Nokia predicts 5% fall in handset sales

Nokia is forecasting a fall in handset sales next year. It expects production to shrink by up to 5% as consumers continue to cut spending.

The manufacturer says it is beginning to feel the pinch from slowing economies in Europe and the US, but is experiencing booming demand from emerging markets in Asia and Africa. However, this is beginning to change and the company is preparing for the worst.

Nokia president and chief executive Olli-Pekka Kallasvuo says: “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.”

Last month the company said it would axe up to 450 sales and marketing jobs as part of a reorganisation of the business.

The announcement came as Nokia reported its third quarter 2008 net sales across Europe decreased 5% to €12.2bn (£10.5bn), compared with €12.9bn (£11.1bn) in the same period last year.