As anticipated, handset giant Nokia reported that profit fell, but not as much anticipated by analysts. While earnings per share rose, net profit fell 0.9 percent in the fourth quarter, as the networks division continued to drag down earnings with a 12 percent drop in operating profit. Nokia also suffered from falling prices in the handset division as growth begins to ship to emerging markets such as China, India and Africa and rivals begin to enter that market. Nokia said it sold 84 million phones in the quarter, but prices fell faster than expected, putting more pressure on margins. In the enterprise division, Nokia produced an operating loss of $131 million, excluding restructuring. Analysts question when Nokia might see a return on this investment and remain concerned about this level of loss since it's not sustainable in the long-term.
According to a new report from Telecom Trends International, the global mobile handset market grew at a rate of 24 percent, with vendors shipping 796 million handsets in 2005. The firm said Motorola solidified its No. 2 position in the market by registering growth of 40 percent. Nokia grew at 28 percent, increasing its share and solidifying its grip on the market as the top vendor. LG retained its share, but the shares of Samsung and Sony Ericsson declined slightly.
For more about Nokia's Q4:
- read this article in The Wall Street Journal (sub. req.)
- check out this release from Telecom Trends International