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Color Screens, Digicams Boost Nokia Phone Sales

Helsinki, Finland – With color screen and camera phones driving the once-again healthy mobile phone market, Nokia cellphone sales climbed 4 percent in the fourth quarter, hitting $8.9 billion, up from $8.5 billion in the year-ago period.

Operating profit for Nokia’s mobile phone business in the fourth quarter also jumped 4 percent, reaching $2.2 billion, excluding special items, compared with $2.1 billion in the same three months a year ago. Operating margin held fast at 24.7 percent.

Nokia estimated overall mobile phone volume in the fourth quarter would hit 143 million units, a 23 percent increase year-on-year, while Nokia’s fourth quarter phone volume rose 20 percent, to 55.3 million units.

For the 12 months, Nokia cellphone sales increased 2 percent, reaching $29.8 billion, up from $29.3 billion in the previous year. Cellphone segment operating profit for the 12 months rose 5 percent, up to $7 billion, from $6.7 billion in 2002.

Cellphone market volume growth for the year climbed 16 percent, to 471 million units, with Nokia outpacing the overall business, registering an 18 percent volume increase, to 179 million units.

Nokia, which is riding the crest of mass-market adoption of more advanced cellphones, reported an increase in the average selling price in the fourth quarter. Half of the company’s handset volume in the fourth quarter had color screens.

The company anticipates about 10 percent growth in the overall mobile phone market in 2004, due mainly to increased penetration in growth markets and ongoing upgrades in developed markets.

Nokia estimated the number of global mobile subscribers at 1.3 billion, and forecasts this number will reach 2 billion in 2008.

Although Nokia enjoyed a healthier phone business in the fourth quarter, its lagging networks sales hurt overall company numbers.

Consolidated Nokia sales in the fourth quarter slid 1 percent, down to $11.1 billion, from $11.2 billion, while restructuring results pushed overall operating profit for the three months up 12 percent, excluding special items, to $2.3 billion, from $2.1 billion year-on-year. Net profit rose 9 percent, hitting $1.7 billion, up from $1.6 billion.

For the 12 months, consolidated Nokia sales dropped 2 percent, to $37.2 billion, down from $37.9 billion year-over-year. Consolidated operating profit, excluding special items, was off 6 percent, down to $6.4 billion, from $6.8 billion. Net profit slid 5 percent, to $4.7 billion, from $5 billion.