Mobile phone giant Nokia has cut back sharply its growth forecast for handset sales - for the second time in as many months.

The world's largest maker of mobile phones said sales would rise by not more than 10%. Earlier this year the firm had confidently predicted a growth rate of at least 15%.

Profits, however, would not be affected, the firm told investors at its mid-year strategy meeting.

The cutback in future growth is portrayed as a sign of overall market weakness, with Nokia's management insisting that the Finnish company will hold on to its 40% share of the mobile phone market.

Smart phones, fancy phones

Nokia believes that over the year the industry will still be able to sell between 400m and 420m handsets.

During 2001, customers bought 380m mobile phones worldwide. It was the first time since 1990 that phone sales had dropped year-on-year.

Fancy phones and smart phones will be key to staying number one, Nokia believes. Gadget lovers are promised that by year-end they can choose between up to 10 different Nokia models featuring colour screens.

High-end smart phones - complete with organiser, e-mail, internet access and other features - are another area of expansion, with Nokia boss Jorma Ollila predicting monthly sales of such phones to surpass the one million mark by October.

Hopes for next-generation messaging

Mobile phone makers around the world, though, continue to be upbeat about the future.

They hope that next-generation services like multi-media messaging (MMS) will persuade consumers to upgrade their phones, and mobile phone networks to improve their hardware.

MMS allows users to send pictures and sound alongside with text.

Nokia's Jorma Ollila believes that there will be 10 MMS-enabled telephone networks available across Europe by the end of September.

Provided they have signed up with the right network and got the right phone, users should then be able to "roam" through Europe, take holiday snaps with their MMS phones and send them back to loved ones and envious friends.