Nokia Mobile Phone Sales Drop 13% from 2003 to 2004

Nokia reports third-quarter 2004 net sales of EUR 6 939 million, EPS EUR 0.14

Highlights third quarter 2004
(all comparisons in parentheses are to third quarter 2003 results regrouped according to 2004 organization):
- Net sales increased 1% to EUR 6 939 million (EUR 6 874 million in Q3 2003), up 8% at constant currency
- Operating profit decreased 20% to EUR 928 million (EUR 1 154 million), with operating margin of 13.4% (16.8%)
- EPS (diluted) was EUR 0.14 (EUR 0.17) on net profits of EUR 660 million
- Mobile Phones net sales of EUR 4 429 million (EUR 5 118 million) were 13% lower than in 2003, with EUR 822 million operating profit (EUR 1 473 million) and operating margin of 18.6% (28.8%)
- Multimedia net sales increased 94% to EUR 914 million (EUR 471 million)
- Networks net sales grew 21% to EUR 1 470 million (EUR 1 217 million), with EUR 181 million operating profit (EUR 4 million) and an operating margin of 12.3% (0.3%)
- Enterprise Solutions net sales increased 52% to EUR 172 million (EUR 113 million)
- Operating cash flow for the quarter was EUR 1.2 billion (EUR 1.2 billion) and overall cash position was EUR 11.8 billion (EUR 10.8 billion) at the end of the quarter

JORMA OLLILA, CHAIRMAN AND CEO:
The strong momentum in the global mobile device industry continued in the third quarter, resulting in a total global mobile device volume of 158 million units, according to our preliminary estimate. The replacement market in Europe and North America, as well as markets with relatively low mobile penetration rates such as Latin America, continued to be the major contributors to this volume growth.

With more competitively positioned mobile devices in the replacement market and an attractive offering for rapidly growing markets, Nokia's mobile device volume reached 51.4 million units in the third quarter. While Nokia was able to deliver products in higher-than-expected volumes during the quarter, industry-wide component tightness affected our overall volumes.

Nokia's mobile device market share increased quarter-on-quarter to 33%, according to our preliminary estimate. We made substantial market share gains in major Western European markets and maintained our leadership position in China. However, in the US we lost market share during the quarter, and despite strong sales growth, our market share in Latin America was down slightly from the second quarter 2004.

Nokia net sales increased slightly from third quarter 2003 levels. This was a result of the mobile device market share gains in Europe and continuing strong mobile device sales in China, Latin America and the rest of Asia offsetting the negative sales development in North America. Sales in the infrastructure business grew significantly in Europe, Latin America and Asia as investments in capacity and coverage increased.

We achieved EUR 0.14 EPS with a combination of healthy demand for Nokia products, which resulted in higher-than-expected sales, and steadfast cost control. I'm particularly pleased with the growing acceptance of many of our mid-range and high-end products, such as the Nokia 6230 and Nokia 6610i camera phones as well as the Nokia 7610 and Nokia 6600 imaging smartphones, which materially contributed to sales and profits in the third quarter.

To further the focused renewal of our product portfolio, we introduced and started shipping several new mobile devices during the third quarter. The newly launched products strengthen our high-end and mid-range offering and include a trio of fashion-category phones, the Nokia 7260, Nokia 7270 and Nokia 7280; our third mega-pixel imaging smartphone, the Nokia 6670; and the Nokia 9300 enterprise smartphone.

Our mobile infrastructure business sales grew markedly in Europe, Latin America and Asia during the quarter as operators continued to expand capacity and coverage. Sustained strong sales in 2G and five new GSM, EDGE and 3G customers in growth markets contributed to Networks solid third-quarter profitability. Highlighting our progress in 3G, Nokia has to date supplied 3G technology to 24 of the 50 commercially launched WCDMA 3G networks in the world.

We aim to continue offering high value-adding products to our customers, including operators, consumers and enterprises, by persistently renewing our competences and product portfolio. To drive these results, we have allocated additional resources to customization and enhanced customer focus, as several recent announcements indicate. I'm pleased that our efforts in product renewal resulted in market share gains in the third quarter in major Western European markets due to the positive reception of camera phones and Symbian-based, open platform smartphones. Our increased smartphone offering and investments in software have contributed to our clear leadership in smartphones.

We expect continued strong growth in global mobile device market volumes in the fourth quarter, even as compared to the remarkable final quarter in 2003, and now estimate that the 2004 total market volume will be approximately 630 million units. In the fourth quarter, we will begin shipping several new products focused on the mid-range and high-end to further strengthen the competitiveness of our product portfolio in order to continue building our market share.

if you read slighly deeper you will see, that nokia sales increased by 13% from Q2 to Q3
by the way slaes ofEricssony and Samsune remained stable from q2 to q3

Indeed, but then sales in summmer months are usually quieter than Q3, so I'd look for year on year first as an investor. Also Jan-sep 2003 compared to Jan-Sep 2004 also shows the same precentage loss.

year on year will not tell you that much when things are changing so fast
Nokia hed signifficant downturn in Q1 but it seems it is back on track on quater basis - when you look on yearly basis sales look really poor

by the way Nokia has to lower prices but margins are still waaaaay above SE and Samsung