Nokia, the world's biggest mobile phone manufacturer, today reported net profit for the fourth quarter in line with expectations, but forecast further falls in the selling price of handsets in 2006.
The Finnish company said that net profit in the quarter had slipped by 1% to €1.073 billion, but that earnings per share had risen to 25 cent against 24 a year earlier.
The group also said that the average selling price (ASP) for its mobile phones, which has steadily declined, fell to €99 in the fourth quarter, from €102 in the third quarter and €111 in the fourth quarter of 2004.
Nokia said that the average selling price would fall further in 2006, a development 'primarily driven by a mix shift in our volumes to markets where low-end models predominate'. It said that lower selling prices were 'consistent with the industry trend, specifically the strong volume growth in emerging markets'.
Nokia's global market share increased by a modest single percentage point to 34% in the fourth quarter from 33% in the third, which dampened expectations by analysts that Nokia could hit the 40% mark this year.
Group sales increased by 9% to €10.33 billion overall, and by 6% for the core mobile phone operation alone. But networks and enterprise solutions showed a fall in sales, leading to a 6% decline in group operating profit to €1.368 billion.
Nokia's chief executive Jorma Ollila said that unit sales in 2005 had been driven by gains in China, the Asia-Pacific region as well as Europe.
Nokia also said it would buy back €6.5 billion worth of its own shares this year. Share buybacks are often used by companies with excess cash to shore up their share price. Nokia raised its dividend to 37 cent per share for 2005 from 33 in 2004.
