Nokia Profits Fall By 28 Percent

The major handset maker's profits have plummeted in the third quarter, although sales were down by just 5%.

Mobile phone handset Nokia has released its third quarter figures, and the news isn’t good. Although year-on-year sales have fallen just 5%, the quarterly profits have tumbled 28%, with year-on -year operating profits down 21%.

The fall in profits would seem to be due to a fall in the average selling price of handsets, due both to the weaker dollar and a greater demand for lower-priced handsets. The company sold 310 million handsets in the period, up 8% from last year, but with 7% les value.

Olli-Pekka Kallasvuo, Nokia’s chief executive, said:

"As a result of our strong operational management and market position, Nokia was able to achieve solid margins and operating cash flow of €1.3bn for the third quarter of 2008. With our scale, brand, improving product portfolio and low cost structure, we believe Nokia is well positioned for the current times."

Nokia’s global market share dipped slightly, to 38%. The company expects its market share to remain steady or rise slightly in the next quarter and still expects the mobile phone market to grow.