Nokia Thursday lowered its forecast for mobile phone demand in 2009 after posting a 69 percent drop in fourth-quarter profit.
According to Nokia, the world's largest handset maker, it expects a 10 percent slip in industry sales this year compared with last, prompting it to lower its forecast for the first time in seven years. Last month, Nokia predicted a 5 percent sales slide.
INokia said in a statement that its fourth-quarter net income dropped to roughly $745 million from about $2.4 billion in the fourth quarter of 2007.
In the fourth quarter, Nokia said it sold 15 percent fewer phones than a year before and 4 percent fewer than the previous quarter, a sign that cell and smartphone sales are on the decline. Nokia's drop falls in line with other mobile phone manufacturers, such as Motorola and Sony Ericsson, which also have recently posted losses.
Nokia's revenue dropped about 20 percent to $16.4 billion.
In response to the slowing mobile device market, Nokia said it would cut costs at its handset unit by about $900 million annually. Additional details on the cuts were not released.
For the last three months of 2008, Nokia shipped 113 million handsets, down 15 percent from 2007's fourth quarter. Slowing shipments caused Nokia's global handset market share to dip to 37 percent, down from 38 percent in the previous quarter and 40 percent in the fourth quarter of 2007.
"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," said Nokia CEO Olli-Pekka Kallasvou in a statement. "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. However, it is important for Nokia to continue investing at the proper pace in future growth. We believe Nokia has a tremendous opportunity to capture value as the Internet services market evolves and grows. Being a catalyst for change has been our heritage and it will be our future."