Nokia Oyj Chief Executive Officer Jorma Ollila knows where his battlefield lies this year: China.
The biggest mobile-phone maker is counting on demand in the world's largest handset market to drive growth: Nokia's sales slid last year for the first time since 1991, analysts estimate.
PHOTO: AP
Motorola Inc dethroned Nokia in China in 2001 and local rivals such as TCL Mobile Communication Co are gaining ground too.
Regaining the No. 1 ranking in China may be key for the 52-year-old executive to keep Nokia's lead worldwide, analysts said.
Less than a sixth of China's 1.3 billion people own a handset, compared with seven out of 10 Europeans and half of the US population. China accounted for 11 percent of Nokia's 2001 sales.
"Nokia needs to keep up with the pace of growth in China as that's the market that's expanding," said Eija Koskimies, who helps manage about 2.5 billion euros (US$2.7 billion), including Nokia shares, at Evli Investment Management.
Nokia's sales have sputtered since 2000 following annual growth rates of 50 percent in the late 1990s. Ollila cut his revenue forecasts six times last year because new models with built-in cameras and other features failed to take off as fast as expected. Debt-laden phone companies also curbed spending and delayed faster services that were expected to spur demand.
The Espoo, Finland-based company is expected today to say fourth-quarter profit more than doubled to 1.08 billion euros, mostly because it won't repeat one-time costs, according to 10 analysts polled by Bloomberg News. It had 649 million euros of costs in the year-earlier period, mainly from goodwill impairment at its Internet and high-speed network divisions.
Sales probably rose 1 percent in the period, analysts said.
Handset sales in China last year may have reached 95 million phones, or 23 percent of global sales, analysts at Mandatum Stockbrokers estimate. Sales there will increase 14.5 percent a year through 2005, BNP Paribas Peregrine forecasts. Global sales rose 5 percent to 400 million phones last year, Nokia has estimated. Handset sales dropped for the first time ever in 2001.
China, which already counts more than 200 million mobile-phone users, is growing at the fastest pace of the world's top 10 economies. The economy expanded 8 percent last year.
Nokia's Ollila, who helped transform the former maker of toilet paper and rubber boots since taking the helm in 1992, needs to jump-start sales growth to keep meeting his profit targets, investors said. He's kept profitability at record levels for the industry, while rivals such as Motorola slumped to losses, by cutting jobs, negotiating lower prices for parts and reducing production costs.
He's also been stealing market share from rivals in most markets. Nokia accounted for more than half of European mobile-phone sales in the third quarter for the first time ever, according to Gartner Inc. It stole the top ranking in the US from Motorola in 1999.
"Nokia can't manage on Europe alone," said Miska Kuhalampi, who helps oversee more than 600 million euros at Aktia Asset Management.
Nokia, which sells more than every third handset worldwide, isn't alone in targeting China. Its biggest competitor, Motorola, chose Shanghai to unveil eight new phones with cameras and color screens earlier this month.
"Everyone is looking at China; it's a hotbed of competition," Tom Masci, Asia Pacific president of Motorola's cell-phone division, said in an interview in Shanghai.
Asian rivals are another threat, including Samsung Electronics Co., the world's No. 3 mobile-phone maker, and TCL, China's biggest mobile-phone maker, Masci said.
Seoul-based Samsung last week said fourth-quarter profit almost quadrupled, boosted by sales of high-margin phone and chips. Motorola on Tuesday said it had a fourth-quarter profit of US$174 million, its first consecutive profit in two years.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique