January 2, 2009 / 12:46 AM / 11 years ago

Nokia CEO to favor profit over sales targets: report

HELSINKI (Reuters) - Nokia will focus on profit development amid a falling cell phone market in which many competitors are cutting prices, Chief Executive Olli-Pekka Kallasvuo told the Financial Times.

Nokia Chief Executive Officer Olli-Pekka Kallasvuo listens to a question during the Nokia Capital Markets Day in New York, in this file photo from December 4, 2008. REUTERS/Brendan McDermid

“We will continue to combine market share and margins in the right way in order to maximize the bottom line,” Kallasvuo was quoted as saying in an interview. This in stark contrast to some of its smaller rivals, like LG Electronics, who have said they will do anything to reach their sales targets.

Nokia lost some market share in the second half of last year as it shied away from some fierce price battles.

Cell phone market is expected to see its weakest year in 2009, with analysts forecasting on average for a 6.6 percent fall in sales volumes.

Nokia expects to weather the fall better than some rivals.

“When times are tougher, people who have stronger positions fare relatively better than the competition . . . So, overall, I believe many of our competitors will have limitations here in terms of their ability to do things,” Kallasvuo told the paper.

Nokia has said it aims to increase its cell phone market share in 2009, helped by consumers’ appetite for cheaper models.

“The fact that we are commercial in all price points will give us the possibility, if the trade-down happens, to sell another device, which is not always the case with competitors who have a more limited portfolio,” Kallasvuo said.

Nokia has bought a dozen companies — including an $8.1 billion acquisition of mapping company Navteq — to jump-start its Internet business as growth in the cell phone market stalls.

Nokia has said it was looking for smaller acquisitions to strengthen its Internet services offering, and Kallasvuo told the paper the company does not have “any big pieces missing” in its services portfolio.

Reporting by Tarmo Virki; editing by Gunna Dickson, John Stonestreet

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