Nokia Sees Shrinking Handset Market

It said the fourth-quarter global phone market will be lower than the estimate of 330 million units it gave Nov. 14, when the company issued a profit warning. Nokia also said it now expects volumes to fall 5% or more next year from 2008 levels.

"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," Nokia Chief Executive Olli-Pekka Kallasvuo said in a statement ahead of the company's investor day in New York.
Nokia said while it is committed to making investments for future growth, it plans to cut costs in 2009 and 2010.
"Nokia's highly variable, low fixed cost business model allows us to scale to a declining market," said Rick Simonson, Nokia's chief financial officer. "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."