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Nokia blames prices for profit fall

Erstwhile handset supremo still suffering

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Nokia says falling handset prices are responsible for falling profits at the Finnish firm.

For the quarter ended 30 September 2004 the firm sold 51.4m handsets. Net sales grew one per cent to €6, 939m and operating profit fell 20 per cent to €928m. Operating margin was 13.4 per cent, down from 16.8 per cent for the same period last year.

Net sales of mobile phones were €4,429m - 13 per cent lower than in 2003. Enterprise Solutions did better, increasing sales by 52 per cent to €172m.

Jorma Ollila, chairman and chief executive of Nokia, said: "The replacement market in Europe and North America, as well as markets with relatively low mobile penetration rates such as Latin America, continued to be the major contributors to this volume growth." He said shortages of components had hit overall volumes.

Ollila is optimistic about the upcoming quarter: "We expect continued strong growth in global mobile device market volumes in the fourth quarter, even as compared to the remarkable final quarter in 2003, and now estimate that the 2004 total market volume will be approximately 630 million units."

Nokia estimates it has 33 per cent of the "mobile device market" worldwide. Market share grew in western Europe, but fell in the US and Latin America. It believes 158m mobile devices were shipped in the quarter.

At the end of the period Nokia employed 54,783 people against 51,359 people on 31 December 2003. The firm has been criticised for being slow to offer camera phones and clamshell designs.

Details at the Nokia website here. ®

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