Nokia has identified the data centers as a significant growth market, and its CEO remained bullish about the future despite overall net sales dropping eight percent during the third quarter of this year.
The company's Q3 2024 results showed that growth in its network infrastructure and Nokia Technologies unit was offset by a decline in its mobile networks business, primarily in India, while it had also seen declining investment in cloud and network services.
Despite the decline, CEO Pekka Lundmark, whose future at Nokia is reportedly uncertain, remains confident the company is on the right track.
"As I reflect on our performance in the third quarter, I am optimistic we are now turning the corner in many parts of our business, even if some continue to experience market weakness," Lundmark said.
Nokia reported net sales of $4.7 billion for the quarter, down from $5.11bn last year, and down eight percent year-on-year (YoY).
However, the company did post an increase of four percent in operating profit, while net profit for the quarter was up by 32 percent YoY.
"There are reasons for optimism across our portfolio. We expect a significant acceleration in growth in Q4 in network infrastructure and see a number of structural demand trends supporting our future growth," added Lundmark, who noted that Nokia has also seen "excellent momentum in 5G Core" demand.
The company said it sees further opportunities to deploy 5G technology to the defense market, along with further investment in private wireless networks.
Data centers also present an opportunity for Nokia, Lundmark said.
"Across Nokia, we are investing to create new growth opportunities outside of our traditional communications service provider market," he said. "We see a significant opportunity to expand our presence in the data center market and are investing to broaden our product portfolio in IP Networks to better address this."
Last month, Nokia announced the launch of a data center automation platform, which it describes as an "event-driven automation" (EDA) platform.
According to the vendor, its offering helps data center operators reduce errors in network operations. By doing this, Nokia said it hopes to remove the risk of human error and reduce network disruptions and application downtime.
Nokia's EDA builds on Kubernetes, and features digital twin capabilities, generative AI assistance, and can integrate with a wide range of IT service management systems and cloud management platforms.
Separately today, Reuters reported that Nokia has cut 2,000 jobs in China, and plans to cut 350 jobs in Europe.