Brisk Nokia handset sales surprise markets - give boost to share prices

Nokia has managed to increase its market share in global mobile telephone sales in the late summer. The company reported on the new situation on Thursday in a surprise announcement on developments in the third quarter of this year.
      Sales of mobile telephone handsets have been so successful that the company’s turnover and result exceed previous forecasts. The good news sparked a six percent rise in the company’s share price in Thursday’s trading in Helsinki.
     
In the early part of the year Nokia lost much of its global market share in mobile telephones. Thursday’s announcement shows that the company has managed to reverse the trend.
      The success was prompted by price cuts and brisk sales of some of its newer models.
      Nokia plans to introduce a few new models at the end of the year, which the company hopes will boost its competitive position even further.
     
Nokia’s share of the global mobile telephone market should rise to about 32% during the third quarter of this year, says Jari Honko, equity analyst at Conventum Securities. Gartner, which analyses developments in the IT sector, says that in the second quarter of this year Nokia’s market share was 29.7%.
      Nokia still has a long way to go if it is to get back to the market shares it had last year. In the autumn of 2003 Gartner estimated that Nokia held more than 34% of the worldwide mobile phone market.
      The company lost market shares early in the year when it did not have enough attractive new models.
     
The unexpected good news was rewarded on the Helsinki Stock Exchange. After a fall in early morning trading, the announcement helped push Nokia up by nearly ten percent. At the end of trading Nokia’s shares were six percent higher than on Wednesday.
      Nokia’s shares had plummeted by more than ten percent in mid-July, when the company released a grim forecast for the rest of the year. Thursday’s assessment pushed the share price to nearly the level before the July result warning.
      Jari Honko of Conventum believes that Nokia’s positive prospects could help boost the whole Helsinki Stock Exchange.
     
Thursday’s announcement did not include detailed information on trends in handset sales.
      According to the company’s analysis, sales had proceeded "well". Some analysts said that this suggests an increase of just over ten percent over the previous quarter.
      Nokia said that global sales of all makes of mobile telephones had increased somewhat from the early summer.
      Nokia’s chief financial officer Rick Simonson said that Nokia had increased its market share in Europe and Africa. Sales in Asia were seen as stable, and in North America the situation is "challenging".
      The positive trend was attributed to high demand and discipline in spending. Simonson says that the company has been able to limit spending on advertising because demand for its phones has been high in any case.


Previously in HS International Edition:
  Nokia offers clamshell models and flexibility in attempt to win back handset market share (15.6.2004)
  Gartner: Nokia market share falls below 30% - ten-point drop in European share (9.6.2004)
  The ups and downs of mobile phone fashion (30.5.2004)
  Nokia's market share falls to 29% in first quarter handset sales (29.4.2004)
  Nokia's competitors improve sales and profits in first quarter of 2004 (22.4.2004)

Links:
  Nokia press release September 9, 2004: Nokia expects to exceed its previous third-quarter 2004 guidance