With record shipments came record profits, and the Finnish firm's stock rose more than 4% in early trading Thursday. The glowing numbers are likely to place additional pressure on Motorola, whose market share has been dropping.
Nokia reported profits of EUR 1.56 billion ($2.21 billion), an 85% gain in net profit compared to a year earlier. Sales were EUR 12.90 billion ($18.31 billion) in the quarter.
"Nokia strengthened its leading position in the device industry in the third quarter," said CEO Olli-Pekka Kallasvuo in announcing the results. "In a strong market, we simultaneously gained market share and increased our operating margins." Kallasvuo said the company's competitive edge looks promising to continue next year.
Nokia exploited its full supply chain as it continued to flood the market with advanced devices on the high end, beefed-up its mid-range phones, and continued to move aggressively in emerging markets like China and India.
Even its acquisition of Siemens' sagging wireless and fixed mobile network business showed unexpected promise, as Nokia said the cost savings for Nokia Siemens Networks is improving and the company expects to save another EUR 500 million ($709.8 million) in addition to the previously identified EUR 1.5 billion ($2.12 billion) in cost savings.
A highlight was shipments of mobile devices, which continued to rise and outpace competitors. "In the third quarter of 2007, the total mobile device volume achieved by our Mobile Phones, Multimedia, and Enterprise Solutions business groups reached 111.7 million units, representing 26% year-on-year growth and an 11% sequential increase," Kallasvuo said.
Nokia noted that overall industry volume was 286 million units -- a 17% year-on-year growth and a 9% sequential increase.
The company said it expects "very slight" market growth in mobile and fixed infrastructure markets, an area in which it has slight exposure. Earlier this week Ericsson reported slowing growth in its flagship infrastructure markets, which sent the Swedish company's stock tumbling.
In an analysts meeting following the release of Nokia's financial report, Kallasvuo said Nokia is paying close attention to competitors Research in Motion and Apple. Both RIM with its Blackberry family and Apple with its iPhone compete with Nokia's N-series family.