Nokia, Ericsson report strong Q2 results

Nokia today said second-quarter earnings increased 15 percent and that its handset sells grew in most markets except North America. The company reported second-quarter net profit of €799 million, up from €695 million last year. Sales rose 25 percent to €8.06 billion, up from from €6.46 billion in the second quarter of 2004. Nokia said its global market share inched up to 33 percent, up from 32 percent in the first quarter this year. Nokia said second-quarter growth came mostly from developing markets, with low-priced devices leading the company's sales. The company sold 60.8 million phone units in the second quarter, up from 45.4 million a year ago. Sales in China grew 76 percent while North America remained Nokia's weakest market, with sales dropping 22 percent to 6 million units.

While both Nokia and rival Motorola posted impressive second-quarter results, Nokia is stuck selling more lower-end handsets while Motorola is cashing in on its popular high-end Razr line of phones. While Nokia is well positioned to win the lower margin fight, Motorola is positioning itself to dominate the high-end cell phone market.

For more on Nokia's Q2 numbers:
- read this AP article and this piece from TheStreet.com

Ericsson today reported a 16 percent increase in second-quarter profit thanks to growing sales of network equipment and services. The company's income climbed to $749 million, up from $641 million a year ago. Sales grew 18 percent to $4.9 billion. Ericsson's gross margin, however, dropped to 45.9 percent, down from 47.8 percent a year earlier and 48.5 percent in the first quarter. The company said the drop in gross margin was due to a drop in software sales and growth in network services. Ericsson reported strong sales growth in both the EMEA and North America.

For more on Ericsson's Q2:
- see this story from the BBC

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