Nokia increases mobile phone market share

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According to its positive profit warning, released on Monday, the world’s largest mobile phone manufacturer Nokia expects its share of the global device market to increase sequentially in the second quarter of 2007 from its estimated 36 per cent share at the end of the first quarter.
      The company’s market share is likely to grow by several percentage points, and after the announcement, Nokia’s stock price began a rapid rise. At the end of the day, the share showed an increase of 3.9 per cent, reaching its highest level since February of 2002.
     
In Nokia’s previous report, on April 19th, the future market share was estimated to remain more or less unchanged.
      In Nokia’s view, the fact that the the excessive number of devices put on the market by certain competitors have now been sold will make it easier to sell mobile phone handsets in the course of April through June. By the excessive number of devices, Nokia primarily means Motorola mobile phones. Motorola was believed to be attempting to respond to large inventories by underpricing its phones.
      Nokia states further that the company did not follow Motorola in price competition.
      "It would not be smart to increase sales by reducing prices. Our pricing policy has been the same as before", commented Rick Simonson, the Chief Financial Officer of Nokia, at the Mobile Exhibition in New York, according to the international news agency Reuters.
     
The world’s second largest mobile phone manufacturer Motorola sold its devices at low prices at the end of last year, filling up the retailers’ warehouses.
      These dumped devices have been sold off over the early months of the current year.
      Analyst Jari Honko of EQ Bank believes that Nokia's announcement is likely to remove the tensions prevailing on the market of how soon Motorola’s low-price devices have been sold off.
      In its profit warning on Monday, Nokia stated that the company will continue its efforts to increase its device market share even over the current year.
      Jari Honko is pleased that Nokia is giving such a signal also for the second quarter. Previously Nokia has made attempts to maximize its profitability and cash flow, while now also the market share will be included in the company’s efforts, Honko said.


Previously in HS International Edition:
  New Nokia board member says mobile phones can bring bank access to rural poor (4.5.2007)

Links:
  Press release: Nokia increases its second quarter 2007 device market share outlook (May 14, 2007)

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