The fourth-quarter holiday buying season enhanced Nokia's handset sales. The firm shipped 106 million handsets in the fourth quarter, a 27 percent increase from a year earlier. In addition, Nokia had a 19 percent net profit increase to $1.65 billion. Nevertheless, the Finnish handset maker also saw a dip in its average selling price (ASP)--from $128.51 to $115.53.
Nokia's multimedia unit increased its profits by 6 percent while the enterprise solutions group saw its sales nearly double for the quarter. The networks side, however, saw its operating profit decline 52 percent. Some of that decline was due to costs related to the planned merger of the division with Siemens' network unit.
Some analysts are concerned about Nokia's ASP decline. Ginny Lee, analyst with Technology Business Research, says that both Nokia and Motorola are sacrificing their ASPs as they battle for marketshare in developing countries. Lee, however, said that Nokia is poised to dominate emerging markets such as India with new mobile phones designed for that region and its strategically located manufacturing plant in Chennai.