier outlook of approximately EUR 200 million for the full year.
 FY15 Financial income and expenseExpense of approx. EUR 160 millionSubject to changes in foreign exchange rates and interest-bearing liabilities.
 FY15 Group Common Functions
non-IFRS op. expense
Approx. EUR 120 million 
 Estimated long-term effective tax rateApprox. 25% 
 Annual cash tax obligationApprox. EUR 250 million per annum until deferred tax assets fully utilizedMay vary due to profit levels in different jurisdictions and amount of licence income subject to withholding tax.
RISKS AND FORWARD-LOOKING STATEMENTS
It should be noted that Nokia and its businesses are exposed to various risks and uncertainties and certain statements herein that are not historical facts are forward-looking statements, including, without limitation, those regarding: A) the outcome, transaction timeline and closing of the proposed combination of Nokia and Alcatel-Lucent pursuant to a memorandum of understanding ("MoU") as announced on April 15, 2015 ("Proposed transaction") and the ability of Nokia to integrate Alcatel-Lucent into Nokia operations ("Combined company") and achieve the targeted benefits; B) satisfaction of conditions precedent including closing conditions related to the Proposed transaction in a timely manner, or at all, including obtaining required regulatory approvals, the confirmation and approval of our shareholders for the Proposed transaction and successfully completing tenders for the Alcatel-Lucent shares; C) expectations, plans or benefits related to Nokia's strategies, including the review of strategic options for our HERE business; D) expectations, plans or benefits related to future performance of Nokia's businesses Nokia Networks, HERE and Nokia Technologies; E) expectations, plans or benefits related to changes in our management and other leadership, operational structure and operating model, including the expected characteristics, business and operations of the Combined company; F) expectations regarding market developments, general economic conditions and structural changes; G) expectations and targets regarding performance, including those related to market share, prices, net sales and margins; H) timing of the deliveries of our products and services; I) expectations and targets regarding our financial performance, operating expenses, taxes, cost savings and competitiveness, as well as results of operations, including synergies related to the Proposed transaction, the target annual run rate of cost synergies for the Combined company and expected financial results of the Combined company; J) expectations and targets regarding collaboration and partnering arrangements, including the expected customer reach of the Combined company; K) outcome of pending and threatened litigation, arbitration, disputes, regulatory proceedings or investigations by authorities; L) expectations regarding restructurings, investments, uses of proceeds from transactions, acquisitions and divestments and our ability to achieve the financial and operational targets set in connection with any such restructurings, investments, divestments and acquisitions, including any expectations, plans or benefits related to or caused by the transaction where Nokia sold substantially all of its Devices & Services business to Microsoft on April 25, 2014; and M) statements preceded by or including "believe," "expect," "anticipate," "foresee," "sees," "target," "estimate," "designed," "aim," "plans," "intends," "focus," "continue," "project," "should," "will" or similar expressions.
These statements are based on the management's best assumptions and beliefs in light of the information currently available to it. Because they involve risks and uncertainties, actual results may differ materially from the results that we currently expect. We describe the risks and uncertainties that affect the Nokia Group or are relevant to all Nokia businesses at the beginning of this section and provide towards the end information on additional risks that are primarily related to the individual Nokia businesses: Nokia Networks, HERE and Nokia Technologies. Factors, including risks and uncertainties that could cause such differences include, but are not limited to: 1) the inability to close the Proposed transaction in a timely manner, or at all, for instance due to the inability or delays in obtaining the shareholder approval or necessary regulatory approvals for the Proposed transaction, or the occurrence of any event, change or other circumstance that could give rise to the termination of the MoU and successfully completing tenders for the Alcatel-Lucent shares; 2) the inability to achieve the targeted business and operational benefits from the Proposed transaction or disruption caused by the Proposed transaction, including inability to integrate Alcatel-Lucent into Nokia operations and any negative effect from the implementation of the Proposed combination or the announcement of the Proposed transaction for instance due to the loss of customers, loss of key executives or employees or reduced focus on day to day operations and business; 3) our ability to identify market trends and business opportunities to select and execute strategies successfully and in a timely manner, and our ability to successfully adjust our operations and operating models; 4) our ability to sustain or improve the operational and financial performance of our businesses and correctly identify or successfully pursue new business opportunities; 5) our dependence on general economic and market conditions, including the capacity for growth in internet and technology usage; 6) our exposure to regulatory, political or other developments in various countries or regions; 7) our ability to invent new relevant technologies, products and services, to develop and maintain our intellectual property portfolio and to maintain the existing sources of intellectual property related revenue and establish new such sources; 8) our ability to protect our intellectual property rights and defend against third-party infringements and claims that we have infringed third parties' intellectual property rights, as well as increased licensing costs and restrictions on our ability to use certain technologies; 9) the potential complex tax issues, tax disputes and tax obligations we may face, including the obligation to pay additional taxes in various jurisdictions and our actual or anticipated performance, among other factors, which could reduce our ability to utilize deferred tax assets; 10) our ability to retain, motivate, develop and recruit appropriately skilled employees, for instance due to possible disruption caused by the Prosed transaction; 11) the performance of the parties we partner and collaborate with, as well as that of our financial counterparties, and our ability to achieve successful collaboration or partnering arrangements, including any disruption from the Proposed transaction to obtaining or maintaining the contractual relationships; 12) exchange rate fluctuations, particularly between the euro, which is our reporting currency, and the US dollar, the Japanese yen and the Chinese yuan, as well as certain other currencies; 13) the impact of unfavorable outcome of litigation, arbitration, contract-related disputes or allegations of health hazards associated with our businesses; 14) any inefficiency, malfunction or disruption of a system or network that our operations rely on or any impact of a possible cybersecurity breach; 15) our ability to achieve targeted benefits from or successfully implement planned transactions, such as acquisitions, divestments, mergers or joint ventures, and manage unexpected liabilities related thereto; 16) our ability to manage our operating expenses and reach targeted results through efforts aimed at improving our financial performance, for instance through cost savings and other efforts aimed at increased competitiveness 17) our ability to optimize our capital structure as planned and re-establish our investment grade credit rating; 18) Nokia Networks' ability to execute its strategy or to effectively and profitably adapt its business and operations in a timely manner to the increasingly diverse needs of its customers in the mobile broadband infrastructure and related services market or to such technological developments; 19) Nokia Networks' ability to effectively and profitably invest in new competitive high-quality products, services, upgrades and technologies and bring them to market in a timely manner; 20) Nokia Networks' dependence on a limited number of customers and large multi-year agreements and adverse effects as a result of further operator consolidation; 21) Nokia Networks' ability to manage our manufacturing, service creation and delivery, as well as our logistics efficiently and without interruption; 22) Nokia Networks' dependence on a limited number of suppliers, who may fail to deliver sufficient quantities of fully functional products and components or deliver timely services meeting our customers' needs; 23) adverse developments with respect to customer financing or extended payment terms Nokia Networks provides to customers; 24) adverse developments resulting from or in connection to the review of strategic options for our HERE business, including those related to a potential divestment of the HERE business; 25) the intense competition HERE faces and its ability to effectively and profitably invest in new competitive high-quality services and data and bring these to market in a timely manner or adjust its operations efficiently; 26) HERE's dependence on the overall automotive market developments and customer business conditions; 27) HERE's dependence, especially with respect to sales to the automotive industry, on a limited number of customers and large multi-year agreements; 28) Nokia Technologies' ability to maintain its existing sources of intellectual property related revenue or establish new sources; 29) Nokia Technologies' dependence on a limited number of key licensees that contribute proportionally significant patent licensing income, including the outcome of the binding arbitration with Samsung expected in 2015; 30) Nokia Technologies' dependence on adequate regulatory protection for patented or other propriety technologies; and 31) Nokia Technologies' ability to execute its plans through business areas such as technology licensing, licensing the Nokia brand and other business ventures including technology innovation and incubation; 32) and the impact on the Combined company (after giving effect to the Proposed transaction with Alcatel-Lucent) of any of the foregoing risks or forward-looking statements, as well as the risk factors specified on pages 74 to 89 of Nokia's latest annual report on Form 20-F under "Operating and Financial Review and Prospects-Risk factors". Other unknown or unpredictable factors or underlying assumptions subsequently proven to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Nokia does not undertake any obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
Nokia management, Espoo - April 29, 2015