Nokia set to report earnings boost

The world's top cellphone vendor Nokia is set to report a rise in fourth quarter earnings on Jan 24, boosted by buoyant demand for cheap phones in emerging markets and strong holiday sales in Europe.

Nokia and other large cellphone vendors likely increased their market share in the quarter at the expense of struggling US vendor Motorola, analysts said.

Nokia's Q4 earnings per share minus one-offs are expected to rise 47 percent from a year ago to 0.44 euro, according to the average forecast from a Reuters poll of 34 analysts.

The Finnish company has a strong lead in emerging markets including China and India, which it has been fiercely defending. With more than 8 million new customers signing up for mobile phones each month in India alone, the world's leading cellphone makers are falling over each other to woo first-time buyers with low-priced handsets.

Nokia is expected to have sold 130.7 million phones in the quarter, more than its three closest rivals combined, and giving it a market share of 39.5 percent.

Good demand in Western Europe and United States is expected to have helped lift the global market by 14 percent from a year ago to 331 million phones, the highest ever number for the quarter.

"Preliminary numbers for the fourth quarter show good sales," said Gartner analyst Carolina Milanesi.

"Despite fear of recession in North America it appears that sales were up from the third quarter, the same in Western Europe where the market was driven by Britain, Germany and France," Milanesi said.

Nokia's multimedia unit, which sells advanced phones targeted more at consumers in the developed world, is expected to double its operating profit from a year ago.

Four out of five of the world's top cellphone vendors are expected to have increased their market share in the holiday sales-fueled quarter at the expense of Motorola, which is still recovering from the hangover caused by its hit model Razr.

Motorola fell to losses in 2007, lost its second spot on the market to South Korea's Samsung Electronics and replaced many of its top managers.

"Motorola's share of the market steadily declined in 2007. It faces a tough challenge in 2008 as it seeks to re-invigorate its product portfolio," said Ben Wood, research director at CCS.

Wood said Sony Ericsson, and South Korean handset makers Samsung and LG Electronics were among the winners in the last quarter of the year.

Agencies

(China Daily 01/15/2008 page17)