Nokia cuts outlook again

For the second time in under a month, Nokia revised down its expectations for industry mobile-phone sales this year and next.

After warning less than a month ago that the worldwide handset market would do worse than expected this year and next, Nokia on Thursday revised down its expectations again.

It joins a host of other companies and experts who say that the mobile-phone industry, which until recently was expected to be a rare bright spot in an otherwise dark economic outlook, will be hard hit.

In mid-November, Nokia said that collectively mobile-phone makers would sell 1.24 billion phones in 2008, rather than its earlier estimate of 1.26 billion. Now, Nokia says fourth-quarter sales will be lower than expected, dragging down the year's sales even lower.

Nokia did not offer a new overall sales figure for 2008, nor could it confirm its prior expectation that it would claim 38 percent of the market for the fourth quarter this year. That's the same share Nokia had in the third quarter this year.

Since it last made predictions, Nokia appears to have observed a downturn in emerging markets. In mid-November, the handset giant said that the emerging markets were faring better than developed markets. However on Thursday, Nokia said that most recently the impact in emerging markets has been more pronounced than other regions.

Nokia also had bad news for its expectations for next year. It now says that 2009 industry volumes are likely to decline 5 percent or more from this year.

Other mobile-phone makers including Research In Motion and Palm have also recently warned about lower expectations. Earlier this week RIM said that it expects to report 2.6 million new users in its third quarter, rather than the 2.9 million it previously forecast. That new figure is still 57 percent over the same quarter last year, it noted.

After laying off an undisclosed number of people, Palm recently announced that it expects a decline in revenue for its quarter ending on Nov. 28, due to a reduced demand for smartphones.

The expected declines are in line with those of many research firms, including iSuppli, which this week estimated that total phone shipments would decline 5.6 percent next year.

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Nancy Gohring

IDG News Service
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