Apathy forces Nokia to lower sights

THE world's biggest mobile phones manufacturer, Nokia, has lowered its sales forecasts for the second time in two months against a backdrop of sluggish demand for new handsets.

Despite constantly upgrading the technical gadgetry on its models, Nokia is still suffering from what analysts fear could be a long-term apathy among consumers towards jazzy new products.

Nokia has no fewer than 30 new models scheduled to reach the shop shelves this year and has especially high hopes for its new colour screen phones. But it lowered its sales forecasts for the second half of the year to 'up to 10%' from its earlier expectations of 15%.

The company set itself a long-term sales target of 'more than 10%' from 2003. However, the company is sticking with its previous profit forecasts. The shares, which have lost half of their value this year, slipped only marginally after a heavier slide on Wednesday. 'The boom days are over,' said one fund manager.

Along with competitors such as Motorola, Nokia is cutting costs in the face of the declining growth rates for the sector. Earlier this week both Nokia and arch-rival Sony Ericsson unveiled new handsets able to send and receive pictures and photos in the hope of reigniting the public appetite.

Virgin Mobile will today confirm plans to crack the US mobile phone market this summer. Virgin is teaming up with Sprint PCS, one of the biggest operators in the US market, to provide pre-pay phones.

Only 45% of Americans have mobiles compared with more than 75% in Europe. The pre-pay formula that has revolutionised European buying habits is practically unheard of in the US.