04 December 2008

Nokia lowers mobile industry outlook
for Q4 2008 and gives outlook for 2009

In the last few weeks, the global economic slowdown, combined with unprecedented currency volatility, has resulted in a sharp pull back in global consumer spending and the top cellphone maker Nokia can't keep up with the falling demand for mobile phones!

Today at its annual Capital Markets Day event, Nokia lowered its forecast for mobile device industry volumes for the fourth quarter 2008 and said that global mobile phone industry sales volume will fall more than expected as consumers cut spending.

Nokia also presented forecasts for the company and the industry for 2009. At the event, senior company executives outlined how Nokia's strategy, robust financial structure and competitive product portfolio are expected to ensure the company remains in a position of strength in the more challenging economic times ahead.

Nokia President and CEO, Olli-Pekka Kallasvuo, highlighted the benefits of Nokia's brand, scale and number one market position, stating: "2009 will be challenging for our industry, however we have a strong, enviable base to build on and I believe we will continue to strengthen our position on many fronts. Building on our operational flexibility, Nokia is acting to reduce costs appropriately in the current slowing environment. At the same time, we remain fully committed to making the investments to build the future of our exciting industry and Nokia's continued competitiveness."

Nokia CFO, Rick Simonson, emphasized that appropriate cost reductions are being effected now and are continuing in plans for 2009 and 2010: "Nokia's highly variable, low fixed cost business model allows us to scale to a declining market. 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."

Nokia said it aimed to increase its market share in cell phones in 2009, something analysts said was likely as its smaller rivals would suffer more from the downturn.

"Despite the challenging environment Nokia remains best positioned to deal with consumers needs thanks to their economies of scale and channel strategy," said Gartner analyst Carolina Milanesi.

Nokia also lowered its forecast for the broader 2009 telecoms equipment market, saying it would fall in euro terms 5 percent or more.