Doubts cast over Nokia's future growth

Despite announcing stellar Q4 handset shipments and profitability, not everyone in the mobile phone industry was convinced that Nokia's future is quite so rosy. Analysts with IDC claim that the annual growth in mobile phone sales will drop below 10 per cent this year, bringing into doubt Nokia's more upbeat outlook for 2008.

Following its Q4 results, Nokia issued a positive prediction of a 10 per cent growth in handset sales in 2008--and bullishly predicted that its share would increase beyond the 40 per cent of the market it claimed for Q4. Of particular interest is the company's success in the Middle East and Africa--two relatively immature and somewhat unstable regions, where it reported shipments up an astonishing 52.3 per cent.

Accepting that these results might be due to the 'stars being favourably aligned for Nokia in Q4', the company's CEO, Olli-Pekka Kallasvuo, did provide some insight to the challenges faced by the company. These included bedding down the new organisation and getting it working effectively, providing good proof points for Internet services to show the finance community that the strategy is working and can deliver meaningful revenue growth, giving Samsung a hard time as it seeks to strengthen its position in the low end of handsets and building share in the U.S. without getting burnt if there is a recession.

For more on this story:
- read IDG, and Ovum