News
Issue #2003 - 19 (June 2003)
(Updated June 19, 2003)

MARKET OUTLOOK & TRENDS

Nokia Less Pessimistic About Short-term Outlook

1. Nokia has provided analysts with a scheduled update on its strategy, maintaining its 10 percent growth target for 2003 handset sales and identifying gaming, CDMA handsets, China, India and the US as they key areas for medium- and long-term growth. 

2. Nokia hit by weak dollar and SARS
The world's leading mobile phone maker, Nokia, has warned that its sales could be lower than expected in the three months to the end of June. It blamed weak economies, the fall in the value of the dollar, and the deadly SARS virus. 

The company said sales growth at its main mobile unit would come in at the low end of, or below, its earlier forecast of 4-12%. 

"Sales reflect the continued general economic weakness in Europe and the US, the impact of currency fluctuations and the effect of Sars on consumer behaviour, especially in China," Nokia said in a statement. 

But the company softened the blow with a forecast that headline profits would still be on target at 0.13-0.16 euros per share (9-11 pence; 15-19 cents). 

Market share 
Investors were relieved that the news from Nokia was not too gloomy after its closest rival, Motorola, warned of much bigger problems on Monday. 

Motorola said it would miss both sales and profits targets for the second quarter, mainly because its business in Asia had been hit by SARS. 

That announcement hit the company's shares and dragged down the rest of the industry. 

But Motorola does much more business in Asia than Nokia. 

"Only between 5-6% of Nokia's total handset sales are in China, so it's definitely less exposed than Motorola there," said analyst Karri Rinta at Evli Bank. Nokia also said that it had increased its market share. Independent analysts estimate that it makes about 36% of all mobile phones sold.  Last year, Nokia claimed a 38% market share. 


3. Texas Instruments (TI) lowered its revenue growth expectations for the second quarter
TI cited the impact of SARS on the Asian economy as one major cause for this. TI now expects total revenue growth of about 5 percent from the first to second quarter, instead of its original forecast of about 7 percent. Analysts were expecting TI to report revenues of about $2.3 billion for the quarter. TI said it expects wireless semiconductor revenue (a subsection of its 

For more information: http://www.nokia.com

MobileInfo Comments and Advisory: Interesting quarter to watch will be the third quarter because there is a definite upward trend in economic indices.

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