Nokia ships more handsets but profits drop by 28%
Nokia s mobile phone sales rose by 2% year on year, reaching EUR 5.5 billion, even though shipment volumes increased by 14%. Sales were adversely affected by a weak US dollar and, to a lesser extent, an increased proportion of lower-priced entry-level phone sales in emerging markets such as India.
Strong net sales growth in Europe was virtually offset by somewhat lower sales in Asia Pacific and substantially lower sales in the Americas.
Nokia expects its third-quarter mobile phone volumes to grow by well over 10%, representing faster-than-market growth, with strong profitability continuing. However, the value of sales in the third quarter is expected to be flat or slightly down year on year, largely due to a major depreciation of the US dollar, compared with the same period in 2002.
The company estimates that its market share for the second quarter has grown to 39%, mainly driven by market share gains in the US.
Nokia estimates that a total of 105 million handsets were sold in the second quarter of 2003, an 11% year on year increase. Nokia itself shipped 41 million units, giving it a market share of 39%.
The company continues to predict that handset shipments will grow by approximately 10% in 2003 to around 445 million units, compared to 405 million in 2002.
Jorma Ollila, Nokia s chairman and CEO, referred to the Nokia 6650, the company s first 3G WCDMA phone, as being strategically important not only for Nokia but the entire industry. "It was the culmination of our industry s largest ever field-testing exercise, a prolonged and exhaustive project, using 20,000 phones in almost every WCDMA network in the world," said Ollila.
