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Last Updated: Thursday, 26 January 2006, 13:16 GMT
Cheaper phones hit Nokia margins
Nokia phone screen
Price competition is increasing in the mobile phone market
Shares in mobile phone giant Nokia have dipped 3% after it said profit margins were coming under pressure.

Nokia's average selling price fell to 99 euros as more of its sales came from low-end models in emerging markets such as China and Africa.

The firm reported a pre-tax profit of 1.5bn euros ($1.8bn: 997m) for the three months to 31 December, down 7% on the same period of 2004.

Its profit margin fell from 15.3% to 13.2% during the quarter.

It said average selling prices would carry on falling as the trend of rising sales in emerging markets continued.

Strong Chinese sales

Analysts have warned that profit margins and average selling prices are coming under pressure across the mobile sector.

Nokia said it sold 265 million phones in 2005, gaining a 33% market share.

Sales growth was strongest in China, while sales fell in North and Latin America.

It said it expected the mobile phone market to increase by 10% in 2006.




SEE ALSO:
Nokia profit warning hits shares
21 Jul 05 |  Business
Mobile giants boost phone ranges
15 Jun 05 |  Business
Nokia warned by market regulators
26 May 05 |  Business
Profits up at Nokia and Motorola
21 Apr 05 |  Business
Nokia announces Microsoft tie-up
14 Feb 05 |  Business


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