Nokia ups the ante cutting phone prices

Nokia is cutting prices for many of its handsets in July, according to market data and industry sources, putting further pressure on its rivals' already thin profits, a Reuters report said.

Manufacturers are facing an increasingly intense battle for market share as demand for pricey phones has started to slow in the US and Europe, where economies are under pressure from the global credit crunch, the report said.

Nokia made the steepest price reductions of up to 10% for selected music and media phones, while it made smaller cuts across the portfolio, a European telecom industry source said.

Shares in Nokia fell on the news and were 2.2% lower at €17.39, underperforming the 1.8% weaker DJ Stoxx European technology index.

Market data from its home country Finland showed the sharpest falls were in the average retail price of the 5310 and 5610 music phones and the multimedia N81 8GB.

'This is basically a way to run away from competition. You're putting a lot of pressure on your less competitive peers,' said David Hallden, analyst at Cheuvreux.