Nokia Sees Mobile Phone Growth of Only 10% in 2007
January 29th, 2007Finnish handset maker Nokia has announced its forecast for the 2007 global handset market. The Helsinki-based giant said that it believes that the number of mobile phones sold worldwide will rise by only 10% during this year. Nokia’s forecast represents a sharp slowdown from the estimated 26% growth in the global mobile phone market during 2006. Over the whole of last year a total of 978 million mobile phones were sold.
The predicted slow-down seems all the more surprising as Nokia itself managed to ship 106 million phones in the final three months of 2006, this represented a 26% rise on its 2005 figure. Nokia reported that the average selling price for one of its phones fell from euros 93 to euros 89 during the fourth quarter, this compares to an average selling price of euros 99 one year ago.
The company said these figures reflected both the fight for a higher share of sales in emerging markets as well as weaker sales of some smart-phones and other high-end handsets.
Total sales at the mobile devices division in the fourth quarter were up 14% to reach euros 7.1 billion, while operating profit shot up 19% to euros 1.3 billion. Multimedia product sales rose by only 6% which the company said was largely down to delays on new phones.
Nokia Networks seems to have fared better, sales at this division rose 12% to euros 2.18 billion. This rise was mainly fuelled by growth in Africa and the Middle East. However, operating profit dropped 52% to euros 129 million due to costs for setting up the joint venture with Siemens and pricing pressure as the company looks to capture more market share. Start-up of the Siemens venture is still pending the completion of a compliance review and regulatory approvals, but this is expected in the first quarter.
The company’s total sales for the final quarter of 2006 grew by 13% from the same period in 2005, to euros 11.7 billion. Operating profit was up 11% to euros 1.52 billion, while net profit grew to euros 1.27 billion, up from euros 1.07 billion one year before.
