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Wed, Nov 26, 2003 - Page 12 News List

Nokia projects cellphone sales will rise, but revenue may drop

AP , IRVING, TEXAS

Nokia says mobile phone sales will rise about 10 percent next year, but the industry leader isn't sure whether that will translate into more revenue.

The catch is, average billing prices have been dropping as Nokia sells more cheap phones into emerging markets such as China but not enough high-priced models to US and European consumers.

The company said on Monday at an investors' conference that its long-term goal is to raise annual net sales by 10 percent.

Last month Nokia announced a restructuring, and chairman and chief executive Jorma Ollila offered more details on Monday about the changes including more emphasis on selling to corporations and making phones with multimedia features such as games, photos and music.

"This is an area where we know we can really make it big," Ollila said. "There are tremendous growth opportunities, and we have know-how."

Multimedia phones account for only about 10 percent of Nokia's sales now.

Ollila said the restructuring will give Nokia -- already the world's largest cellphone maker -- a better shot at the US$235 billion market.

Nokia did not give the investors new guidance on future earning. Ollila told reporters that revenue was difficult to predict because of uncertainty about currency rates and average phone prices.

US-traded shares of Nokia had picked up before the conference, apparently on speculation by an analyst that the company would raise its sales forecast.

The shares closed Monday down 10 cents, at US$17.69 each on the New York Stock Exchange.

Cellphone sales soared in the late 1990s, but manufacturers have struggled the past two years as consumers, burdened with a sluggish economy, have been reluctant to buy fancy new models.

Nokia's US-traded shares have lost more than two-thirds of their value since mid-2000.

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