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Tuesday, 10 September, 2002, 10:06 GMT 11:06 UK
Nokia outlook worsens further
Nokia researcher
Nokia hopes investment in new products could pay off
Nokia, the Finnish firm that dominates the huge but slowing mobile handset market, has cut its sales forecast for the fifth time this year.

Nokia, which makes more than one in three mobile phones sold worldwide, now says it will post sales of 7.1bn-7.4bn euros (4.5bn-4.7bn; $7bn-7.2bn) in the July-to-September quarter, down from its previous 7.2bn-7.6bn-euro target.

The revised number, however, is still in advance of the 7.05bn euros Nokia reaped in the same period of 2001, and should not affect overall group profits for this year as a whole.

It would make Nokia one of the few large mobile firms to have weathered the current downturn in global sales, the first reverse in the brief history of the mobile phone market.

The Finnish firm's relative success - which has seen it grab market share from rivals, especially Sweden's Ericsson - is attributed to swingeing cost-cuts, combined with the launch of a raft of new products in recent months.

Screen dreams

The stock market was less than impressed, marking down Nokia's shares by almost 2% in the minutes after the announcement.

A Nokia 3650
Pictures could make a happy Christmas for Nokia
Nokia shares have lost about half their value this year, but have nonetheless outperformed industry peers.

The key source of hope for investors is the latest rush of new products, which focus on the type of colour-screen phones used in picture messaging, the industry's next big thing.

Nokia's new colour-screen phones, the 3650 and 3510i, were launched last week, and sales should filter through to the bottom line by Christmas, analysts reckon.

3G disappointment

The imminent fad for picture messaging, currently being rolled out by most mobile operators around Europe and beyond, could prove a modest salvation for manufacturers.

Previously, Nokia and its rivals had to point to the arrival of high-speed third-generation (3G)mobile services as the source of future growth - a prospect seen as increasingly slender.

Also on Tuesday, Thorbjoern Nilsson, head of marketing and strategy at Ericsson, told the Financial Times that he thought 3G services could prove less of a bonanza than hoped.

Even the biggest markets may be unable to support more than four 3G operators, Mr Nilsson said.

But while picture messaging could provide a sales boost this year, it will not be on the scale of the revolution once predicted for 3G, which will allow users to download vastly greater quantities of data, including multimedia and internet content.

See also:

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