Nokia sounds alarm on mobile sales

NOKIA, the world's largest mobile phone maker, today warned that its sales in the crucial run-up to Christmas would be lower than expected. It said sales in October, November and December would be between e8.8bn (£5.6bn) and e9bn. It previously suggested they could be as high as e9.2bn, but the new colour screen phones have not attracted as many customers as predicted.

'Handset sales, while being seasonally strong, have tended towards the mass-volume end of the product portfolio in the lead up to the holiday season,' the company said.

It would mean fourth-quarter sales could show no growth over the same period last year when they were e8.8bn.

The warning sent Nokia shares tumbling 4.1% to e17.20 as it compounded the gloomy industry outlook issued by the Finnish company last week. It warned then that the market for wireless infrastructure would continue to fall sharply next year, and predicted a 10% drop in 2003 on top of a 20% contraction this year.

Nokia's view was more pessimistic than that of Ericsson, the world's largest supplier of mobile infrastructure, which thinks the market will be flat next year.

Nokia expects to sell 400m mobiles in 2002 and said proforma diluted earnings would be within the previously indicated range of 23 to 25 cents.