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Nokia Oyj, the world's largest maker of mobile phones, said second-quarter profit rose 43 percent, the biggest increase in more than three years, on growth in China and India and sales of pricier handsets in Europe.

 

Net income rose to 1.14 billion euros (US$1.44 billion), or 28 cents a share, from 799 million euros, or 18 cents, a year earlier, the Finland-based company said in a statement to the Helsinki stock exchange yesterday.

 

Sales rose 22 percent to 9.81 billion euros from 8.06 billion euros, Bloomberg News reported.

 

Chief Executive Officer Olli-Pekka Kallasvuo, who took over on June 1, is increasing sales by introducing cheaper handsets aimed at China and India, while selling multimedia phones with music players and cameras in Europe and the US.

 

Nokia's profitability is under intense pressure as stiffer competition from Motorola Inc and Samsung Electronics Co is pushing average prices lower. Meanwhile, Motorola yesterday posted profit and sales that beat analysts' estimates.

 

"Despite the nice stories about growth in China and India, it's clear the competition in all segments, not just emerging markets, is fierce," said Theo Maas, who helps oversee US$300 million at the ABN Amro IT Fund in Amsterdam, including Nokia and Motorola shares.

 

The Finnish company said its market share in the second quarter was 34 percent, down from 35 percent in the first quarter and up from 33 percent the same period a year earlier.

 

North American revenue rose 5 percent to 674 million euros, while unit sales fell 13 percent in the region, suggesting more expensive phones were sold.

 

Sales in Europe rose 13 percent to 3.64 billion euros. Sales in China increased 44 percent to 1.24 billion euros, while revenue elsewhere in the Asia-Pacific region, including India, gained 47 percent to 2.06 billion euros.

 

(Shanghai Daily July 21, 2006)