WSJE(11/28) UPDATE:Nokia Expects Modest Sales Growth In 2002
By DAVID PRINGLE
check the bold, LOL- Caxton
Staff Reporter
Nokia Corp. forecast that sales of mobile phones world-wide for the entire industry will grow by a modest 10% to 15% in 2002 after declining this year, damping hopes of a rapid recovery for the handset industry.
After forecasting in the spring that between 450 million and 500 million handsets would be sold globally in 2001, Nokia, the market leader, has steadily revised those figures downward, and Tuesday it cut its forecast for 2001 to 380 million from the 390 million it predicted in October. It also said Tuesday that it expects unit sales next year to climb to between 420 million and 440 million, compared with analysts' forecasts of about 450 million. Nokia's market share in the third quarter was 33%, according to U.S. research firm the Gartner Group.
Olli-Pekka Kallasvuo, chief financial officer of Nokia, told analysts in New York Tuesday that the company expects revenue in both its mobile-phone division and its network infrastructure division to increase 15% next year with "continuing good profitability" across the group. That is a relatively modest performance for a company that saw sales grow by 54% in 2000, but it is better than the 1.6% increase Nokia is expecting to notch up this year.
Nokia's American depositary receipts were down 4% to $24.23 (27.52 euros) in New York Tuesday afternoon.
Nokia said its forecasts were based on a slightly conservative view of the global economy. "A rebound of some sort will happen towards the end of next year," said Jorma Ollila, chief executive officer of Nokia, in New York. "There will be no good news from Europe in the next nine months."
The global market for mobile network infrastructure will be flat to slightly positive in 2002, Nokia said, but it expects to benefit from a trend among operators in North America and South America toward using wireless technology based on European standards.
In New York, Nokia also fleshed out more details of its push into mobile software and services. It said that its Club Nokia portal, which allows owners of handsets running compatible software to download games, ring tones and graphics, now has 10 million members, compared with five million in the spring of this year. Nokia, which has been promoting the service extensively, is aiming to increase that number to 50 million by 2004 and forecasts that Club Nokia, which now sells some of its services, will yield 1 billion euros in revenue in 2004. Nokia currently doesn't report Club Nokia revenue, as the Finnish company has only just started charging for some of the services.
Some mobile-phone operators, Nokia's primary customers, have voiced concerns that Club Nokia competes with their own services. But in an interview last week, Mr. Ollila said he had reassured operators that their services, not Club Nokia, will "be the main show." Nokia said Tuesday that the mobile data market as a whole, including messaging, is expected to bring in 283 billion euros in 2006 compared with 27 billion euros this year.
Still, analysts believe that Nokia's brand, which was ranked the fifth most valuable in the world by marketing consulting company Interbrand earlier this year, often overshadows that of operators'. Mr. Ollila acknowledged that some operators are uncomfortable with that. "The strength of the brand is there, it will be, but I don't think it will change the fact that the operator will have the user," he said in the interview.
In any case, some analysts believe that Nokia's latest forecasts suggest that it is losing market share, and that its own numbers are making it too conservative about the industry. Per Lindberg, a London-based analyst with Dresdner Kleinwort Wasserstein, said in a research note that he attached "little credence" to the company's forecast that only 380 million phones will be sold this year. "There is little doubt that Nokia is gradually losing its competitive edge," he wrote.
Nokia's market share in the third quarter was 33.4%, down from 34.8% in the second quarter, according to U.S. research firm the Gartner Group.
Nokia forecast in October that 10 million GPRS, or general packet radio services, phones, which can maintain a continuous connection to the wireless Internet, will be sold by all makers this year, but this figure now looks optimistic given the sluggish rollout of handsets. The world's largest operator, Vodafone Group PLC, said two weeks ago that it had only sold 50,000 GPRS handsets across Europe.
But Mr. Kallasvuo, Nokia's CFO, said that the new forecast of handset sales for 2001 was primarily based on revisions of the numbers for the first three quarters, rather than a gloomy outlook for sales for the fourth quarter. |
