Nokia Monkeyshine
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Nokia Sees Growth Even Without Pickup In Replacement Rate
Wednesday August 7, 1:56 pm Eastern Time
STOCKHOLM -(Dow Jones)- Nokia Corp. (NOK) Chief Executive Jorma Ollila said Wednesday industry shipments of mobile phones should grow next year even if the rate at which subscribers replace their current phones doesn't.
Speaking to a group of investors in the U.S., Ollila said the industry's unit shipments could grow 10% to 15% "next year and beyond" even if the replacement cycle for phones doesn't accelerate and subscriber growth trends remain unchanged. His remarks, at a conference sponsored by US Bancorp Piper Jaffray in Boston, were Webcast.
He estimated the current replacement cycle to be about 2.5 years, meaning subscribers who are buying new phones now bought their last models, on average, in early 2000. He said the replacement cycle had lengthened over the past 12 to 18 months as a result of the economic downturn.
Nokia has estimated that around 400 million mobile phones will be sold worldwide this year, meaning industry sales will show little to no growth after falling slightly in 2001. The Finnish company is the world's largest supplier of phones by far, with a market share that it estimates at 38%.
Phonemakers are hoping the launch of new services, particularly picture messaging, and a batch of new handsets in the latter half of the year will prod subscribers to trade in their current models.
Ollila said Nokia plans to launch eight to nine more phones in the second half of 2002, after introducing more than 20 so far. The company is expected to unveil and begin shipping at least six more color-screen models before year-end.
The chief executive also said Wednesday that Nokia would, beginning next year, begin to introduce similar models for GSM and CDMA networks at the same time.
Nokia has failed to dominate the CDMA market as it has the market for GSM and TDMA phones. Ollila said CDMA phones account for slightly less than 20% of the world market, but said Nokia's current market share is only around 10%.
Earlier this year, a Nokia spokesman said the company's CDMA market share was in the "midteens."
Earlier Wednesday, Nokia announced that it would cut around 900 jobs from its networks division, which employs about 19,000 people.
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