Nokia is bracing for a significant downturn in handset sales as the economic downturn now gripping most of the world stretches into 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. The weaker consumer spending has impacted many industries, including the global mobile device market. The mobile device market has also been negatively impacted by the more limited availability of credit, which has limited the purchasing ability of some of our trade customers.
Nokia lowered its mobile sale expectations for the last quarter of the year to 330 million (still up though about 20 million over the third quarter). This revised target means that Nokia expects to sell 1.24 billion phones this year instead of its previous expectation of 1.26 billion. Its market share is not expected to change much but profitability is expected to take a hit.
Its outlook on 2009 indicates that industry mobile device volumes will be down in 2009 compared to 2008. As a result, it is taking a number of steps (including cost saving actions, reducing the use of external contractors and consultants, and further cutting operating expenses) to ride out the economic downturn.