Nokia sees cellphone market falling in 2009, shares drop

Top cellphone maker Nokia Oyj said the world's mobile phone market would be weaker than it expected in the fourth quarter due to the economic slowdown and was set to fall further in 2009.

It forecast 1.24 billion phones being sold worldwide this year, down from its previous estimate of 1.26 billion, and said handset market volumes and the overall telecom equipment market was expected to fall next year.

Shares in Nokia fell more than 7 percent to 9.56 euros, its lowest level since August 2004. "The warning dovetails well with Qualcomm and Intel – rapid recent deterioration of consumer electronics demand," said analyst Tero Kuittinen at Global Crown Capital.

Shares in Ericsson fell 3 percent by 8:45 a.m. EST after trading up more than 4 percent before the news.

"In the last few weeks, the global economic slowdown, combined with unprecedented currency volatility, has resulted in a sharp pull back in global consumer spending," Nokia said in a statement.

The euro zone went into recession officially on Friday, and economic growth is slowing around the world.

Nokia said it now expects fourth-quarter industry mobile device volumes to be approximately 330 million, well below the 346 million average market forecast in a Reuters poll earlier this month.

The phone maker said it expected its market share in the fourth quarter to be at the same level or slightly up from the third quarter but that sales and profitability in key devices and services would be hurt.