Nokia grows phone market share in better-than-expected quarterly results

By Matt Whipp

Posted on 14 Oct 2004 at 16:43

Nokia has announced its third quarter results, beating expectations and growing market share, but showing a decline in revenues from mobile phones after a price cuts pushed through in the previous quarter.

Nokia's mobile phone unit showed sales of 4.43bn Euros, down 13 per cent year on year from 5.12bn Euros. Profit margins too were squeezed by the price cuts, down from 28.8 per cent to 18.6 per cent year-on-year. However, better figures from the company's multimedia, networks and enterprise units pushed overall sales by one per cent to 6.939bn Euros.

President and CEO Jorma Ollila pointed out that the Finnish giant was clawing back at its once mighty market share, growing to 33 per cent according to its own reckoning. But despite strong gains on home turf in Europe and maintaining top dog status in China, elsewhere the rejuvenation was not so pronounced.

'We made substantial market share gains in major Western European markets and maintained our leadership position in China. However, in the US we lost market share during the quarter, and despite strong sales growth, our market share in Latin America was down slightly from the second quarter 2004,' he said.

He said the current market was heavily weighed towards emerging territories where the demand is for high volumes of entry-level handsets. Although Nokia showed strong sales for its more expensive mid-level phones, this was not enough to balance this current skew towards the run on cheap phones.

The story was somewhat different for Sony Ericsson as it recorded sales up 29 per cent to 1.7bn Euros, driven by demand for its more expensive high end phones. This may also reflect the relatively nascent state of the feature phone market a year ago.

Nokia, for its part, expects the mobile market to grow in the fourth quarter, with a full year tally of 630 million handsets shipped. Although it expects component shortages to continue to impact the market, it has put its own estimates for Q4 with sales between 8.4 and 8.6bn Euros and earnings per share of between 0.16 and 0.18 Euros - ahead of Wall Street analysts who predict $0.19 (0.22 Euros) for Q4.

Early trading on the New York Stock Exchange pushed Nokia shares up more than 2 per cent to $14.30.