Nokia upbeat on Asian growth despite global woes

Nokia upbeat on Asian growth despite global woes

Agence France-Presse
Singapore

The Asia-Pacific region is set to consolidate its position as
the leading source of growth for the world's biggest telecom
equipment maker Nokia, a senior executive of the company said
Monday.

The region's technology-savvy consumers will continue to be
the biggest buyers of the latest in the Finnish company's mobile
phone-related offerings, Nokia president for mobile phones Matti
Alahuhta said.

"Going forward, we continue to see a promising trend in the
region as Asians are among the largest consumers of mobile phones
and services in the world," Alahuhta said in a speech on the eve
of CommunicAsia 2002, the region's biggest telecoms trade fair.

In 2001, the region accounted for 26 percent of Nokia's total
revenues of 31.2 billion euros (US$29 billion), up from 23
percent in the previous year, and Alahuhta said the growth trend
was set to continue.

"This region therefore remains a key focus and fast growing
mobile marketplace for Nokia," he said without giving
projections.

According to Alahuhta, the region's mobile phone subscribers
in 2001 stood at 310 million, about a third of the 930 million
users globally.

He said the region was expected to continue to show "good
growth this year in terms of handset volumes."

"In fact, we believe that year 2002 is the second consecutive
year in which the APAC (Asia-Pacific) market volume is the
highest of the three geographic regions, surpassing both Europe
and the Americas," he said.

Nokia's share prices were shaken last week after it forecast a
drop in second quarter sales.

It maintained its previous earnings prediction but its weaker-
than-expected mid-quarter update was enough to send other
telecommunications stocks across Europe reeling.

In the update ahead of its second quarter earnings report on
July 18, Nokia said it expected net sales in the second quarter
to drop 2.0-6.0 percent year-on-year to 6.9-7.2 billion euros,
compared to earlier forecasts of 2.0-7.0 percent growth.

Worst hit was Nokia's networks division, where the group
predicted second quarter sales would drop 20-25 percent, compared
to the same period last year. Earlier forecasts were for a drop
of 5.0-10.0 percent.

However, the group's mobile phone division would fare better,
Nokia said.

It forecast handset sales in the second quarter would grow by
zero to 4.0 percent year-on-year, compared to a previous estimate
of 5.0-10.0 percent.

The Asia-Pacific region is expected to be the main
battleground in the mobile phone business in the next few years
as handset sales taper off in more mature markets like North
America and Europe.

According to U.S.-based Pyramid Research, which specializes in
the communications sector, Asia will account for 45 percent of
all mobile phone subscribers in the world by 2006.