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Nokia is regarded as one of the top cell phone producer. Recently, Nokia reported a 57 percentage sharp growth in its earnings per share during last two months of 2007 due to rocketing demand of Nokia products in emerging markets and peaked its global market share to 40 percentage. Nokia’s last quarter earnings per share, minus one-off items, increased higher to 0.47 Euros though it was forecasted average 0.44 Euros earlier in a Reuter’s poll of 34 analysts. The product did better job by beating its forecast. In fourth quarter, demand for cheap phones increased sharply in Asian markets.
Shares in Nokia decreased steeply on the news and were up 14.3 percent at 23.71 Euros in early trading. Nokia sold 133.5 million phones in the quarter and beating analysts’ average forecast of 130.7 million phones in the poll. The sales of Nokia product itself was more than its three closest rivals combined together. Do you know who its closet competitors are? Of course they are Sony Ericsson, Motorola and Samsung Cell Phones. The Finnish company has a strong lead in emerging markets including China and India, which it has been fiercely defending. Nokia and other large vendors increased their market share in the quarter at the expense of struggling Motorola, which said it would post an operating loss in the current quarter as recovery in its cell phone business was taking longer than expected. Whatever Motorola is losing, Nokia is gaining. And that trend was true throughout 2007, and the question is whether it will continue through 2008. If it will, Nokia is sure to cover the market more than 50 percentage by upgrading numbers. Nokia said it expected its market share to stay at the 40 percent level in the first quarter, but it is targeting market share growth in 2008. The average price of phones sold rose from the previous quarter to 83 Euros, beating analysts’ average expectation of 82 Euros. Helped by its larger scale, Nokia boasts much stronger profit margins than its rivals; the operating profit margin from its three cell phone business units grew to 23.8 percent. Its closest rivals in terms of profitability, Sony Ericsson and Samsung Electronics, reported profit margins of 13 percent and 11.4 percent, respectively. And top of all Nokia ruled the market by 40 percentages in terms of profitability.
