DJ MARKET TALK: Nokia Handset Margins To Fall-Morgan Stanley

11/13/06 - Dow Jones Newswires

1135 GMT [Dow Jones] Nokia's (NOK) handset margins will continue to decline to 12.9% in '08 from 15.6% in '06, says Morgan Stanley. For handset operating margins to improve, there will have to be a reversal in Nokia's gross margin trend seen over the past two years, adds Morgan Stanley. This is unlikely due to a more competitive environment in the low-end and 3G markets as well as a sustained intense competition in the mid-end. Says price cuts will be much more difficult to implement, and operating expenditure efficiency gains, which have cushioned gross margin declines, are likely to slow down. Shares +0.9% at EUR15.34. (JHC)

 
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(END) Dow Jones Newswires

November 13, 2006 06:35 ET (11:35 GMT)

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