Nokia Issues Second Warning of Slowing Handset Sales

Nokia has again lowered its forecast for mobile device industry volumes for the fourth quarter 2008 - the second reduction since its original warning only a couple of weeks ago. Nokia said that it believes the slowdown is apparent in varying degrees across all markets, while the most recent incremental impact in the emerging markets has been more pronounced than in other markets.

Nokia now estimates that fourth quarter 2008 industry mobile device volumes will be lower than the previous estimate of approximately 330 million units, which would result in full year 2008 industry mobile device volumes below the earlier estimate of 1.24 billion units. Nokia also believes there is insufficient visibility in the marketplace to confirm its prior estimate for its fourth quarter 2008 mobile device market share, which was expected to be at the same level or slightly up from an estimated 38% in the third quarter 2008.

Nokia President and CEO, Olli-Pekka Kallasvuo said: "2009 will be challenging for our industry, however we have a strong, enviable base to build on and I believe we will continue to strengthen our position on many fronts. Building on our operational flexibility, Nokia is acting to reduce costs appropriately in the current slowing environment. At the same time, we remain fully committed to making the investments to build the future of our exciting industry and Nokia's continued competitiveness."

Nokia also expects that operator and retail distribution channels will go through a period of destocking, resulting in lower sales volumes by manufacturers (sell-in) than purchase volumes by consumers (sell-through) for the industry in the first half of 2009.

While noting the extremely limited visibility, Nokia expects 2009 industry mobile device volumes to decline 5% or more from 2008 levels. Despite this, the firm still expects the four billion mobile subscriptions mark to be reached in the first quarter 2009.

Nokia and Nokia Siemens Networks preliminary estimate is that the mobile infrastructure, fixed infrastructure and related services market will decline 5% or more in euro terms in 2009, from 2008 levels.

Posted to the site on 4th December 2008