Nokia Keeps Quiet on Forecast
Apr 1, 2004
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Many mobile phone firms have bragged of a bumper quarter and raised forecasts but market leader Nokia (Helsinki, Finland) appears to be holding back due to aggressive rivals and a re-organization, analysts say.

The Finnish handset maker, which produces one in three phones sold worldwide, failed to give a more upbeat profit forecast last week at its annual shareholders meeting, worrying some that it is not taking its share of the growing mobile pie.

Data from firms in the industry in recent weeks have shown that demand for mobile phones remained strong at the start of the year, spilling over from a bumper Christmas season into the first quarter, which is not showing any of its usual weakness.

Global number three handset maker Samsung Electronics (Seoul, South Korea) expects record first-quarter profits thanks to strong U.S. and European demand, a source told Reuters. World number four Siemens has also reported hefty demand, the unnamed source said.

Mobile phone casing maker Perlos, a supplier to Nokia and Siemens, jacked up its quarterly guidance, saying sales would surge by more than one-third in the quarter thanks to the robust handset demand.

"There shouldn't be any complaints about the volumes in the quarter," said Conventum Securities analyst Jari Honko.

Nokia, Europe's top technology blue chip company, should also see volumes of phones rise.

Analysts said Nokia cut its prices sharply in February 2004, partly as a response to aggressive pricing by Siemens which is accepting wafer-thin margins to gain share.

"For the first time in many years, substantial price moves by Nokia on flagship products do not seem to have resulted in market share increases for the company," Schwab SoundView analysts Matt Hoffmann and Peter Richardson said in a note.

They cut Nokia to "neutral" earlier this week.

A Nokia spokeswoman declined to comment on how the quarter has gone so far. (Reuters)

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