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Sat, Sep 11, 2004 - Page 12 News List

Nokia gets first glimmer of good news in months

GROWTH Although sales are rising, analysts said it was too early to say if the company could fend off rivals viewed as having more desirable phones


Nokia, which issued a rare profit warning earlier this year amid competition from its rivals, predicted on Thursday that its third-quarter revenue and profits would be better than expected due to growing mobile phone sales, the first glimmer of good news for the besieged cellphone maker in months.

The world's largest mobile phone maker said that for the quarter ending Sept. 30, earnings per share would be between US$0.13 and US$0.16, compared with a previous estimate of US$0 to US$0.12 a share.

Based on sales during July and last month, Nokia also said its revenue for the period would likely be US$8.3 billion to US$8.4 billion. In July, the company predicted its sales wouldn't top US$8.2 billion for the third quarter.

The announcement pushed the Finnish company's shares up 6.2 percent to close at US$13.60 on the Helsinki Stock Exchange. But analysts cautioned it was far too early to say if Nokia was in a position to shore up its market share and fend off rivals viewed as having more stylish and desirable phones.

"This was good news for Nokia, but the competition is tough out there, much tougher than before," said Jussi Hyoty, chief analyst at FIM Securities. "And if Nokia wants to achieve the same overwhelmingly strong position it had earlier, which would be very difficult, then it really needs groundbreaking new models and clear alternatives."

Just last year, Nokia said it wanted to reach a 40-percent share of the global market, but its hopes were dashed by rivals Motorola, Samsung, LG and Sony Ericsson, all of whom came out with models that consumers desired and undercut Nokia's share.

Since then, Nokia chief executive Jorma Ollila has made it a priority to regain that clout with new models boasting better camera phones, easier connectivity to e-mail and the Internet and trendier designs.

Nokia said its own figures showed handset sales worldwide for the industry were up to an estimated 148 million. It expects that market to continue grow in Europe, the Middle East and Africa, but hold steady in Asia and the Americas.

Nokia is the bellwether of the mobile phone trade and still sells more than twice as many phones as its leading rival, US-based Motorola. But that wasn't enough stem market loss. Analysts have blamed Nokia for a lack of catchy designs and innovative new models -- like the hugely popular folding "clamshell" models -- and partnerships with operators.

Gartner Inc said in June that the Finnish company's global market share in mobile phones dropped to 28.9 percent in the first quarter of this year from 34.6 percent a year earlier.

Last week, however, Gartner said Nokia sales had again picked up and that it reached 29.4 percent of the global market in the second quarter of the year.

It has introduced models like the 6230, which boasts a camera, video recorder and FM radio.

Another high-end model, a clamshell 6260 with a swiveling flip, has a video recorder, Web browser, e-mail and VPN, with Bluetooth network and an optional wireless keyboard.

In Shanghai on Thursday, Nokia unveiled three more handsets from its fashion collection, all inspired by 1920s styling and design, featuring the Nokia 7260, 7280 and the clamshell 7270, that blend old world art deco with an edgy, modern day twist.

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