Sales of Nokia Mobile Phones in the third quarter are expected to grow by 4% – 9%, compared with the third quarter 2001. Nokia sees mobile phone profitability in line, if not exceeding, earlier expectations. Pro forma operating margins are expected to be at or above 20%, reflecting good take up of Nokia’s new products, including the Nokia 7650 imaging phone.
Backed by a strong overall demand pickup especially in Europe during the first two months of the quarter, the company is increasingly confident with its full-year overall market volume estimate of 400 million handsets in 2002.
In mobile networks, the GSM market environment remained challenging with operator investments showing greater-than-expected declines. W-CDMA equipment deployment and testing is proceeding well and the company expects W-CDMA revenue recognition to start in the third quarter. As a result of the GSM market decline, Nokia Networks third quarter sales are expected to decline by approximately 5% compared with the third quarter in 2001, with Nokia Networks pro forma operating margins now estimated to be about 5% for the third quarter.