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Nokia: Record sales thanks to Middle East and Africa
…as others struggle to develop

By Marguerite Reardon

Published: Friday 25 January 2008

Nokia has announced it has sold a record 133.5 million mobile phones during the fourth quarter of 2007. This figure was up by more than a quarter from the same period a year earlier, boosting its overall market share to 40 per cent, due in large part to its position in developing markets.

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Meanwhile, Nokia rival Motorola reported shipments of its handsets had fallen 38 per cent during the quarter, pushing its market share down to 12 per cent - the lowest level since 2001.

Sony Ericsson has also had trouble growing its market share. The company, which targets the high-end market in Europe, only grew its market share in 2007 by two points to nine per cent.

Nokia reported it saw the strongest growth in sales in the Middle East and Africa. Shipments were up 52.3 per cent. Asia-Pacific and China also saw strong sales growth, while sales in mature markets like North America fell during the quarter.

But Nokia has also been making money in these markets. For the fourth quarter of 2007, Nokia boosted profit by 44 per cent, to $2.68bn, on sales of $23bn. While Nokia clearly benefits from the high production volumes, the company has also been aggressively working to keep costs down. This has meant changing packaging for products sold to emerging markets and closing a factory in Germany in an effort to reduce overall costs.

But Nokia's competitors, including Motorola, Samsung and Sony Ericsson, have had problems addressing the low end of the market.

Motorola's executives see scalability as an issue going forward. But Motorola CFO Tom Meredith said the company also needs to build more targeted products at the right price points.

Meredith said: "We need to be not so much a producer of volume to get scale. We've got to produce the right design point with the right features and functionality at the right cost. And if we do that, scale will be less of an obstacle than it is perhaps today."

Even though Nokia currently dominates markets like China and India, competition is on the way. Sony Ericsson has said it plans to launch four handsets over the summer that will target India, a country that added more than 8.2 million mobile phone users last month.