Mobile phone giant Nokia expects to exit the year on a high note, despite tough economic conditions worldwide, riding on the faster-than-expected uptake of Internet phones. Timo Toikkanen, Nokia's general manager for Hong Kong and Macau, said: 'GPRS [general packet radio services] has started very well in Hong Kong this year and we are selling a lot of the phones. It's doing better than we expected.' Mr Toikkanen said this year's slowdown had not disrupted the company's plans in Hong Kong. 'Everything progressed exactly to the plan,' he said. Nokia is benefiting from the launch of its slim 8310 GPRS fashion phone, the 6310 professional phone and the 5510 youth entertainment device. Mr Toikkanen said the 8210 and 8310 were the best sellers in Hong Kong and Macau. Last week Nokia said it may beat its fourth-quarter earnings target as a result of Internet phone sales this holiday season. Nokia will release earnings for October to December on January 24 next year. Nokia, along with its rivals Motorola and Sony Ericsson, has been hit by the global economic slowdown. Nokia last month said it expected to sell 380 million phones this year, down from more than 400 million phones last year. The company responded to tougher conditions by cutting about 4,700 jobs from a 60,000-strong workforce and closing plants to drive costs down. Mobile phone manufacturers saw orders from telecommunications operators cancelled as they struggled with debt and consumers delayed purchases of new phones until attractive services giving quick access to the Internet were widely available on the market. The company's new range of Internet handsets sell for the highest margins in the industry. 'By 2003, 50 per cent of all our phones will have GPRS. That's a global average which means Hong Kong will reach that percentage earlier,' Mr Toikkanen said. GPRS technology offers an 'always-on' Internet connection through a mobile phone. Analysts said that while GPRS phones were selling well, not many people were using GPRS services. International Data Corp analyst Manny Lopez said: 'GPRS really began in the third quarter of the year when market conditions were at their worst. The number of GPRS handset owners subscribing to GPRS services is tiny. We expect GPRS services uptake to improve next year as SMS [short-messaging service] paves the way for mobile Internet.' Mr Lopez said access to e-mail using GPRS phones would be one of the main attractions for Internet phones. 'There are basically three groups of applications that will spur Internet handset growth. The first is messaging, especially multimedia messaging. The second is games and downloading, with Java as the main enabler and the third is browsing on the phone with XML [extensible mark-up language] and GPRS as enablers,' Mr Toikkanen said. According to research firm Gartner Group, Nokia's global market share in the third quarter was more than 33 per cent, compared with 35 per cent earlier in the year. Competitors Motorola and Sony Ericsson gained ground during the year with new Java phones and other Internet-enabled phones. Sony Ericsson recently launched the T68, featuring a full-colour display with a joystick for navigation. Two weeks ago Nokia launched a phone sporting a similar concept - the 7650 - with integrated digital-camera, which will ship to Hong Kong early next year. 'One of my biggest challenges next year would be to keep up with the launch and ramping up of new phones and then launch and ramping up again. We are expecting more product roll-outs next year than ever before,' Mr Toikkanen said. He said next year would be the year for multimedia messaging services riding on SMS, which recently received a significant boost in Hong Kong as networks become inter-operable. 'We think multimedia messaging will do very well next year. We will roll-out devices that enable such services,' he said, citing the upcoming colour 7650 and 5510, which centres around the increasing use of data on phones. The company will launch a Chinese version of the Nokia Communicator 9210 early next year. The mobile phone operating system battle is expected to intensify next year as Microsoft releases its Stinger operating system for mobile phones. The new Microsoft OS is expected to compete against the Palm operating system and Symbian's Epoc. 'Our Symbian position is very clear. We see it as a viable operating system and there will be several products released next year running Symbian from European manufacturers. Symbian is an open platform, it works very well with Java and I think the industry is going forward in those directions,' Mr Toikkanen said.