Nokia predicts strong growth

Nokia, the world's largest maker of mobile phones, has predicted strong growth for the last three months of the year.

The Finnish firm, which makes one-third of the world's handsets, said that it may beat its profit targets.

The upbeat statement defies the wider gloom of the telecoms sector which has seen a raft of companies warn on their profits.

And some analysts had been expecting Nokia to follow suit in its latest trading statement.

The surprisingly positive statement sent a wide range of telecoms stocks higher in a cluster of European bourses.

Saturation

Nokia said that it expected handset sales in the last three months of the year to be 25% higher than the previous three months thanks to its new Internet phone on sale this Christmas.

Nokia key stats

33% of handset market

Sales in 30 countries

59,000 employees

3.9bn euro profits in 2000

But despite the growth, handset sales will be flat for the year as a whole.

Mobile phone makers have been suffering from market saturation, and have also faced the crippling costs of introducing new faster phone networks.

With over seven phones for every 10 people in Europe, the market for new mobiles is weakening and the replacement market is nowhere near as strong.

Sector boost

The news has raised hopes in the battered telecoms sector, and Nokia's shares jumped 5% on the news.

This is great news for the tech sector...it strengthens the view that things will get better next year

Paris-based trader

Vodafone, Sweden's Ericsson, Germany's Siemens and chip maker Infineon were amongst other companies to get a welcome boost from Nokia's positive outlook.

"Nokia's news is just great...this is good news for the tech sector as it strengthens the view that 2001 was a bad year but that things will get better next year," said one Paris-based share trader.

But the upbeat trading statement is not universally good news for handset makers.

Nokia also said that it expected to gain market share from its rivals in the month ahead.

The Finnish group has outperformed most of its peers in recent months, and its share price has nearly doubled since the 11 September attacks.