HELSINKI, Finland—Nokia Corp. sent ripples through the mobile device industry by raising its estimate of global handset sales for this year from 10 percent to 15 percent “or more” over last year. The statement was delivered by Jorma Olilla, Nokia’s outgoing chairman and chief executive officer, at the company’s annual general meeting in Helsinki, Finland.
Nokia’s shares traded up more than 5 percent on the news, a rising tide that also gave a slight bump to the stock prices of Motorola Inc., RF Micro Devices Inc. and Texas Instruments Inc.
Under Nokia’s revised forecast, the company now expects industrywide handset shipments of about 915 million phones this year, an increase of about 120 million units from last year. As the world’s largest mobile handset vendor by volume, Nokia’s view of the market’s growth—which stands in contrast to predictions from various analyst firms of a slowdown—is noteworthy. Nokia did not project how many of those 915 million units it would sell. Nokia commands more than 30 percent of the global handset market.
Olilla also stated that Nokia expects that about 80 percent of the next billion mobile subscribers—often described as the “second” billion, as about one billion subscribers exist today—will come from emerging markets. The so-called “third” billion may be reached in 2008, Olilla said.
Analysts question whether the continued growth in handset sales in emerging markets will lead to lower average selling prices, squeezing profit margins. Average selling prices fell in the fourth quarter of 2005 and Nokia itself has projected that average selling prices would be flat or fall slightly in the first quarter of 2006, now just ending.
Nokia, while selling roughly one-third of all handsets in the world last year, has challenges. Critics argue that it is late to market with music phones, playing catch-up with rivals Sony Ericsson Mobile Communications L.P. and Motorola.
However, the Finnish handset maker unveiled three new handsets targeting first-time users in China, the world’s largest wireless market. The Nokia 1112, Nokia 2310 and Nokia 2610 are expected to ship in the second quarter.
