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Nokia cuts forecast for handset sales

Nokia, the world’s largest mobile phone maker, expects the global handset market to decline by 5 per cent or more next year – the first real decline in a market that has experienced exceptional growth for more than a decade.

The move marks the second time in a month that Nokia has cut its global handset market forecasts.

 “The industry continues to be impacted by the effects of a global consumer pull-back in spending, currency volatility and decreased availability of credit,” the company said.

“Nokia 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.”

Senior executives, speaking at the company’s annual capital markets day in New York, said Nokia now expected global handset sales in the fourth quarter to be lower than the 330m-unit estimate it gave in mid-November when it issued a profit warning.

It now expects 2008 industry mobile device volumes to fall below its earlier estimate of 1.14bn units.

While Nokia executives said they remain committed to making investments for future growth, they also said they plan to cut costs in 2009 and 2010.

“Nokia’s highly variable, low fixed cost business model allows us to scale to a declining market,” said Rick Simonson, chief financial officer. “We are also acting on all fronts to reduce our costs beyond what may be attributable solely to the scalable aspects of the business model – moving to reduce cost of goods sold even further, reduce operational expenditure appropriately, and scale back capital expenditure. We expect these strong actions to offset, in part, the negative impact of slowing sales.”

Olli-Pekka Kallasvuo, the company’s chief executive, said Nokia’s lower manufacturing costs and broad portfolio of handsets meant the company was better positioned than competitors to respond to an expected shift in consumer buying patterns towards lower priced handset.

He also identified growth opportunities in key geographic areas, including the US and Korea, where Nokia has little or no market share, and in smartphones where he acknowledged that Nokia’s product portfolio had been weak but had recently been strengthened by the launch of new devices, including the touchscreen-based N97unveiled on Tuesday in Barcelona.

Last week Gartner, the market research firm and consultancy, estimated that Nokia’s share of the global smartphone market in the third quarter was 42.4 per cent, down from the 48.7 per cent it had a year earlier, reflecting growing competition from rivals including Research in Motion’s BlackBerry family and Apple’s iPhone.

Источник: Financial Times

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