UPDATE 4-Nokia sees cellphone market up 10 pct in 2010
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Date: Wed, 2 Dec 2009 |
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* Analysts' consensus forecast 8.6 percent rise
* Sees handset unit 2010 operating margin of 12-14 percent
* Ovi Store downloads approaching 1 million/day
* Sees 2010 network equipment market flat on 2009
* Nokia shares down 0.5 percent
HELSINKI, Dec 2 - Nokia, the world's biggest mobile handset maker, expects the cellphone market to recover faster next year than analysts are forecasting, but handset prices will keep falling, though more slowly.
Nokia said handset market volumes would grow about 10 percent in 2010, more than analysts' consensus forecast of 8.6 percent, while its market share would be unchanged.
"Going into 2010, the overall mobile devices market is stabilising, and it is growing more in the areas where Nokia has competitive advantages," Nokia's new finance director Timo Ihamuotila said in a statement.
Nokia forecast its handset unit's underlying operating profit margin would be 12-14 percent next year, in line with what it reached earlier this year, but well below levels hit in the boom times, when it managed above 20 percent.
"I think consensus was probably gravitating towards the higher end of that guidance. So that is a slight negative," said Sal. Oppenheim analyst Nicolas Von Stackelberg.
For a Factbox on Nokia forecasts click
Nokia's shares were down 0.5 percent at 8.87 euros at 1347 GMT, in line with a 0.4 percent fall for the DJ Stoxx European Technology Index.
Nokia's shares have missed the stock market recovery, dropping 20 percent since the start of the year, mostly due to disappointment with its smartphone offering, while DJ Stoxx European technology index, in which it is the biggest constituent, has risen 17 percent.
EXECUTION OFFICE
"We have three targets for 2010: execution, execution, execution," Nokia's Chief Executive Officer Olli-Pekka Kallasvuo said in a speech at the annual shareholders' meeting.
Kallasvuo said the company had cut costs at its cellphone unit by an annual 1 billion euros.
Nokia and the rest of the cellphone industry have suffered as recession-hit consumers cut spending on new gadgets, and the more expensive end of the market has seen increasingly stiff competition.
Nokia said, however, that it expected the fall in average selling prices (ASP) to slow in 2010.
"Guiding for slower ASP erosion comes as little surprise, particularly given looming cut-throat margin pressure on smartphone pricing," said Ben Wood, analyst at CCS Insight.
Nokia's CEO Kallasvuo said its Symbian operating system had reach and flexibility like no other platform, and the company plans to push smartphones down to new price points globally, while simultaneously growing margins.
"It is encouraging to see Nokia coming out fighting for Symbian. 2010 is a make-or-break year for Nokia's smartphone platforms in the face of fierce competition from Apple, Google Android and RIM," Wood said.
Nokia's closest rival Samsung Electronics gave an upbeat forecast for 2009 mobile phone sales earlier this week due to sharp growth in touch-screen models.
Nokia said it was rapidly increasing the number of touch-screen models in its portfolio.
OVI STORE DOWNLOADS NEARING 1 MILLION DAILY
The Finnish firm has started to invest more in Internet services in recent years, seeking to counter falling handset prices and increased competition in smartphones from the likes of Apple and Blackberry-maker RIM.
Niklas Savander said downloads at its online software marketplace, Ovi Store, are approaching one million per day. The company is targeting 300 million active services users by the end of 2011, while generating revenues of at least 2 billion euros in 2011.
"I am more sure now than I was a year ago that we are going to achieve our 2 billion target in 2011," Savander said. (Additional reporting by Brett Young, Eva Lamppu in Helsinki, Johannes Hellstrom in Stockholm; Editing by Dan Lalor/Will Waterman)
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