Nokia cuts sales second time in three weeks

Nokia, the world’s largest mobile phone manufacturer, cut its sales forecast for the second time in three weeks, saying that handset volumes had slowed more rapidly than it had expected.

Its warning is the third in three months as its November statement followed a downward revision made just two months before.

The Finnish company said today that it expects sales of mobile handsets to decline by 5 per cent or more next year — the first time they will have fallen for eight years.

It also said that it expects fourth-quarter sales to fall below its prediction made last month of 330 million handsets and 1.24 billion units for the year.

Nokia published its forecast before the group’s investor day, which is being held in New York today.

Last month Nokia said that it expected its final quarter's market share to be flat, or slightly up on the 38 per cent achieved in the third quarter. However, the group today said that there was "insufficient visibility" to confirm that estimate.

“The mobile device market slowdown has continued more rapidly than previously expected,” Nokia said.

“The industry continues to be impacted by the effects of a global consumer pull-back in spending, currency volatility and decreased availability of credit.”

All markets had been affected by the slowdown although “the most recent incremental impact in the emerging markets has been more pronounced than in other markets”, added Nokia.

Olli-Pekka Kallasvuo, Nokia's chief executive, gave warning that 2009 would be challenging for the industry but said that he nevertheless expected Nokia to strengthen its position as market leader.

"Building on our operational flexibility, Nokia is acting to reduce costs appropriately in the current slowing environment," he said.

Analysts had expected the 5 per cent volume slowdown and Nokia shares gained 4 per cent to €11.06.