It is essential that the firm holds its nerve in the face of the current problems.”Meanwhile Nokia, the world’s largest cell phone maker, has announced continued strong growth during the first quarter and said it expects 20 per cent growth for the rest of the year.Net sales from January to March increased by 22 per cent on the same period last year to $7 billion and net profit was up 15 per cent at $880 million.Chief Executive Jorma Ollila said. “We were able to extend our leadership while managing the day-to-day challenges of a demanding economic environment.”Nokia has predicted growth of 20 per cent for the second quarter and the rest of the year. It also said that the total of handset sales globally in 2001 will be between 450 million and 500 million, down from an earlier prediction of between 500 and 550 million.Last year, Nokia sold 128 million handsets, 64 percent more than in 1999 Its net profit was $3.5 billion. The company, with headquarters in Espoo, just outside Helsinki, has more than 60,000 employees and sales in 130 countries. Ericsson and Sony in talks on merging mobile unitsEricsson, the Swedish telecom equipment maker, said yesterday it was discussing with Sony, the consumer electronics giant, a merger of their mobile phone handset operations.The new company has been strongly tipped to be based in Britain.

That could create hundreds of jobs in running the venture’s product design, management and marketing functions. Ericsson’s European head office is located in central London. The Swedish company said: “Ericsson wishes to clarify that both companies are in talks about potential collaboration in [the] mobile phone handset business, but nothing specific has been decided.” Ericsson will be pressed to provide further details about the venture when it announces first-quarter figures today. A collaboration with Sony, which characterised the talks as preliminary, would not overturn Ericsson’s decision earlier this year to shut two UK mobile handset assembly plants, in Scunthorpe and Nottinghamshire, with the loss of 1,200 jobs.

These plants are to close by September, though Ericsson is working with the Department of Trade and Industry in an attempt to sell the operations as going concerns.The shutdown of the UK plants followed Ericsson’s decision to outsource its entire handset manufacturing operation to Flextronics, a Taiwanese electronics group. That move followed years of rising losses in the division, which in 2000 surpassed £1bn.Analysts believe a link-up with Sony would help the Swedish group beef up its mobile phone marketing and design, in which it has struggled. Ericsson, with about 8 per cent of the worldwide handset market, and Sony, with a 2 per cent share, would still rank third in global terms, trailing Nokia’s 35 per cent share and Motorola’s 15 per cent.A Sony-Ericsson link-up could be the first of several such ventures. Other manufacturers, including Philips, Motorola and Alcatel of France, operate their handset businesses at a loss. Concerns about their future have escalated as handset sales have slowed in recent months.Analysts believe that Nokia, which has been the only consistently profitable mobile phone producer, might be the sole company big enough to go it alone.