Selling more for less

16 October 2003 By Robert Cyran Follow @rob_cyran

The Finnish mobile group s push into games could help with phone prices. However, it is not yet clear whether it has got the platform right. But cheap phones still generate lots of cash. And the stock has room to rise if Nokia s investment in games pays off.

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Nokia reported lower revenues but higher profits for the third quarter. For the three months ended September 30th, the company had sales of E6.9bn, compared with sales of E7.2bn in the same period last year. Revenues were hit by the fall of the dollar in constant currency terms, revenues rose by 4%.

Earnings for the quarter came in at E823m (17 cents per share), compared to E610m (13 cents) last year. Earnings matched analysts' expectations and benefited from an improved showing at Nokia's network division.

The number of phones Nokia shipped rose sharply to 46m units, or 23% higher than last year. In contrast, the worldwide market for all mobile phones grew by an estimated 15% to 118m units sold in the third quarter. Nokia's claimed its market share in the mobile phone market had risen to 39%.

At the same time, the average price per phone sold (ASP) has continued to fall as more phones are sold in poorer regions of the world. In the third quarter, the average price dropped to E124. In 2001, the ASP was E165.

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