Cheap Phones Boosts Nokia's Profits

Robust demand for cheaper phones boosted third-quarter earnings at Nokia, the world's biggest maker of cell phones, with the better than expected profits sending its shares higher.

Although phone prices fell, volumes were up and profit margins improved thanks to tight cost controls.

Nokia sold 112 million phones in the quarter, more than its three closest rivals combined, as consumers in emerging markets rushed to buy Nokia's ultra-cheap models.

"The sub 30 euro segment grew very nicely," Chief Executive Olli-Pekka Kallasvuo told Reuters. "We are quite strong in that segment."

The Finnish company has a strong lead in emerging markets including China and India, which it has been fiercely defending.

With about 8 million new clients signing up for mobile telephony each month in India alone, the world's leading cell phone makers are falling over each other to woo first-time buyers with low-priced handsets.

Nokia's shares have risen 70 percent so far this year, boosted by strong growth in the cell phone market and its increasing lead over rivals as Motorola failed to attack Nokia's stronghold on the lower end of the market.

source: reuters