Nokia Warns of Flat Handset Sales in Q4 '08 - to Decline in 2009

Nokia has issued a warning that it expects mobile phone sales in Q4 to be lower than originally expected - at around 330 million handsets, which is roughly stable with the sales a year ago. This would result in a current estimate of industry mobile volume of 1.24 billion in 2008, instead of the earlier estimated 1.26 billion units, up from 1.14 billion units Nokia estimated for 2007.

The mobile device market has also been negatively impacted by the more limited availability of credit, which has limited the purchasing ability of some of Nokia's trade customers.

Nokia warned that it expects that Devices & Services sales and profitability in the fourth quarter 2008 will be negatively impacted, due to the aforementioned factors.

The firm's preliminary estimate is that the industry mobile device volumes will be down in 2009 compared to 2008, impacted by the continuing overall economic slowdown. Also, Nokia and Nokia Siemens Networks preliminary estimate is that the mobile infrastructure and fixed infrastructure and related services market will be down in euro terms in 2009 compared to 2008.

To deal with the economic slow-down, Nokia says that it will curtail use of external contractors, consultants and professional services, and will cut further its operating expenses in 2009 to respond appropriately to the market conditions.

"Nokia believes that its advantages of scale, leading brand, superior logistics, low cost and broad product portfolio are competitive advantages that will enable us to distinguish ourselves from the competition in a challenging 2009," said Olli-Pekka Kallasvuo, Nokia CEO.

Nokia will provide more details on its 2009 estimates and cost saving actions at its Capital Markets Day on December 4th.

Posted to the site on 14th November 2008