Nokia gives warning of lower Q2 profits

COMPETITION from Apple and the woes of the euro have hit Finnish mobile phone manufacturer Nokia, which has warned profits would be weaker than expected in 2010.

The world's biggest mobile phone maker said its second-quarter earnings will be "at the lower end of, or slightly below", its previously expected range of 6.7 billion to 7.2bn.

Shares in the company fell more than 11 per cent to 7.02 – their lowest level since March 2009.

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Inge Heydorn of Sentat Asset Management said: "Investors are worried about Nokia's long-term market position. Nokia loses market shares at the high end, the mix worsens and margins go down. At the high end, it loses mainly against Apple."

Last month Nokia chief executive Olli-Pekka Kallasvuo said it had "plenty to do" to keep up with competition from high-end products such as Blackberry and Apple.

A statement issued by the company yesterday said: "During the second quarter 2010, multiple factors are negatively impacting Nokia's business to a greater extent than previously expected.

"These factors include: the competitive environment, particularly at the high-end of the market, and shifts in product mix towards somewhat lower gross margin products.

"In addition, the recent depreciation of the euro affects Nokia's cost of goods sold, operating expenses and global pricing tactics."