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Mobile market to grow 15 per cent: Nokia

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Author: WildC@rd

Nokia, the world's largest handset maker, has raised its forecast for global market growth thanks to strong subscriber demand. Chief executive Jorma Ollila said at a shareholders' annual meeting: "Nokia estimates that in the year 2006, the mobile device market volume will increase globally 15 per cent or more from our estimate of 795 million units in 2005." The Finnish company had previously forecast 10 per cent or faster year-over-year growth for the market. Kulbinder Garcha, a telecom equipment analyst at Credit Suisse in London, said: "This indicates obviously a very strong start to the year for the handset industry." Shares of Nokia in the US were up more than four per cent in midday trading on the New York Stock Exchange. Analysts said the strong growth was coming from emerging markets. To benefit from it, Nokia also announced three new low-priced phone models in China, and said it expects to sell them all in "tens of millions." Analyst Richard Windsor from Nomura Securities said: "It is interesting that the level of interest in these devices will be very low, but their actual importance is really high." "These phones are going to be the bulk of their low-end over the next 12 to 20 months, and their functionality is very important," he said. Nokia's rivals, like Sony Ericsson, have in the last months announced they will start to push out cheaper phone models, trying to get a stake of the fast-growth market where Nokia and Motorola have dominated, but Nokia said it is ready to defend its position. "You need scale that is just immense in order to compete in this area," Soren Petersen, head of emerging markets operations at Nokia's mobile phones unit, told Reuters in an interview. Ollila said Nokia has a 20 per cent cost advantage over its rivals in phone making. Big volumes of cheaper phones sold in emerging markets have helped to boost revenue for Nokia, which sells one in three of all mobile phones around the world.
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