Nokia’s Mobile Market Shrinks

The world’s biggest mobile phone maker, Nokia, has seen its market share shrink as second quarter sales were down five per cent to 6.6bn euros on a year ago.

The Finnish company said it estimated its market share in the May to June period was 31pc, down from 32pc in the first quarter of the year.

Pre-tax profit was up 9.5pc year-on-year at 1.04bn euros, but Nokia said profits would be under pressure later in 2004.

Nokia has been cutting prices in order to remain competitive and now it has warned profit margins would remain under pressure until its product portfolio was stronger.

“During the second quarter, we employed pricing selectively with certain products to stabilise our mobile market share,” said Jorma Ollila, chairman and CEO.

“This pricing strategy impacted sales and operating margins in the second quarter.”

The news came on the same day as rival Sony Ericsson posted a 34pc rise in second quarter profits.

Nokia’s share of the global mobile phone handset market fell sharply in the first three months of the year. According to market research group Gartner it fell to 28.9pc from 34.6pc in the same period in 2003.