Page last updated at 16:32 GMT, Thursday, 16 July 2009 17:32 UK

Nokia shares slide as profits hit

 A sales assistant holds up a Nokia handset
Nokia said competition in the mobile handset market was intense

Nokia, the world's biggest mobile phone maker, saw a 66% slide in quarterly profit as the economic downturn hit demand for handsets.

The news sent Nokia's share price sharply lower.

It made a net profit of 380m euros (£326m) in the April to June quarter, down from 1.1bn euros a year earlier.

Rival phone maker Sony Ericsson also reported a quarterly loss and warned that the rest of the year would remain difficult for the company.

'Tough quarter'

Nokia said it had put in a "solid performance" in "another tough quarter".

It said it was unlikely to be able to increase market share this year despite predicting earlier it would be able to.

"Competition remains intense, but demand in the overall mobile device market appears to be bottoming out," said Olli-Pekka Kallasvuo, Nokia's chief executive.

Nokia's shares ended down 14.7% at 9.47 euros.

'Challenging'

Sony Ericsson made a loss of 213m euros (£183m; $300m) in the April to June quarter, slightly less than the 293m euros deficit in the first quarter.

"As expected, the second quarter was challenging and we still believe the remainder of the year will be difficult for Sony Ericsson," the firm said.

"Our performance is beginning to improve because of our cost reduction activities," it added.

The company has said it will cut a total of 4,000 jobs.

Analysts say that the mid-range music and camera phone Sony Ericsson focuses on, are less in demand than basic models or high-tech gadgets such as the iPhone.

Sony Ericsson said it expected the global market for mobile phone handsets to shrink by at least 10% from 1.19 billion units in 2008.



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