Net profit in Q4 of 2005 came to 1.07 billion euros (US$1.32 billion), down from 1.08 billion euros a year earlier. Nokia's net sales grew by nine percent to 10.3 billion euros (US$12.66 billion), from 9.46 billion euros in the last quarter of 2004.

Annual net sales grew 16 percent to 34.2 billion euros (US$42 billion) and net profit was up 13 percent at 3.6 billion euros (US$4.4 billion). Nokia has, however, suffered one percent drop in Q4 earnings due to the increased sales of its low-cost handsets in the emerging markets, which has negatively impacted its average selling price.

Average selling price (ASP) of Nokia handsets had dropped to 99 euros in Q4, down from 102 euros in the preceding quarter and 111 euros in the Q4 of 2004. The company expects the ASP will be either flat or slightly down in the Q1 of 2006.

Nokia's Chief Executive Jorma Ollila, however, remains unconcerned, "The fall in the ASP will, of course, continue for a while, and that's a good thing because in the emerging markets a majority of handsets are being sold to people who have never conducted a single telephone conversation in their lives." He said the price really has to come down so that Nokia can serve the great majority of the world's population.

In 2005, Europe accounted for Nokia's 42 percent net sales (41 percent in 2004). Asia-Pacific contributes 18 percent market share, up from 16 percent in 2004 while its penetration in China rose to 11 percent in 2005 from 10 percent in 2004. Middle East and Africa account for Nokia's 13 percent net sales, up from 12 percent in 2004. Nokia has lost two percent market in North America and one percent in Latin America.

The company has gained market share in Asia-Pacific as a result of the rapid growth of the Indian market and Nokia's strong position in that country, driven by much the similar competitive strengths as in China.

In Middle East and Africa, Nokia's volume growth was somewhat below regional industry volume growth, resulting in a loss of market share in Latin America, and Nokia's mobile device volumes grew, although much less than the overall market, resulting in a substantial market share loss in 2005.

Nokia also makes cellular mobile network equipment and its 2005 net sales increased two percent to 6.6 billion euros, compared to 6.4 billion euros in 2004. Operating profit of this unit for 2005 has, however, declined to 855 million euros from 884 million euros in 2004.

Nokia has predicted that the mobile phone market would grow by more than 10 percent in 2006, adding that its aim was to increase market share both in handsets and networks, but gave no figures.