Even before

Ericsson

(ERICY)

warned Monday that it would post a first-quarter loss and before

Motorola

(MOT)

said two weeks ago that it might lose money in the quarter, there

were concerns about

Nokia's

(NOK) - Get Report

performance.

So with its two chief competitors warning, it's only natural that the worries about Nokia would intensify, right? Actually, there's a small but growing contingent of observers who believe it might

exceed

Wall Street's first-quarter expectations.

They say the Finnish company, while not immune to deteriorating industry fundamentals, is savvy enough to grab market share to make up for any shortfall in demand for cell phones.

For instance, on Friday, Ed Snyder, an analyst at

J.P. Morgan Chase

, gave a rather bullish pronouncement of Nokia's prospects this quarter, telling investors that he expects it to exceed expectations for unit volume, revenue, earnings and average selling prices. (He rates Nokia a buy, and his firm hasn't done underwriting for the company.)

Big Deal

If market leader Nokia were able to pull this off, it definitely would set it apart and possibly could help its stock, which is off 48% so far this year. But with investors running from tech companies, it may not matter.

And of course for now many investors are betting Nokia will follow its competitors. On Monday its stock closed down $1.38, or 6%, at $21.42 as the markets were bludgeoned by investors worried about tech earnings.

That's only natural, as both No. 2 Motorola and No. 3 Ericsson have emphasized deteriorating industry-wide and economic conditions, especially in the U.S., for the

slowing growth of cell phone handsets and wireless infrastructure equipment. The dimming prospects of the handset industry could hit Nokia hard, considering the company garnered 72% of its sales from cell phone handsets in 2000.

Those who believe that Nokia will miss its numbers -- the consensus estimate of analysts polled by

First Call/Thomson Financial

is 17 cents -- cite the same problems that Ericsson cited on Monday for its shortfall: Fewer people than expected are

replacing their current phones, wireless carriers have reduced the subsidies they pay to entice consumers to buy phones, and high inventory levels have forced some phone manufacturers to cut prices on selected phones in order to sell them.

"This whole economic weakness has hit everybody," says Rose Papp, a co-manager of

L. Roy Papp & Associates' Papp America Abroad

fund. (The fund has a position in Ericsson and Nokia.)

"It's possible that on units they're going to be where they said they're going to be," Papp adds. "But pricing pressures could translate into selling units at lower prices, so you could have a revenue shortfall."

Big If

But what if Nokia actually is strong enough to push through all this?

Its market share stood at 33.9% at the end of 2000, well above its competitors, according to research firm

Dataquest

. And should that share increase while estimates for industry-wide handset sales growth in 2001

fall, the company could well continue to distinguish itself. In fact, the company aims to aggressively take market share, Jorma Ollila, Nokia's chairman and chief executive, said when announcing fourth-quarter numbers at the end of January.

Analysts often laud the company for its execution, strong balance sheet and its muscle in both the handset and infrastructure markets. And Jeffrey Schelsinger, an analyst at

UBS Warburg

, believes that Nokia's share price could increase 30% by the end of the year, as wireless networks and handsets begin to transmit data, in addition to voice. (He rates Nokia a buy, and his firm hasn't done underwriting for the company.)

Snyder at J.P. Morgan Chase notes that Nokia is continuing to build its market share in phones that run on the GSM, or global system for mobile, and CDMA, or code division multiple access, wireless standards. He also indicated that there's still strong demand for Nokia phones, with some orders on backlog.