London, Sept. 11: For the fifth time this year, Nokia, the world’s biggest cell phone maker, has reduced a target for sales. But the company said on Tuesday that its profits in the third quarter would come in at the top end of its forecast range.
The gloomy sales forecast for the July-September period reflected a stubborn decline in the fortunes of telephone companies around the world. The companies are struggling with huge debts from their late-1990s expansions and have little or no cash available for new investment in their networks; such investment is the source of one-fifth of Nokia’s sales.
Delays and glitches in the introduction of “third generation” digital services have clouded hopes for new income streams to pay down debt and extend the mobile-phone boom into a new century.
Investment by telephone companies in wireless technology showed ``greater-than-expected declines, Nokia said on Tuesday.
Analysts said Nokia’s main problem is falling demand for network equipment like base stations and switches. In the handset market, which it dominates, Nokia is outpacing rivals like Ericsson and Motorola with new colour-screen phones and phones equipped with tiny cameras to transmit images as well as sound. European mobile phone companies like the Orange unit of France Telecom have begun major promotional pushes for the new phones ahead of the usual seasonal surge in sales at the end of the year.
Nokia, based in Finland, said Tuesday that sales in the third quarter would probably be 7.1 billion to 7.4 billion euros ($ 7.0 billion to $ 7.25 billion); its previous forecast, in July, was for 7.6 billion euros.
Network sales will probably be off 5 per cent, compared with the third quarter of 2001, while handset sales will probably rise 4 per cent to 9 percent, the company said.
Nokia repeated its earlier forecast that 400 million handsets would be sold by all makers in 2002. Nokia says it has about 36 percent of the market.
Nokia’s stock, which accounts for half the market value of the Helsinki Stock Exchange, fell sharply during the day but recovered to close at 14.09 euros in Helsinki, off 0.07 euro.