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Last Updated: Thursday, 17 April, 2003, 10:32 GMT 11:32 UK
Nokia hangs on to its lead

Nokia, the world's biggest mobile phone maker, has posted robust profits, but warned that sales were weak and the outlook uncertain.

Nokia said pre-tax profit in the first three months of this year fell 4% - far less than analysts had feared - to 1.3bn euros (900m; $1.4bn).

Market reaction was muted, with Nokia shares dipping slightly before recovering, as analysts worried about the company's sales performance.

Revenues were down 3% year on year, and Nokia said that the performance of its networks division - which makes expensive equipment for mobile operators - was especially disappointing.

Ups and downs

Nokia has consistently outperformed its rival mobile phone makers, and has grabbed market share, especially from Sweden's Ericsson, in recent years.

It has also cut costs drastically, shedding thousands of jobs since mobile handset demand started to slacken two years ago.

Nonetheless, its overall market has been shrinking, and the networks division is particularly struggling to find customers ready to invest.

Nokia expects network revenues to fall by 15% this year, a worse performance than previously forecast.

In handsets, Nokia has launched a raft of new products - mainly aimed at teenagers and those wanting multimedia services - in recent months, at a time when its rivals have tended to tread water.

But the mass market, now seen as near-saturated in Western Europe, remains reluctant to change handsets as often as some manufacturers had predicted.

The slow roll-out of third-generation high-speed services has also delayed another anticipated surge in handset demand.

Ollila Jorma, Nokia Chief Executive
"We want to make sure that both parts of our business are profitable"

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