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Phone biz booms, but Qualcomm rues Euro cabal

Nokia rings ups the profits

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Roundup Nokia reported a net profit of €1.273bn in Q4, €4.3bn for 2006 on sales of €11.7bn for the quarter, and €41.1bn for the year today. That's up 13 per cent and 19 per cent respectively, year on year.

Nokia's phones division contributed 7bn to the quarter, however profits in the $2bn-turnover networks division fell sharply ahead of the merger with Siemens announced last June. Nokia took a hit of €128m in the year for bailing out of the CDMA business. Operating margin for the phones division was 13 per cent.

Siemens CFO said today he now expects to close the merger of the former Commmunications with Nokia before the end of Q2.


Qualcomm also benefited from higher demand. The semiconductor chipset and licensing business saw earnings grow five per cent year on year, to $648m, with revenue up 16 per cent to top $2bn.

The company said that its legal battles, including a long-running epic against Nokia, would cut into profits. Nokia's license is due to expire on April 9, and if there's no new deal, Nokia will stop paying royalties.

Qualcomm president Steve Altman said the companies challenging the W-CDMA (UMTS) royalty split - including Nokia, Ericsson and TI - represented "an orchestrated attack" on the company.

Altman said the six have been referring to themselves as "Project Stockholm".

"Yeah, it's a super-secret society, and the only reason to gather is to stick pins in a Paul Jacobs doll."


Global mobile phone shipments topped 1 billion last year, according to research firm Strategy Analytics, a 25 per cent in crease over the previous year.

Nokia has clawed back much of its lost market share, reaching 35.2 per cent in the final quarter. Falling prices pegged its margin to 15 per cent (it's actually lower, as Nokia revealed today). Motorola's shipments grew 47 per cent during the final quarter, although it was clobbered by the markets after its margin fell to just 4 per cent. Moto maintained second place with 21.9 per cent in Q4. Samsung is losing out to rivals Sony Ericsson and Motorola in the feature phone market, and to Nokia at the high end, and while its market share (10.7 per cent) saw it claim third place, it was overtaken in dollar value sales by Sony Ericsson (8.7 per cent in Q4).

Strategy Analytics predicts 1.15bn phones will ship this calendar year, 12 per cent higher than 2006. ®

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