Nokia posted a worse-than-expected decline in 2008 Q4 sales and net profit yesterday. It also cut its dividend and offered a gloomy outlook for 2009. The company will concentrate on its touchscreen smartphones in an attempt to rival Apple's successful Apple iPhone.
See also: Apple iPhone review
Nonetheless, the market reacted badly to Nokia's results; by mid-afternoon, Nokia shares were down close to 9 percent in Helsinki.
The Finnish phone maker posted a net profit of €576 million (£540m; US$747m) for last three months of 2008 - down 69 percent year-on-year. Sales dropped 19 percent to €12.7 billion.
The macroeconomic environment is a challenge, "and will remain so in 2009", said Nokia CEO Olli-Pekka Kallasvuo, reports Total Telecom.
Nokia expects device volumes to fall by 10 percent this year - double its predicted decline in December.
The decline comes on the back of "weaker consumer confidence, unprecedented currency volatility and credit tightness," said Kallasvuo.
Nokia's device market share was 37 percent in Q4 - down from 40 percent Q4 2007 and 38 percent in Q3 2008.
"Our smartphone volumes were down," said Kallasvuo. "But our smartphone portfolio is heading in the right direction," referring to the just unveiled N97 (above) and 5800 (below).
"Smartphones are not high-end only," pointed out Kallasvuo.
"We are expanding the definition of smartphones," and combining the devices with services, said Nokia chief financial officer Rick Simonson.
Nokia will focus on five core service areas: music, maps, media, messaging and games.
Comes With Music "has gotten a good start in the UK," claimed Kallasvuo. It has performed beyond expectations, he said, with more than half a million units sold in the last 30 days of the fourth quarter.