Nokia Cuts Device, Networks Outlook

Nokia Corp. (NYSE: NOK) sent a deep chill through the mobile device and telecom networks sectors Friday by forecasting a slump in global handset sales volumes and a downturn in the market for network infrastructure.

Nokia says a "rapid change in global consumer spending" has hit the mobile device market, and it now expects fourth-quarter global handset unit sales to be about 330 million, lower than previously expected.

For the full year, Nokia now expects total global device unit sales to be 1.24 billion instead of 1.26 billion, though that is still an increase from 2007's total of 1.14 billion.

As a result of the weaker than expected fourth-quarter volumes, Nokia expects sales and profits from its Devices & Services division will be "negatively impacted."

And that's not all.

The Finnish giant, which is the global mobile device market leader, now expects 2009 handset sales volumes to be lower than 2008's expected 1.24 billion.

In addition, the company also now expects the worldwide market for fixed and mobile network infrastructure and associated services "will be down in euro terms in 2009 compared to 2008."

Nokia says it's "taking decisive action to significantly reduce its cost base," and will further cut operating expenses during 2009 "to respond appropriately to the market conditions." There isn't much in the way of immediate detail about how Nokia will achieve those cost cuts, though it did mention in its statement that it will cut back its use of "external contractors, consultants and professional services."

The vendor is expected to reveal more detail during its Capital Markets Day on Dec. 4, 2008 in New York.

Nokia's share price dipped more than 5 percent to €9.80 on the Helsinki stock exchange following the announcement.

— Ray Le Maistre, International News Editor, Light Reading