After affecting Ericsson's results earlier this week, the economic downturn has now hit Nokia with the mobile phone giant reporting worse-than-expected fourth quarter sales and profits. The news impacted the Nokia share price which fell by 9 per cent on the Helsinki exchange. The Finnish vendor posted net profits of US$744 million for the three months to 31 Dec. 2008, down a staggering 69 per cent year-on-year, while sales slid 19 per cent to US$16.4 billion.
Nokia is forecasting handset sales will fall by 10 per cent in 2009, double what the company was estimating just a month ago. The overall device market shipped 305 million units in the fourth quarter of 2008, down 9 per cent year-on-year and down 2 per cent sequentially. Nokia's own mobile phone sales were down 15 per cent year-on-year at 113.1 million units and down 4 per cent sequentially. The company's market share in Q4 was 37 per cent, down from 40 per cent in the same quarter in 2007.
Nokia has identified smartphones as the key to growing its market share. Although Nokia currently has around 32 per cent of the smartphone market it believes its smartphone portfolio is heading in the right direction, citing the 5800 and N97 as examples. Nokia plans to focus on five core service areas: music, maps, media, messaging and games.
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