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Nokia: 1B users by mid-2002
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December 5, 2000: 3:11 p.m. ET
Subscribers growing ahead of schedule; Finnish firm has 30% share
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LONDON (CNNfn) - Nokia Oyj cheered weary technology investors Tuesday by saying one billion people, or just under a fifth of the world population, will own a cellular handset by the middle of 2002, six months ahead of its goal.
The Finland-based company said its revenue would grow between 25 percent and 35 percent a year through to 2003. The world's No. 1 mobile phone maker expects first-half 2001 revenue growth to be in the upper range of 25 to 35 percent, the company said.
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 CNNfn's Diana Muriel takes a look at Nokia's predictions and impact on competitors. |
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In U.S. midafternoon trading, shares of Nokia (NOK: Research, Estimates) surged $5.38, or 12 percent, to $49.94.
Analysts said the upbeat comments from the world's biggest mobile phone maker could provide a banner for other tech firms to rally around.
"Nokia remains a core wireless holding and represents a safe haven during the current market volatility due to its ability to outperform in handsets and infrastructure," said Credit Suisse First Boston analyst Marc Cabi in a research note Tuesday.
Chief Executive Jorma Ollila said Nokia is extending its market share and now had a global share of more than 30 percent, almost twice the size of its nearest rival.
"In the mobile world, the best is yet to come," Ollila said in a statement from Nokia.
"It certainly sounds like a reiteration of what we already know, but with a little bit of spice added on top," said Ed Protheroe, a fund manager at Aberdeen Asset Management, which has $2.47 billion under management and holds Nokia stock.
"It reaffirms the Nokia story at a time when people are looking for visibility in earnings and revenue growth," Protheroe said.
Sweden's Ericsson, the world's No. 3 mobile phone maker, and No. 2 Motorola Inc. (MOT: Research, Estimates) have painted a less upbeat picture of the cell-phone market. Ericsson blamed its loss-making handset unit for cutting its overall profit forecast for the fourth quarter.
Investors have been concerned over a possible slowdown in revenue growth for technology stocks and the cellular industry in particular. The DJ Stoxx technology index of 39 leading European stocks has lost a third of its value since March 6.
Nokia's forecast pushed the index up 5.3 percent in midafternoon trade Tuesday. Nokia, which is a component of the index, jumped 6.7 percent to  52.68, but is still below its June 20 lifetime high of 65.
Rival AB Ericsson added 2.1 percent to 122 Swedish crowns in Stockholm and France's Alcatel SA (PCGE) climbed 6.5 percent to 64.35, while Motorola Inc. (MOT: Research, Estimates), which has 16 percent of the global market, rose 1 percent in Frankfurt.
Nokia said there would be more Web-connected handsets than personal computers in the world as early as 2002, versus earlier projections of 2003.
The company expects the market for Internet-enabled handsets to reach 60 million this year, of which Internet-enabled phones would make up 40 million. For next year it expects Web-enabled handset volumes to increase to around 200 million.
Nokia said it set up a cost-saving target of over 1 billion ($888 million) per year by 2003, which it plans to achieve as it transforms itself into an e-business company.
The company also said the cellular network market, which provides technology for the mobile phone market, will grow at about 30 percent annually over the next three years to about 90 billion in 2003.
--from staff and wire reports 
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Nokia
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