Nokia Expects 25% Spike In Mobile Phone SalesNokia Expects 25% Spike In Mobile Phone Sales

Nokia Corp., the world's largest maker of mobile phones, surprised analysts and investors last week with something the cellular industry hasn't seen a lot of lately: good news. In updating the outlook for its fiscal fourth quarter, the company says it may beat its previous earnings forecast, thanks to booming sales in October and November.

Nokia (NOK--NYSE) expects mobile phone sales to increase 25% over the third quarter and total sales to rise 20%. The company attributes some of the sales surge to strong demand for its new high-end, high-margin 8310 General Packet Radio Service phone in Europe, and to brisk U.S. phone sales.

New features such as instant-messaging services are the primary drivers of rising phone sales, says Farpoint Group analyst Craig Mathias, and data will play that role in the future. There's some effect from the Sept. 11 attacks from people who became more concerned about personal safety. But that won't last, and the voice market overall will plateau in just a few years. Says Mathias, "The sustaining market's going to be based on that data."