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Nokia gains market share but lowers revenue forecast

Nokia said yesterday that brisk sales of its low-end phones would bring it market share gains in the fourth quarter, but that it could miss its earlier revenue target.

Seasonal handset sales are strong, but users are choosing the cheap mass-market phones and not the more expensive feature-rich units. Fourth-quarter revenue at Nokia was expected to be between €8.8bn (£5.6bn) and €9.0bn, at the lower end or slightly below the earlier guidance of between €8.9bn and €9.2bn.

Nokia expected "significant market share gains" in the fourth quarter compared with the third quarter, bringing it closer to its aim of 40% market share. Nokia held 35.9% of the worldwide market in the third quarter, according to Dataquest.

The company reiterated its forecast that 400 million handsets will be sold worldwide this year. That forecast is below that of Dataquest, which late last month said it expects between 415 million and 420 million phones to be sold in 2002. Last year about 380 million phones were sold.

Fourth-quarter revenue at Nokia Networks, the division selling mobile telephony networks to operators, will increase sequentially and were likely to include recognition of about €400m in revenue from sales of third-generation equipment, Nokia predicted.

However, pro forma operating margins for Nokia Networks are now estimated to be nil for the fourth quarter. In October, Nokia predicted the operating margin of its networks division would remain at the third-quarter level of 5.2%.

Pro forma operating margins at Nokia Mobile Phones for the fourth quarter were expected to exceed the 22% level of the third quarter.

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