Nokia has reported a 19% year-on-year fall in sales in the fourth quarter of 2008, with net sales of €12.7bn (£12bn). The mobile manufacturer predicts that market volumes will shrink 10% this year as the economic slowdown hits consumer spending.
Nokia says it aims to cut annual costs at its key handset unit by €700m (£662m). The number of handsets shipped in the quarter fell 15% to 113.1 million units despite increased demand for handsets over Christmas and New Year.
Olli-Pekka Kallasvuo, Nokia chief executive, says: “We are taking action to reduce overall costs and to preserve our strong capital structure. This is clearly our top priority in the current economic environment.
“In recent weeks, the macroeconomic environment has deteriorated rapidly, with even weaker consumer confidence, unprecedented currency volatility and credit tightness continuing to impact the mobile communications industry.”
The handset manufacturer says it has lowered its outlook for global industry mobile device volumes, saying it now expects them to fall 10% in 2009, compared to an earlier forecast of a 5% drop.
It adds the decline will be sharper in the first half of the yearthan in the second, with volumes dropping more sharply than is customary between the fourth and the first quarter.
Nokia estimates its market share at 37% in the quarter, down from 40% a year ago and 38% in the third quarter. It says it has lost ground in the Middle East and Africa, North America and China.