Nokia is facing fierce price competition in emerging markets

Nokia reported profits in the third quarter of $1.05bn (£600m), up 29% on the same period last year.

Sales rose to $10bn in the quarter, up by 18% compared with one year ago, as the company sold 66.6 million mobiles, giving it a 33% market share.

However, Nokia shares were marked down on the Helsinki exchange by 2.6% as sales figures were below expectations.

'Growing strength'

"Profitability was driven by an excellent performance from our device businesses," Nokia chief executive Jorma Ollila said.

"This was backed by growing strength in our product portfolio and our ability to manage costs and execute well."

Nokia said it was raising its forecast for the overall size of the mobile phone market to 780 million units for the year, an increase of 20 million.

However, analysts worried that much of current sales growth was driven by expansion into developing country markets, where prices and margins are lower.