Average Nokia handset prices are 110 euros

Profits for the three months to end March were up 18% at 836m euros, from 729m euros in the year-ago quarter.

Sales were 17% higher at nearly 7.4bn euros, up from 6.4bn euros.

Nokia was upbeat on the future, with its shares up more than 5.5%. Motorola also saw double-digit growth in quarterly profits.

Faster growth

Both companies were bullish about the mobile industry as a whole. Jorma Ollila, chairman and chief executive of Nokia, said there was 20% industry growth in the first quarter compared with a year ago, with Nokia growing in line with the rest of the market.

This marked a strong start for the year and prompted an upward revision of our 2005 annual market volume estimate Jorma Ollila, chairman and chief executive of Nokia

"This marked a strong start for the year and prompted an upward revision of our 2005 annual market volume estimate to about 740 million units (from 712.9 million)," he said.

Mr Ollila, who normally expresses himself with Finnish understatement, pronounced himself "extremely satisfied" with the company's first-quarter results.

He said sales of mobile infrastructure were more profitable than forecast. Chinese handset sales grew strongly, with China now the company's biggest market.

Sales in the US and Latin America were disappointing, however. There was also "some weakness in 3G devices at the industry level," he said.

Fashion factor

We're executing and we're taking market share and growing the company Motorola chief executive, Ed Zander Motorola's share price

Motorola also benefited from industry growth as well as the turnaround strategy of Ed Zander, the company's chairman and chief executive.

Its shares rose more than 5% in afternoon trading after it reported its results for the three months to end March in the US late on Wednesday.

Motorola's profits rose 14% to $692m, up from $609m a year earlier.

It benefited from a strong product line up, including the ultra-flat Razr, one of the season's must-have phones.

Although not sold in large volumes, Razr has helped to position Motorola as a cooler mobile brand. For 2005, products include the concisely-named Pebl (said to resemble a pebble) and Slvr.

Motorola benefited from the $234m sale of shares in US mobile operator Nextel, a customer of Motorola's walkie-talkie like push-to-talk technology.

"We're executing and we're taking market share and growing the company," Motorola chief executive Ed Zander told Reuters.

In the first quarter, Motorola said it increased its market share to 17.1%, a rise of 1.4 percentage points. It is second only to Nokia in terms of the numbers of mobile handsets it sells.

However, Motorola's costs per handset are fairly high and the margin it makes on mobiles is about 10% whereas Nokia makes 15.1%.