Nokia Oyj, world’s largest cell-phone maker, disappointed shareholders twice in the past three years by failing to keep up with consumer trends. This time, the company may have it right.

Models such as 550 euro ($759) N95 are paying off as customers trade up from starter phones in India and China.

The shift is restoring profit margins that Chief Executive Officer Olli-Pekka Kallasvuo sacrificed last year when he focused on cheaper phones to win sales in those countries, where Nokia is the dominant brand.

Nokia is touting the N95, with a dual-sliding cover, GPS navigation and a 5 megapixel camera, and the 250 euro 6300 slim phone to affluent users in Mumbai and Beijing, as well as the U.K. and Europe. The popularity of these handsets will help prop up Nokia's average selling prices, said analysts.

Profit gains
In China, Nokia's biggest market, the company's unit share was about 42 per cent in the first quarter, according to IDC. In India, Nokia has about two thirds of the market, news papers reported in May. The company doesn’t break out India figures from Asia-Pacific region. Amid a global slump in handset prices, Nokia exploited its size to lower production costs more than rivals, and eked out an expansion of its gross profit margin to 33.1 per cent of sales in the first quarter from 32.4 per cent in the fourth.

Jump in sales
Nokia had a profit of 1.14 billion euros, or 28 cents, a year earlier, including a gain from an asset sale. Sales jumped 31 per cent to 12.9 billion euros from a year earlier, according to the average estimate. Nokia has also capitalized on missteps at Motorola, which said last week that second-quarter sales will miss its forecast, the third time the company has fallen short of its own predictions this year.

Nokia lowered its prices last year in emerging markets to keep Motorola’s share from rising and ensure scale advantages'.

Nokia controlled 36.2 percent of the global market in the first quarter, up from 33.2 per cent a year earlier, according to researcher Strategy Analytics Ltd.

Nokia’s sales in China and the Asia-Pacific region each jumped 39 per cent last year, after Kallasvuo focused on selling entry-level phones. India, is Nokia's third-largest territory. Revenue in China has risen 75 percent since 2002.