Nokia says Q4 on target, expects mobile growth in 2004

Finland's Nokia has provided more details on its plan to divide the company into four business groups in 2004, compared to three, and reiterated its earlier fourth-quarter guidance.

The mobile phone maker has split itself into four divisions that will break out profits and losses separately, Nokia said Monday. The company expects its mobile phones division to account for 65 percent of Nokia's sales in its fourth quarter, with multimedia hitting just above 10 percent, networks slightly below 20 percent and enterprise systems reaching about 5 percent. The company will report quarterly numbers for the divisions beginning Jan. 1, 2004, it said.

For the fourth quarter as a whole, Nokia "believes it will achieve its previous guidance," based on sales so far in the period, according to Jorma Ollila, Nokia's chairman and chief executive officer who was speaking at a webcast news conference held before the start of the company's two-day meeting with industry analysts.

In October, Nokia said it expected fourth quarter earnings of between €0.21 to €0.23 per share, lower than the €0.26 achieved a year ago. At the time, the company also forecasted flat to slightly higher sales in its mobile phone and network divisions totaling about €1.4 billion (US$1.65 billion) for the quarter.

Nokia said the mobile phone market was hitting its expected growth targets so far this quarter and, based on market gains in 2003, the company now has "a clear number-one position" in the U.S. and a number-one position in GSM (Global System for Mobile Communications) in China. Nokia has also doubled its share of the global CDMA (Code Division Multiple Access) handset market in 2003, it said.

For the mobile phone market as a whole, Nokia forecasted a 2003 market volume of about 460 million units and expects market volume growth in 2004 to be "somewhat over 10 percent." Nokia reiterated that the networking, or mobile infrastructure market, is stabilizing and is expected to be flat next year as it was in 2003.

Based on its 2003 estimates, Nokia is targeting a market made up of voice-optimized devices, imaging, games, media and enterprise mobility and mobile networks with a combined worth of around €200 billion, it said.

Looking ahead, Nokia said that although the company expects its multimedia and enterprise solutions divisions to generate operating losses in the short-term, it is targeting a break-even in the multimedia unit for the fourth quarter 2004 and in enterprise solutions sometime during 2005.

Earlier Monday, Nokia named Mary McDowell, a former vice president at Hewlett-Packard Co., as head of its enterprise solutions division, beginning Jan. 1.

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