Nokia sees 85% profit growth

 

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Posted on 19 Oct 2007 at 08:28

Nokia has announced better than expected profits in the third quarter, up 85% from last year to 12.9 billion Euros. Much of the rise is due to high demand for cheaper handsets.

Although average phone prices fell, the volume of sales rose and profit margins improved thanks to tighter cost controls. As a result the company says its earnings per share for the three months rose to 0.40 euros from 0.21 euros in the same period of 2006.

Nokia sold 112 million phones in the quarter, more than its three closest rivals combined, as consumers in emerging markets rushed to buy Nokia's ultra-cheap models.

"The sub 30 Euro segment grew very nicely," says chief executive Olli-Pekka Kallasvuo. "We are quite strong in that segment."

The Finnish company has a strong lead in emerging markets including China and India, which it has been fiercely defending.

With about 8 million new clients signing up for mobile telephony each month in India alone, the world's leading cell phone makers are falling over each other to woo first-time buyers with low-priced handsets.

"We are having a lot of growth in new subscribers in places like India and China, Indonesia, we are seeing Africa come on in a big way," says Nokia chief financial officer Rick Simonson.

Nokia says its global market share has now risen to 39 percent.

The results come two days after Ericsson, the world's biggest maker of mobile network equipment, reported a surprise drop in third-quarter results due to weaker demand in its networks upgrade business.

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Author: Reuters & Matthew Sparkes