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Nokia expands lead over rivals

CONTINUED GAINS The company's market share rose in the fourth quarter, helped by a rise in sales of entry-level phones and a recovery in the US market

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Nokia Oyj, the world's largest maker of mobile phones, widened its lead over competitors such as Motorola Inc in the fourth quarter, helped by demand in Asia and an improved product offering in Europe and the US.

Nokia's market share rose to 35 percent last quarter from a revised 32.5 percent in the previous three-month period and 33 percent a year earlier, researcher Gartner Inc said yesterday in a release.

The share of Motorola, the world's No. 2 handset maker, slid to 17.8 percent from 18.7 percent in the third quarter.

Espoo, Finland-based Nokia is gaining market share from Samsung Electronics Co and Sony Ericsson Mobile Communications Ltd with entry-level phones in developing markets, where most of the growth is generated. The company also recovered in North America, where it took the No. 2 position behind Motorola, up from fourth place earlier last year.

Nokia "did well all around," said Carolina Milanesi, an analyst at Gartner's UK office, in a telephone interview. "They had a great quarter in China, a great quarter in India, and in Europe they are now more than twice as big as their closest competitor."

Global mobile-phone unit sales rose 20 percent in the fourth quarter to 235 million units from a year earlier, according to Stamford, Connecticut-based Gartner.

Sales this year will probably increase as much as 15 percent from 817 million units sold last year. That will be up from 674 million units in 2004.

Unit sales at Nokia rose 28 percent to 82 million in the quarter from 64 million a year earlier, Gartner said.

Nokia has cut prices on low-end phones and added features and new designs to high-end devices to spur revenue growth and win back market share, which reached a five-year low in early 2004.

The price of a Nokia handset fell to an average 99 euros (US$117) in the fourth quarter from 102 euros in the third quarter, Nokia said on Jan. 26. Nokia projects prices will be "flat to slightly down" in the first quarter from the previous period.

"A lot of the growth we're seeing in 2006 and beyond will come from emerging markets," Gartner's Milanesi said.

"Margins will get tighter because of the price war we're seeing in the low end, and smaller players will suffer," she said.

Nokia and Schaumburg, Illinois-based Motorola are also adding features like high-resolution cameras and music players to lure US and European buyers and limit the effect of falling prices.

In the fourth quarter, Motorola sold 42 million phones, up from 32 million a year earlier, helped by sales of the Razr model.

The market share of Suwon, South Korea-based Samsung, the third-largest handset maker, fell to 12.1 percent from 12.2 percent a year earlier. Seoul-based LG Electronics increased its market share to 7.2 percent from 6.8 percent a year earlier.

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