The world's largest mobile phone maker Nokia said on Thursday its profit dropped 69 per cent in the fourth quarter of last year due to falling sales and lower prices for its mobile phones.
Nokia's Q4 net sales fell 19.5 per cent to 12.7 billion euros (about 16.4 billion dollars) from 15.8 billion euros (about 20.3 billion dollars) in the same period in 2007, while the net profit was 576 million euros (about 744 million dollars), 69 per cent less than the corresponding season in 2007, the company said in the quarter report posted on its website.
The Finnish company attributed the drop in sales and profit to less demand for its mobile phone worldwide. In October-December Nokia sold 113 million mobile phones and its market share shrank to 37 percent from 40 per cent in the last quarter of 2007.
The decline of selling price for its mobile phones also contributed to the drop in sales and profit. The mobile phone average selling price (ASP) in the fourth quarter of 2008 was 71 euros (about 92 dollars); 12 euros lower than that of the same period of 2007.
Nokia said the mobile phone market would be even weaker in 2009. It expects 2009 industry mobile device volumes to decline approximately 10 per cent from the 2008 levels.
"In recent weeks, the macroeconomic environment has deteriorated rapidly, with even weaker consumer confidence, unprecedented currency volatility and credit tightness continuing to impact the mobile communications industry," Olli-Pekka Kallasvuo, chief executive of Nokia, said in a statement.
"We are taking action to reduce overall costs and to preserve our strong capital structure. This is clearly our top priority in the current economic environment," he added.