Nokia sees phone slump in 2009

 

Gallery

By Reuters

Posted on 14 Nov 2008 at 16:20

Nokia says the world's mobile phone market will be weaker than it expected in the fourth quarter and was set to fall further in 2009.

It forecasts 1.24 billion phones being sold worldwide this year, down from its previous estimate of 1.26 billion, and said handset market volumes and the overall telecom equipment market was expected to fall next year.

Shares in Nokia fell more than 7% to 9.56 euros, its lowest level since August 2004. "The warning dovetails well with Qualcomm and Intel - rapid recent deterioration of consumer electronics demand," says analyst Tero Kuittinen at Global Crown Capital.

"In the last few weeks, the global economic slowdown, combined with unprecedented currency volatility, has resulted in a sharp pull back in global consumer spending," Nokia claims in a statement.

The euro zone is now officially in recession and economic growth is slowing around the world.

Nokia says it now expects fourth-quarter industry mobile device volumes to be approximately 330 million, well below the 346 million average market forecast in a Reuters poll earlier this month.

The phone maker says it expects its market share in the fourth quarter to be at the same level or slightly up from the third quarter, but that sales and profitability in key devices and services would be hurt.