Nokia raises market-share forecasts ahead of Moto announcement

Nokia Corp. upped its market-share forecasts for the second quarter, news that helped boost the company’s stock almost 4% to around $26.04 per share. The world’s largest handset maker said it expects to gain market share thanks to a reduction in “excess device inventory” by its competitors, although the company did not offer further details.
In its first quarter earnings announcement, Nokia said it did not expect its market share-which the company pegs at 36%-to gain any ground over the course of the second quarter. Today Nokia revised that outlook, predicting that its share of the worldwide cellphone market would “increase sequentially” in the second quarter.
“In its first quarter 2007 earnings announcement, Nokia said that it believed there had been an impact in the market from the excess inventory of certain of its competitors’ products in the first quarter,” the firm said in announcing its revised forecasts. Now, “Nokia believes that its device shipments in the second quarter 2007 will be positively impacted, as excess device inventory in the market has sufficiently cleared.”
The news comes as Nokia’s main rival Motorola Inc. struggles to find its footing. However, at least one analyst believes that Motorola’s troubles are nearing an end.
“Our mid-quarter checks suggests Motorola has managed to stabilize its handset market share in most regions” wrote Ittai Kidron of CIBC World Markets in a note to investors. “We have seen evidence of two trends that illustrate the progress Motorola is making internally to address its issues: adoption of a firm global pricing policy (and adhering to it), a shake up in the global distribution system, reducing arbitrage activity and forcing regional sell-through disciplines.”
Indeed, Motorola is scheduled to announce new devices tomorrow, which Kidron expects will include new derivatives of the company’s Motofone and a new Razr-like flip phone.