Question-and-Answer Session
Operator
[Operator Instructions]. We will pause for just a moment to compile the Q&A roster. [Operator Instructions]. Your first question comes from Mike Walkley with Piper Jaffray.
Michael Walkley - Piper Jaffray & Co.
Great.Thank you very much. Just wonder if I could follow up on your new internet services offering. Are there some investor concern that key operators will not support some of your key high end devices such as N81 and N95 due to Ovi and your new services offering? Could you comment on this and your conversations with carriers about Ovi?
Olli-Pekka Kallasvuo - President and Chief Executive Officer
Excellent, I very much thank you for the question. I really wanted to get to that point. So definitely I'll discuss this in two parts. I'll start with the internet services and then move over to the first part of your question. So, we announced the agreement with... the cooperation with Telefonica and I would say that's a good example of things that you will see. We have ongoing discussions with many other operators across the world and you will hear much more going forward, very, very good talks. And you know from our point of view, we can bring a lot to the table when it comes to the services, we can bring to the table the global service platforms. These are, this will require lot of investment, a lot of maintaining, maintaining the capabilities and the operators are increasingly seeing value in that.
And we also see value in what the operators can bring to the table and a lot of value and as the cooperation with Telefonica is now like I said the best possible example of that so far. And it's very clear that the operators, the mobile operators and other operators for that matter are the most natural partner and ally for us here when it comes to this area. I am personally very confident that we can make good progress here and partner in a very meaningful way.
Now then your first question related to the support of certain... there has been some media discussion on this one and I guess hence the question. So we are getting good support from different operators in Europe and elsewhere when it comes to... when it comes to the key products that I think you are referring to. With a good support for the N95 8 gigabyte and you will see like I said that product being featured quite extensively in the holiday categories and the same is and will be applicable to N81.
Again you will see more visibility there and these products are starting and in that way, in that way of course have not been visible in the marketplace so far. But you will see a lot of good support from the operators also with these ones including the U.K; it's very much including to U.K. And so even there I don't see any reason to be concerned. First, I will even look at this totality as it makes opportunity like we have indicated.
Michael Walkley - Piper Jaffray & Co.
Great thank you.
Olli-Pekka Kallasvuo - President and Chief Executive Officer
Next question.
Operator
Your next question comes from Tim Long of Banc of America Securities.
Timothy P. Long - Banc America of Securities
Thank you. Just a question on the outlook effect, could... I think in past Q3s you've talked more about normal seasonality, you are up 15%, when looking at the industry unit volumes in Q4, press release that didn't really have that as Rick you mentioned something about normal seasonality. Is that related to a component issue? So are we expecting a little less than normal seasonal growth for the industry this quarter. And related to that, normally we do see share gains. So would you say that's just being conservative on them, on the flat market share in this quarter? Thank you very much.
Richard A. Simonson - Executive Vice President and Chief Financial Officer
Yes Tim, I think you have to put all of this in the backdrop of pretty big seasonality going Q2 to Q3 here in terms of up about 9%. And so in that context, I think what we are saying in our forecast here kind of normal seasonality around the numbers that you were talking about, feels pretty reasonable. Now as mentioned in terms of the component issue, we are seeing both a strong growth was evident in third quarter for the overall industry, you think about this kind of nominal seasonality plus/minus a little bit in fourth quarter. That means the volumes overall are still pretty big in the industry. And then combined with good demand for the breadth of the Nokia portfolio, that's why we are talking about there is a little bit of tightness in some of our components and that has had a little bit of effect as we go into Q4. But as mentioned, feel pretty good about how our sourcing people are able to go out there and find everything available.
Timothy P. Long - Banc America of Securities
Okay.
Bill Seymour - Head of Nokia Investor Relations
Thanks Tim, next question.
Operator
Your next question comes from Tim Boddy of Goldman Sachs.
Bill Seymour - Head of Nokia Investor Relations
Tim or next question. Next question please. Hello, are you there now?
Tim Boddy - Goldman Sachs
Can you hear me?
Bill Seymour - Head of Nokia Investor Relations
Yes, sure.
Tim Boddy - Goldman Sachs
Brilliant, great okay. So the question was about the low end and about your gross margin prospects. Given that we at least historically have seen some improvement there as new platforms come to market and what's interesting in here is the margin still seems to be improving even before the signature is ready to ramp. Can you just help us understand what's driving that and how you see that playing out through the fourth quarter and into next year? Thank you.
Olli-Pekka Kallasvuo - President and Chief Executive Officer
Okay, thanks Tim, it's Olli-Pekka. So as we indicated, we have been seeing very, very sort of good market demand in the sub ?30 segment and like Rick said, the competition seems to be steering away from that market. And I think what has happened here is basically we have been able with our volumes and with our marketing money really to make it very, very difficult for the competitors to match what we can offer here. I would like to highlight the fact that, in the markets where we are selling these products, we are also selling other products and we are putting heavy advertising behind the Nokia brand, not necessarily in the entry segment but we are putting a lot of Nokia marketing money behind our product, other products there and there should be big overflow of that marketing money there to support our process and also in the sub ?30 segment. And this part of the economies of scale very rarely get dispersed. But I think it's very important to understand it also in marketing this... the economies of scale and matter becomes relevant.
Then of course the single chip point that you are breaking up relates to the overall effort and ability to take the cost base down when it comes to all levels... all market segments not only the entry and there we are seeing steady progress happening, but we are talking about... we are talking about evolution here as opposed to revolution. There is not one technology or solution-based single chip or something else that can completely change the name of the game. It simply evolution getting down with the cost base, this is one item there and this... the difficulty of making that happen plays in our favor. There are no tricks that are possible in this part, and that's why it's an evolutionary process to take the cost base down in order to be more price competitive.
Bill Seymour - Head of Nokia Investor Relations
Thanks Tim. Next question please.
Operator
Your next question comes from Stuart Jeffrey with Lehman Brothers.
Stuart Jeffrey - Lehman Brothers
Hi thanks. I have a question on ASPs; just want to perhaps get a bit more detail about what's going on there. Obviously there is a big mix shift towards low end. But could you perhaps also talk around how your ASP is trending within specific markets, are we seeing on a like-for-like basis some solid ASP trends or are we also seeing ASP trend down specifically across the board. And also looking to Q4 next year, you are also launching lot of new phones and even in the low end segment... entry level segment some aspirational low end, just like the Barracuda on a like-for-like basis, should we be expecting that to perhaps boost ASPs going into Q4? Thanks.
Richard A. Simonson - Executive Vice President and Chief Financial Officer
Yes Stuart, this is Rick. As we said overall, you know we've been talking about this throughout the year that the ASPs for the industry are going to come down and that's mainly a function of... if anybody in the industry can deliver valuable products to that there... those growing segments, we've been able to do that I think pretty demonstratively and that's going to continue. So that's the primary driver.
And now to your question in terms of markets or regions and variance, well, every body knows that we are having a lot of growth obviously in new subscribers and places like India and China continues, Indonesia we're having... seeing Africa come on in the big way that we started talking about late last year and those of course account for the majority of the increase in the sub ?50 and sub ?30 more importantly device markets.
But we're also seeing that there is significant development in volume coming from prepaid markets in parts of more established Europe for instance and that's had some impact on the overall ASP and the industry. And again, we can take advantage of it profitably there just as we can and what people would consider the emerging markets, but that's a function across the whole industry and a dynamic but I think people haven't quite paid enough attention to. For us, in terms of our product mix as well as we look at a little bit, we've had a little bit of a pickup in the U.S. market relative in this quarter and of course that is tended to be little lower ASP market for us. Also in the third quarter, you saw... and Olli-Pekka mentioned about China as CMCC and we continue to do good business with them in the... what people call the ultra low end. Remember, it's just a few quarters ago where people thought we had missed that completely and that was going to be a problem, but we are in there strongly working with them. So those do have pressure on driving the ASP down.
Bill Seymour - Head of Nokia Investor Relations
Thanks Stuart, next question please.
Operator
Your next question comes from Rod Hall of JP Morgan.
Rod Hall - JP Morgan
Yes, hello. I just had another question on this low end. This seems like every time we... every quarter we come to, we are talking about lower and lower numbers on the ASP. Is the average ASP and now we are talking about ?30 category and below. The question I have got is, do you see... when you look at the roadmap over the next couple of years, do you see any floor to that production prices of phone, I mean are you slowing down in your ability to decrease the prices that you can produce out or do things still look like you've got lots of runway ahead?
Olli-Pekka Kallasvuo - President and Chief Executive Officer
Olli-Pekka here. So, yes, we have runway, some runway ahead and, but that like I said its very clear that you need a lot in order to be able to take the product cost down here. You need more volumes, you need research and development there, it's not something that happens automatically. So you need to invest in R&D in order to get your low cost base down here and its an evolution. And the point is... the point here is not to be as cheap as possible. The point here is to be cheaper than the competition in order to make money and that I think we really can continue to be here in a major way and then you add to that again the, well discussed topics of marketing, marketing money that I just spoke about, the distribution, retail, logistics, it's the winning formula here and in that way, there's a lot of potential and possibility here to continue to make good business in the segment.
Bill Seymour - Head of Nokia Investor Relations
Thanks, next question.
Rod Hall - JP Morgan
Okay, thank you.
Operator
Your next question comes from Richard Kramer with Arete.
Richard Kramer - Arete
Thanks very much. Olli-Pekka, I would like to understand a little bit more of this... the scope of this paranoia you laid out and especially with this week's announcements about the 360 software platform refresh. When you are talking about going after competitors like Apple and RIM as well as your traditional competitors, perhaps Google or others, can you give us a little better sense of how you are planning to do that? Is it that you are going to ratchet up the pace of change of the portfolio refresh? Is it using the... the profits that you have for co-marketing deals and market reach that these guys can't match. I mean we watched now Enterprise for three years or so with a $1 billion or more of R&D spent without really making a dent in the RIM. What specifically will you do to start to keep these guys at bay and perhaps increase your own market share and then just one other simple question? The last time we saw Nokia move to a new organization, there was some disruption in the business, what are you doing to ensure that as you move to the new organization at the end of this year and into next year, we are not going to see a similar disruption like we saw three, four years ago. Thanks.
Olli-Pekka Kallasvuo - President and Chief Executive Officer
Yes okay. First, start with the last part here. Yes, it's a good question. We're working extremely hard here in order to make the transition here as smooth as possible, extremely hard and we've been working for long time I think I know what we're doing. There is of course always a new change in organization in a major way, there is some hassle. But at the same time, if I look at what the Nokia people are feeling here and how excited they are about this... the way about what we are doing here now, there's a lot of energy and it's... it is so intuitive, it's so meaningful to them and what I am basically saying is what when changing this organization here, we are aligning our structure to our strategy and that's fundamentally very, very important.
And we will be able to get efficiency savings here, we will be able to get new excitement in place and we will be a better, and we will be able in a better way to tap or to direct our efforts to the different segments of the market. So of course this is a... the organization change here is of course a net positive, that's very clear. We just need to be able to manage that, then we have been paying a lot of attention to that.
Now then RIM and Apple, so I think it's extremely important here that we have not now, but quite a while ago we have identified that we need to look at these competitors. Somewhat different business models than our traditional competitors do have, but I am really paying a lot of attention here on what Apple and RIM as an example... as examples are doing. And this of course will in practice mean that we will invest more money in the areas where we feel we need to be able to not only match that competition but beat that competition. It's a bit different with Apple than RIM, but basically it requires much more flexibility and attention to that one. I would claim you took the RIM example here up and you spoke about the enterprise and so forth. I would claim that maybe we have been now able to develop Series 60 as a platform will enable us going forward to exploit our full portfolio of products, in the Enterprise and in the product device [ph] segment and when it comes to e-mail as an example why should that be limited to Enterprise phones only. That's a must and it can be with Series 60. It is something that we will include in our total offering. And this volume and this possibility here will open up a lot more possibility. This was not the case two years ago where we needed to concentrate in Enterprise devices in order to able to ramp up... ramp up email and alike. Now it will be possible in a bigger scale. And in fact you will see quite a lot in that space going forward and that's a lot of attention here.
Richard Kramer - Arete
Okay. Thank you.
Bill Seymour - Head of Nokia Investor Relations
Thanks. Next question please.
Operator
Your next question comes from Mark McKechnie with Amtech Research. Mr. McKechnie, your line is open. I think that question has been withdrawn and the next question comes from Edward Snyder with Charter.
Edward F. Snyder - Charter Equity Research
Thank you very much. It's clear that you have done little better in North America here, but you're still continuing to struggle. A couple of things, I know you've had problems with some of the carriers in terms of products that you wanted to port out there. Are you going to try some sort of alternative marketing strategy, maybe something more on a retail channel as you are doing in Europe and do you believe that your internet strategy and some of the multimedia phones will open up some of the carriers in North America where your previous models specially the N Series have not been able to get any traction there?
Olli-Pekka Kallasvuo - President and Chief Executive Officer
Okay. Thanks for the question. Yes, you are right when you say that we made some progress in terms of markets in the third quarter in the U.S., but we are not home and dry, that's very clear. A lot needs to be done and lot needs to be improved, but I think we will see sort of good continuation of the trend here. But I have said it earlier, it will... it will be 2008 that will be the critical year and you really need to look at different operators strategies separately, you need to look at the Verizon Wireless strategy, AT&T, T-Mobile, Sprint as well.
But coming to the latter part of your question, so yes, we have been... have started to sell our multimedia computers in the U.S. through alternative channels. It's very small, it's very small in the total context and in that way sales-wise, profit-wise is not meaningful at this point of time, but I think we are building here something. We are building here the demand within the U.S. consumers to multimedia computers like we make them and this is something that I think will become more relevant... relevant going forward. We have even the U.S. based people here might have noticed, we have had advertising campaigns in the New York area and in California also when it comes to N95 and we have seen quite some traction here, interest-wise, but definitely until this becomes sort of more meaningful on the bottom line basis, it will take a while.
Bill Seymour - Head of Nokia Investor Relations
Next question please.
Operator
Your next question is from Richard Windsor with Nomura.
Richard Windsor - Nomura
Hi, good afternoon. A quick one, I wonder if you could give us an update on the intellectual property situation. I think last quarter you gave us an idea of how much you had booked in terms of payments to QUALCOMM and I wondered if you could give us an idea of what regions are you making assumptions for in terms of making... making those IPR assumptions. Thank you.
Richard A. Simonson - Executive Vice President and Chief Financial Officer
Yes Richard, this is Rick. Compared to Q2 we've, we made a payment of $20 million to QUALCOMM, we believe that it forms kind of a fair reason for compensation for the potential use of their central patents in Nokia UMTS handsets also during the third quarter. So now nothing has really changed from Q2 to Q3 frankly, and we will continue in this pattern, we will make adjustments if necessary if the facts change but so far it doesn't appear that they are changing. Or remember, in terms of how we see our overall provisioning in cost for total UMTS or WCDMA royalties, we've communicated that small change in that one-time impact was in the second quarter. But again as I said there, it was a very much a tertiary or lower driver in terms of some incremental improvement in gross margin from Q1 to Q2 and here going from quarter two to quarter three there hasn't been any change in the answer that really isn't any story there.
Richard Windsor - Nomura
And is that a global payment you are making or you assuming that you are only paying in certain regions?
Richard A. Simonson - Executive Vice President and Chief Financial Officer
I am not able to go in the more detail on that, I am afraid Richard so I have to leave it there.
Richard Windsor - Nomura
Okay, thank you.
Bill Seymour - Head of Nokia Investor Relations
Thanks Richard and operator, this will be the last question. Thank you.
Operator
Your last question is going to be from Alexandre Peterc with Exane.
Alexandre Peterc - Exane BNP Paribas
Yes hi and congratulations for great results firstly. I would like to look a little bit into how the geographic growth spanned out in this quarter. And I am finding it interesting to see that sequentially Asia isn't that strong, Europe on the other hand seems to be quite strong there. Maybe you could give us a little bit of explanation of on that and how you see that progressing in Q4. And then, there is one thing I didn't quite understand on components. You're not very specific in the press release and when, where, in which segment that has played a role. You took the loss of all the E90 for Q3, but I am wondering which other areas were affected in terms of product range and whether that had an effect on your market share in Western Europe in Q3? Thanks.
Richard A. Simonson - Executive Vice President and Chief Financial Officer
Yes, so let me... this is Rick. Let me take the component and then Olli-Pekka will give you some more color on terms of the regional growth dynamics. In terms of components, as we said we are kind of somewhat constrained but it really across a number of things. The one that got the most play or visibility in the third quarter was related to a microphone and speaker element in the Enterprise Device E90, again because that was a new device, a unique device, there was a lot of demand for that and we had to actually stop shipping that during parts of the quarter. But across the whole portfolio, it was kind of the normal things in a booming market. We had some juggle; we have to do around screens, LCDs, around this microphone which has not going to affect on other products. Plastics as simple as do you have the right coverage in the right place, a little bit of juggling around some of the battery or supplies but overall as I said I think it was pretty well handled, it didn't constrain us unduly but it did have some impact and we are seeing a little bit of that still going in the fourth quarter. So its really just a summation of a number of things, none of them that are in and off themselves that significant. Olli-Pekka?
Olli-Pekka Kallasvuo - President and Chief Executive Officer
Yes, the market has... what we experienced in the third quarter, we had a very good sort of role... we made very good progress in China when it comes to markets then also in the U.S. and some in Asia-Pacific and then Latin America and Europe, where more like flat, but I really feel our markets in fact in Europe was better in the sellout than in the sell in and in that way that really has been reflected in our channel... channel situation and in the positive manner. The... and overall the totality here is that when it comes to volumes, we went from 38 to 39, so we took market share. But then I look at another dimensional market share here, profit market share, I think we took lots more.
Alexandre Peterc - Exane BNP Paribas
Okay. Thank you.
Bill Seymour - Head of Nokia Investor Relations
Thank you very much. Ladies and gentlemen this concludes our conference call; I would like to remind you that during this conference call today, we have made a number of forward-looking statements that involve risks 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 24 in our 2006 20-F and in our press release issued today. Thank you and have a nice day.
Operator
This concludes today's conference. Thank you for participating. You may now disconnect.
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