Thursday, October 20, 2005

Margin Pressure a Drag for Nokia picks up a Dow Jones article that reports Nokia has raised "its forecast for the global handset market after third-quarter profit was boosted by rising demand for phones with cameras and music players and growth in emerging markets." However gross margins remain under pressure, and Nokia said "average selling prices will fall in the fourth quarter from the third as growth stems mainly from markets where low-end phones predominate."

Ben Wood at Gartner said, "The mobile phone market continues to grow at a relentless pace but with downward price pressure, which is reflected in Nokia's average selling price."

Petri Arjama at Handelsbanken noted "the decline in selling prices was steeper than expected," and thought "the gross margin development was also a concern, and Nokia needs to cut its fixed-cost base to address the issue."