Money managers are skeptical, and analysts, including those at Morgan Stanley Dean Witter & Co., have already lowered their global handset forecasts for this year to about 410 million units. Ollila in December predicted unit sales of as much as 440 million for this year.
"There has been a lot of corporate spin in forward-looking statements recently," said James Clunie, who helps oversee US$4 billion as head of global equities at Aberdeen Asset Management, including Nokia shares. "You have to do your own analysis."
Signs are increasing that Ollila, who last year cut his sales forecast in five steps by a total of 31 percent, will have to reduce his prediction again, maybe as early as today.
RadioShack Corp, the US retailer, and Dixons Group Plc of the UK have said holiday sales didn't meet their expectations. RF Micro Devices Inc, a Nokia supplier, last week released a first-quarter sales forecast below analysts' predictions.
Balda AG, Europe's third-biggest maker of handset covers, this month lowered its sales forecast for last year. And Timo Leinilae, the CEO of Perlos Oyj, a bigger Balda rival, Friday said it's too early to say by how much demand will rebound in the second half.
Nokia shares, which rallied 80 percent from a Sept. 10 low, have fallen 15 percent so far this year. Some investors say the stock, which trades at 35 times expected 2002 earnings, is probably still expensive considering the outlook.
"Technology valuations look super-high," said Clunie.
"We're not off to races on the economy, but the stock markets have been priced as if we were, which is dangerous."
Nokia has yet to convince investors that consumers will buy handsets offering fast Internet access when phone service providers are delaying the rollout of the new networks.
"Based on retail news it is difficult to be very bullish on mobile phone sales," said Arnold Gast, who helps manage about US$5 billion at Theodoor Gilissen Bankiers NV and has Nokia shares.
Ollila, whose income from stock options fell to 8 million euros from a combined base salary and options package of 50.6 million euros a year earlier, declined to be interviewed.
RSS