Nokia mobile sales down 12pc

27 Jan 2005

Mobile phone giant Nokia reported this morning that its net sales for 2004 decreased 1pc to €29.2bn and operating profits decreased 14pc to €4.3bn, this is regardless of mobile device volumes reaching a record 207.7 million units, giving the company a 32pc share of the global market. However, despite having the largest market share in the world, Nokia has reported that net sales for its mobile phones fell 12pc.

For the fourth quarter, Nokia revealed that net sales increased 3pc to €9bn although operating profit fell 19pc to €1.6bn.

For 2004 Nokia mobile phone net sales were €18.5bn, down 12pc, while for the fourth quarter the company’s mobile phone net sales decreased 6pc to €5.6bn.

Network net sales for the year, however, were up 13pc to €6.3bn and for the fourth quarter were up 12pc to €1.9bn.

At the financial year’s end the company reported an operating cash flow of €4.3bn down considerably from the €5.3bn in the company’s coffers last year. Total combined cash and other liquid assets were up slightly to €11.3bn at the end of the year.

Despite reporting decreases across the board, Nokia chairman and CEO Jorma Ollila, gave a surprisingly upbeat assessment of the mobile phone sector: “This was a year of record-breaking mobile device volumes for our industry, which drove both the device and infrastructure markets forward. Global mobile subscriptions also rose sharply to 1.7 billion for 2004. For Nokia, device volumes also reached new highs for the fourth quarter and full year largely backed by the ongoing boom in growth markets such as Latin America, Russia, India and China, and brisk sales of color screen and camera phones. Our North American phone volumes were, however, disappointing.

“Nokia’s full-year 2004 mobile device market share was 32pc, based on an estimated market volume of 643 million units. I am pleased with our steady quarter-on-quarter market share gains during the second half. Based on an estimated 194 million units for the market, we achieved a 34pc share in the fourth quarter largely as a result of sequential market share gains in Asia-Pacific, China and EMEA.

“During the fourth quarter, we started shipping the Nokia 6630, our latest 3G smart phone, and the initial response has been positive with more than 30 3G operators including it in their offering. In western Europe, the Nokia 6230 was the top-selling phone in the industry for the fourth quarter – a first for a camera phone. Of the 36 devices we announced in 2004, the majority had cameras and nearly all had color screens. We also introduced additional designs with 10 new clamshell models, in addition to flip-open messenger devices and the Nokia 9300 smart phone for enterprises. During 2004, we continued to be the clear market leader in the GSM megapixel market and in smart phones, which combines a handheld computer with a mobile phone,” Ollila said.

By John Kennedy