More phones, lower prices for Nokia

Earlier this summer, Nokia sold its one billionth phone. The customer is based in Nigeria and Nokia is quick to acknowledge the significance of this event.

In the opinion of Kai Öistämö, who heads the division of Nokia tasked with manufacturing phones for new markets: "It will be new growth markets like Nigeria that will fuel the growth towards three billion mobile subscribers by 2010."

Prices are generally falling as Nokia adopts a strategy of chasing market share. Indeed, the new phones are part of the mix Nokia hopes will help it achieve a 40% share of the global handset market (Gartner's researches put Nokia's share at just under 32% for 2Q2005).

Ultimately this may rebound on Nokia's profits prices are falling precisely because of the chase for market share. While higher sales of cheaper phones sold in emerging markets help increase revenues, they are reducing Nokia's average selling prices in 2Q2005 from euro 110 to euro 105 for the present quarter.

In an ironic development Nokia has just raised its 3Q2005 profit forecasts last week - as a result of western European demand for more sophisticated replacement phones.

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