Nokia publishes 3Q result - announces major marketing effort

Jorma Ollila

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Nokia plans to invest more in the marketing of its brand and its products. CEO Jorma Ollila made the announcement on Thursday as the company released its third quarter results. Last year Nokia spent EUR 2.6 billion on marketing, which is nine percent of the company’s turnover.
      Ollila said that the focus on marketing is not a passing phase for Nokia. The aim is to make sure that the company’s brand and its products have sufficient visibility worldwide.
      "More new products are coming onto the market than a few years ago. It is quite natural that the marketing effort for those products will increase", Ollila says.
     
A number of new Nokia products are to be introduced at the end of this year, and sales of handsets are expected to break previous records. The company calculates that 180 million handsets will be sold in the October - December period, which is about ten percent more than in July-September.
      Handset sales have grown so much this year that more were sold in the third quarter than during last year’s record Christmas season.
      Nokia estimates global handset sales in July - September to have been 158 million - of which its own share was 51.4 million, or 33%.
      This means that the Finnish company regained some of the international market share that it had lost earlier in the year - in spite of a shortage of components.
      "We are pleased at the way we have been moving forward month by month since May", Ollila said.
     
In the early part of this year Nokia lost a good deal of its international market share.
      Although Ollila expects an improvement in the remaining months of the year, he will not give any predictions on market share development.
      The company still has a long way to go to get back the position it had a year ago. At that time Nokia reported its market share at 38%.
      Mobile phone sales are expected to grow next year, but Ollila says that only the Christmas season will be a sufficient indicator for predicting the growth dynamic of the early part of 2005.
     
The third quarter result itself did not contain any great surprises. Nokia’s turnover of EUR 6.9 billion and its result of EUR 0.14 per share were slightly better than analysts had expected. Operating profit was down by around 20% to EUR 928 million (from EUR 1,154 million), with operating margin at 13.4% (16.8%).
      On the Helsinki Stock Exchange Nokia’s share price dipped slightly at first, but later rose by more than one percent.
      Meanwhile, Nokia’s rival Sony Ericsson reported a record result on Thursday, with pre-tax profits of EUR 136 million for July-September.


Previously in HS International Edition:
  Nokia introduces 3G phone model tailor-made for TeliaSonera (14.10.2004)

Links:
  Nokia press release: Nokia reports third-quarter 2004 net sales of EUR 6 939 million, EPS EUR 0.14
  OMX real-time share prices

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