Nokia upbeat on Asian growth despite global woes
itmatters.com.ph
MANILA, PHILIPPINES | Tuesday, June 18, 2002
SINGAPORE -- The Asia-Pacific region is set to consolidate its position as the leading source of growth for the world's biggest telecom equipment maker Nokia, a senior executive of the company said Monday.
The region's technology-savvy consumers will continue to be the biggest buyers of the latest in the Finnish company's mobile phone-related offerings, Nokia president for mobile phones Matti Alahuhta said.
"Going forward, we continue to see a promising trend in the region as Asians are among the largest consumers of mobile phones and services in the world," Mr. Alahuhta said in a speech on the eve of CommunicAsia 2002, the region's biggest telecoms trade fair.
In 2001, the region accounted for 26% of Nokia's total revenues of 31.2 billion euros (US$29 billion), up from 23% in the previous year, and Mr. Alahuhta said the growth trend was set to continue.
"This region, therefore, remains a key focus and fast growing mobile marketplace for Nokia," he said without giving projections.
Mr. Alahuhta said the region's mobile phone subscribers in 2001 stood at 310 million, about a third of the 930 million users globally.
He said the region was expected to continue to show "good growth this year in terms of handset volumes." "In fact, we believe that year 2002 is the second consecutive year in which the APAC (Asia-Pacific) market volume is the highest of the three geographic regions, surpassing both Europe and the Americas," he said.
SHAKEN
Nokia's share prices were shaken last week after it forecast a drop in second quarter sales. It maintained its previous earnings prediction, but its weaker-than-expected mid-quarter update was enough to send other telecommunications stocks across Europe reeling.
In the update ahead of its second quarter earnings report on July 18, Nokia said it expected net sales in the second quarter to drop 2.0% to 6.0% year-on-year to 6.9 billion to 7.2 billion euros ($6.5 billion to $6.8 billion), compared to earlier forecasts of 2.0% to 7.0% growth.
Worst hit was Nokia's networks division, where the group predicted second quarter sales would drop 20% to 25%, compared to the same period last year. Earlier forecasts were for a drop of 5.0% to 10.0%.
However, the group's mobile phone division would fare better, Nokia said. It forecast handset sales in the second quarter would grow by zero to 4.0% year-on-year, compared to a previous estimate of 5.0% to 10.0%.
The Asia-Pacific region is expected to be the main battleground in the mobile phone business in the next few years as handset sales taper off in more mature markets like North America and Europe.
According to US-based Pyramid Research, which specializes in the communications sector, Asia will account for 45% of all mobile phone subscribers in the world by 2006.
MMS PROSPECTS
In a related report, also from Singapore, Nokia's Asia-Pacific director for imaging Mauro Montanaro said the commercial success of Multimedia Message Service (MMS) hinges on the pricing strategy adopted by industry players.
"SMS (Short Message Service) has been very successful because the pricing was very clear and simple," Mr. Montanaro said in a seminar ahead of the region's top telecoms trade fair. "The pricing is very important. So we need to be able to sort of drive the industry towards simple pricing."
Other factors crucial to the success of MMS, touted as the next big thing after the phenomenally popular SMS, include ease of use and open operating standards among the industry's leading telecoms vendors, he said. Unlike SMS which is restricted to text, MMS allows color pictures, animation, recorded sound and even video to be transmitted.
MMS can now be implemented on existing wireless systems even before operators roll out the costly third generation (3G) platforms, whose commercial launch timetable has been clouded by financial problems.
Despite the limited functions of SMS, it has been a huge money spinner for telecom operators with one billion messages sent daily worldwide.
CommunicAsia 2002, Asia's biggest telecommuciations fair, will formally open in Singapore today and leading players are expected to use the event to promote their MMS offerings.
Singapore Telecommunications Ltd., one of Asia's biggest players, has said MMS will be the next wave in mobile communications. -- AFP |
