Tuesday, January 24, 2006

Nokia's Ollila May Say Earnings Growth Stalled on Lower Prices

Bloomberg writes that Nokia "may say earnings growth stalled in the fourth quarter as handset prices declined." According to Nomura International analysts, "the average price of a Nokia handset fell 20 percent in the past three years as Chief Executive Officer Jorma Ollila focused on cheap phones in emerging economies such as China."

Theo Maas at ABN Amro said, "Emerging markets are growing faster than developed markets, so the sales mix is working against Nokia. Profit margins have been a problem."

Martin Sirch at HSBC Trinkaus Capital said, "A higher market share in the U.S. would be important. Growth in the U.S. will be faster than in Europe." Maas added that "The U.S. is Nokia's single biggest challenge."

Sirch at HSBC Trinkaus remarked, "Nokia's phones are reliable and good quality, but Nokia still needs to improve its design. If you want a posh phone, you go for a Motorola Razr."

Nomura analyst Richard Windsor predicted "Nokia's phone prices will probably rise to 109 euros."