Nokia Corp expects the total market for mobile phones in 2004 to grow 10% over the 471 million it estimates were sold last year, and said it is looking to increase its market share above the 38% it claims it achieved in 2003.
Boosted by an unexpected recovery in its networks operation, Nokia said net income in the fourth quarter to December 31 rose 8.8% to 1.3bn euros ($1.5bn) on revenue 0.6% lower at 8.8bn euros ($11.2bn). For the year, net income increased 6.2% to 3.7bn euros ($4.6bn) on revenue that fell 1.9% to 29.4bn euros ($37.4bn).
It said phone sales in the current quarter are expected to rise by 3% to 7% buoyed by an increase in selling prices as consumers upgrade to more sophisticated phones. It also said sales of its networks equipment will be flat to slightly up this year, a pessimistic assessment given indications that the market is recovering.
The company said its 2003 performance was hit by a 17% slide in the value of the dollar against the euro over the year and said that at constant currency its sales would have grown by 7% and mobile phone sales would have risen by 12%. Even so, operating income of 1.7bn euros ($2.1bn) on mobile phone sales of 7bn euros ($8.9bn) gives a healthy margin of 24.4%.
CEO Jorma Ollila said Nokia aims to outpace expected handset market growth of over 20% in the first quarter so its market share could soon be approaching 40%. With Motorola hobbled by late delivery of handsets, Nokia is now the largest supplier in the US market and is increasing global CDMA market share.
It said it is not only in a strong position in emerging markets such as India, Brazil and Russia, but is also is well-placed at the high end of the market. Half of its handset sales in the fourth quarter had color screens, and it has the broadest range of camera phones as customers look for extra features as they upgrade.
Meanwhile, Nokia is expected to invest over 50m euros ($63.5m) by September to expand its handset manufacturing unit in Hungary, according to state news agency MTI. The new unit will employ 500 workers to bring total employment at the plant to around 2,500.
This article is based on material originally published by ComputerWire