For the year, net income rose 13.3% to 3.6bn euros ($4.4bn) on revenue up 16.4% at 34.1bn euros ($41.9bn).
While Nokia expects the mobile device market to grow more than 10% in 2006, this is a sharp fall from the 24% expansion to 795 million units it calculates were shipped in 2005. Average selling prices of Nokia’s mobile phones fell to 99 euros ($121.29) by the fourth quarter compared with 111 euros ($135.90) a year earlier, reflecting sales of low-priced handsets to developing markets.
The Espoo, Finland-based company said it expects this trend to continue in 2006, though it forecast that there will be a growth in the overall value of device sales. Nokia said its share of the market for the year was 33%, up from 32% in 2004, and had risen to 34% by the fourth quarter. It has set a target to increase this in 2006 as retiring CEO Jorma Ollila said the company would stay ahead of the pack.
Though the company increased sales in China and India by 27% in the fourth quarter to 84 million phones, it is the top end of the market where it is most dominant. It said it tripled its market share for WCDMA 3G mobile phones and believes that the market will at least double in 2006 from the 44 million units in 2005.
On the mobile infrastructure market, Nokia said it put in a strong performance in the fourth quarter. It said the 4% decline in sales to 1.95bn euros ($2.4bn) was against a period of exceptionally high sales. Operating margins slipped from 15.1% to 13.7% because lower margin services business account for an increasing proportion of network sales.
The problem area is its enterprise unit, soon to be strengthened by the acquisition of Intellisync. It recorded an operating loss of 88.9m euros ($108.8m), with a 29m euro ($35.5m) bill for headcount reductions. Sales slumped 48% to 153m euros ($187.2m), hit by delayed operator acceptance of its 9300 enterprise smart phone. Nokia is pinning hopes on the growth potential of its enterprise unit and a better performance is promised in the second half of the year.
