Financials earlier this week from the number two player Motorola and a performance update from Sony Ericsson (which doesn’t produce full figures as a joint venture of two listed groups) had already highlighted how well the global market is doing this year, and Nokia’s results reinforced that impression. The market leader now expects global units for the entire segment to hit 780 million this year, up from 643 million in 2004.
The Finnish handset and equipment vendor reckons its share of the global pie was 33% in the latest quarter, up from 32% in the previous three months and, without quantifying its expectations, it predicts a further increase by the end of the year. With an overall market growing at 21% year-on-year, that represents significant increased volumes.
In value terms, meanwhile, Espoo-based Nokia posted a net profit for the third quarter up 29%, at 881m euros ($1bn), on revenue that rose 18% to 8.4bn euros ($10bn). For the first nine months, net profit increased 21% to 2.54bn euros ($3bn) on revenue that was up 20%, at 23.8bn euros ($28.6bn).
The lion’s share of revenue is, of course, from mobile phones (62% in the third quarter), though the fastest growth (55% up from Q3 2004) came in multimedia, thanks both to an uptick in sales in high-end imaging smart phones (which are reported in multimedia rather than mobile phones) and to a one-time item, 19m euros ($22m) of proceeds from the sale of the Tetra push-to-talk business to EADS during the quarter.
The weakest performance was from Networks, up just 2% in revenue, which the company attributed to intense competition for business, but also the fact that it was, as CEO Jorma Ollilla put it, investing in building our presence in the growing network services market, making aggressive bids to get into the services business.
Enterprise, which comprises the well-established firewall business and its growing portfolio of business-focused phones, was up 16% in the quarter but 30% in the first nine months, and is clearly an area Nokia wants to grow further as a part of the overall business, given the average selling price of phones in that segment. The company only launched its new range of handsets for the business market a week ago, a move which should drive its business there in the coming quarters.
Ollilla also said Nokia saw sequential growth in market share in China and Asia Pacific in the quarter, and while it needs to push its growth in high-end smart phones, the company is also eyeing those emerging markets too, as evidenced by its recent alliance with Chinese vendor Putian so as to have a presence in TDS-CDMA technology, should China opt, as it is tipped to do, to give this home-grown 3G standard some market share in next year’s licensing process.
