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16 July 2024

Nokia set to focus on profits over sales targets

Olli-Pekka Kallasvuo

By Reuters

Nokia will focus on profit development amid a falling cell phone market in which many competitors are cutting prices, Chief Executive Olli-Pekka Kallasvuo told the Financial Times.

"We will continue to combine market share and margins in the right way in order to maximise the bottom line," Kallasvuo was quoted as saying in an interview. This in stark contrast to some of its smaller rivals, like LG Electronics, which have said they will do anything to reach their sales targets.

Nokia lost some market share in the second half of last year as it shied away from some fierce price battles.

The cell phone market is expected to see its weakest year in 2009, with analysts forecasting an average 6.6 per cent fall in sales volumes.

Nokia expects to weather the fall better than some rivals. "When times are tougher, people who have stronger positions fare relatively better than the competition… So, overall, I believe many of our competitors will have limitations here in terms of their ability to do things," Kallasvuo told the paper.

Nokia has said it aims to increase its cell phone market share in 2009, helped by consumers' appetite for cheaper models.

"The fact that we are commercial in all price points will give us the possibility, if the trade-down happens, to sell another device, which is not always the case with competitors who have a more limited portfolio," Kallasvuo said.

Nokia has bought a dozen companies – including an $8.1 billion acquisition of mapping company Navteq – to jump-start its internet business as growth in the cell phone market stalls.

Nokia has said it was looking for smaller acquisitions to strengthen its internet services offering, and Kallasvuo told the paper the company does not have "any big pieces missing" in its services portfolio.