Nokia told investors that its sales declined 19 percent year-over-year to 12.7 billion euros (US$16.5 billion) in the fourth quarter. The company also said it now expects the mobile-device industry’s sales this year will fall about 10 percent from 2008 levels.
Nokia’s mobile-device shipments in the fourth quarter slid 15 percent year-over-year to 113.1 million. And for the entire industry, the Finnish handset maker estimates mobile-device shipments fell nine percent year-over-year to 305 million in the quarter.
Nokia CEO Olli-Pekka Kallasvuo attributed the poor performance to weaker consumer confidence, unprecedented currency volatility, and credit tightness. “We are taking action to reduce overall costs and to preserve our strong capital structure,” Kallasvuo said. “This is clearly our top priority in the current economic environment.”
Approximately 1,000 employees are expected to depart from Nokia, with about half occurring through divestitures, Kallasvuo said. However, the economic realities “require us to do significantly more, and we will take further action,” he said.
A Tough Quarter
During last year’s final quarter, Nokia’s slice of the mobile-device market dropped three percentage points from the 40 percent share it had captured in the year-ago period. The decline was driven primarily by market-share losses in the Middle East and Africa, North America, Asia-Pacific, and in Greater China, the company said. Moreover, the average selling price of Nokia’s mobile devices slipped to 71 euros (US$92.22) — down from 83 euros (US$107.81) a year earlier and one euro less than in the prior quarter.
“The fourth quarter was really tough,” said Gartner Research Director Carolina Milanesi. “Their volumes were a bit lower than what we had anticipated.”
Milanesi said in late November that Nokia was best positioned to deal with tough market conditions because of its economies of scale. Despite Nokia’s latest sales woes, Milanesi sees no reason to change her mind.
“Though it’s…