[ FINNISH Phone Giant Nokia Will Report Encourag... ]

FINNISH phone giant Nokia will report encouraging fourth-quarter results on Thursday. Increased competition and squeezed margins in the volume handset market have been offset by strong sales of Nokia’s high-end multimedia phones. “Multimedia is the star of 2005,” predicts Nomura telecoms analyst Richard Windsor.

Nomura estimates Nokia’s sales for the final quarter at more than E8.1bn ($10.53bn, Pounds 5.67bn), against E6.94bn in the third. Pre- tax profits are set to rise to about E1.27bn from just over E1bn in the third quarter. The biggest growth is predicted to be in multimedia phones, where sales grew from E914m to more than E1.57bn quarter-on-quarter. Nomura says full-year sales of multimedia phones will rise from about E4bn in 2004 to E5.7bn in 2005.

“We believe that increasingly it will be the multimedia division that will be responsible for delivering earnings growth and margin stability,” said Windsor. “Given the high prices of Symbian phones, Nokia’s 80% share of this segment and highly developed platform strategy, we think this division will report higher profitability in 2005 than the mobile phones division.” Nokia is hoping high-end phones will be its salvation. Consultant IDC says Nokia’s market share fell from about 38% worldwide in 2003 to 30% in the first nine months of last year.

n This week, the City expects the world’s largest mobile operator, UK-based Vodafone, to announce between 4.4m and 4.6m net customer additions for the final quarter.

Tony Glover

Technology Editor