Nokia reports 20 percent decline in profit

NOKIA, the world’s biggest manufacturer of mobile phone handsets, recorded nearly 20 percent decline in profit for the last quarter of 2008.

The company has also projected that sales of mobile phone devices will decrease significantly during the current year.

Nokia net sales of 12,7 billion Euros were 19 percent lower that in 2007, while Devices & Services net sales of 8,1 billion Euros were down by 27 percent.

Nokia chief executive officer, Olli-Peka Kallasvuo, attributed the setbacks to a myriad of challenges facing the sector.

“In recent weeks, the macroeconomic environment has deteriorated rapidly, with even weaker consumer confidence, unprecedented currency volatility and credit tightness continuing to impact on the mobile communications industry.

“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,” said Kallasvuo.

Nokia said in the fourth quarter of 2008, it sold 113,1 million units, which represented a 15 percent drop from last year.

During the period the overall industry mobile device volumes for the same period were 305 million units.

Nokia’s market share declined as well, particularly in Middle East and Africa, as a result of market share losses in several countries, including South Africa, Nigeria and Iran. Nokia said it would adopt measures to enhance viability in the near future.–ITNewsAfrica.