Price cuts knock Nokia's profits

PROFITS slid by almost a fifth at the world's largest mobile phones maker but a cut in handset prices helped win back market share.

Nokia's third-quarter results were, however, ahead of analysts' forecasts with pre-tax profits down 18% to €1bn (£688m) from €1.22bn a year ago while earnings per share slipped to €0.14 from €0.17 last time.

Slashing the cost of its phones may have hit handset revenue, down to €4.4bn from €5.1bn last year but the Finnish firm increased its market share to 33% from 31% in the previous quarter. Its stated target, however, is 40%.

The company also increased its forecasts for full-year handset sales by 30m units to 630m.

Nokia's share of the global market, which last year was 38%, has been hit by demand for camera phones and clamshells made by rivals Motorola and Samsung.

Mobile phones maker Sony Ericsson continued its bounceback in the third quarter, shipping 51% more phones - at 10.7m - than it did a year ago with 60% of these being camera phones. It also began to ship third-generation handsets for Vodafone. Pre-tax profits soared from €39m to €136 million as the average selling price of each phone increased sharply.