Nokia Handset Sales Up - Optimistic Prospects

Nokia says that its fourth-quarter net sales decreased by 1% to US$11.12 billion, compared to fourth quarter 2002. However, at constant currency, group net sales would have been up by 8% year on year.

In the fourth quarter, Nokia Mobile Phones net sales climbed 4% year on year, reaching US$8.8 billion. Sales continued to be strong in low penetration markets such as India, Brazil and Russia. On a regional level, the Americas had excellent sales growth and the Europe/Middle East/Africa region had solid growth, while sales in the Asia-Pacific region declined slightly. At constant currency, Nokia Mobile Phones net sales would have increased 15% year on year.

Nokia Networks net sales declined 18% year on year and were US$2.15 billion in the fourth quarter, exceeding their earlier expectations, primarily because of especially strong year-end investments from operators. Sales declined in all three geographical regions, Europe/Middle East/Africa, the Americas, and Asia-Pacific. However, sales growth was strong in China. At constant currency, Nokia Networks net sales would have been US$2.28 billion.

Nokia says that it suffered a significant impact caused by the weak US dollar, which depreciated by about 17% against the euro in 2003.

Jorma Ollila, Chariman and CE commented that "2003 was a record year for the mobile handset industry and for Nokia Mobile Phones. With volume growth of 16%, the mobile phone market achieved record volumes of 471 million units for the year, and culminated in high fourth quarter volumes of 145 million units, according to our preliminary estimates. Nokia Mobile Phones reached not only record profits, but also higher-than-ever sales and volumes. In addition, we managed to slightly increase our mobile phone market share to just above 38% for the full year. This is a remarkable achievement from the Nokia team."

"In addition to the mass-market adoption of more advanced phones, there was strong growth in emerging markets. Low penetration markets, such as India, Brazil and Russia, experienced significant volume growth, and Nokia Mobile Phones built on its leading position in many of the high growth and emerging markets." Ollila added.

Nokia and industry mobile phone volume growth robust in Q4 and 2003 For the fourth quarter 2003, overall mobile phone market volumes are estimated to be about 145 million units, a 23% increase year on year. Nokia achieved a record volume of 55.3 million units, a 20% increase year-on-year and a 22% increase sequentially, resulting in an estimated 38% market share in the fourth quarter.

According to Nokia's preliminary estimates for the full year, Nokia Mobile Phones volume growth of 18% was faster than the market volume growth of 16%. Nokia's market share reached slightly above 38% with Nokia Mobile Phones volumes of 179.3 million units in a global market of an estimated 471 million units. Year-on-year market volume growth was 20% in Europe, 17% in the Americas and about 11% the Asia-Pacific region. Nokia continues to aim for 40% market share in the mobile device market.

In 2003, the company estimates the number of global mobile subscribers has grown to 1.3 billion and forecasts this number to reach two billion in 2008.

Nokia continues to expect that mobile device market volumes will grow somewhat over 10% in 2004. Volume growth in mobile devices in 2004 is expected to come from increased penetration in growth markets and ongoing upgrades in developed markets.

In 2004, the network infrastructure market is expected to be at the same level as 2003 or slightly up, in euro terms.

Nokia believes that 2004 will be the year of full-scale commercialization of 3G WCDMA. By the end of 2004, Nokia expects that more than 50 WCDMA networks will have been launched and that a large number of WCDMA handsets from different vendors will be available."

Posted to the site on 23rd January 2004