The world's largest mobile phone maker, Nokia, lowered its first-quarter earnings forecast today after a lack of attractive handsets allowed rivals to encroach on its market share.
Shares in the Finnish company plunged by 15 per cent to 14.72 euros by lunchtime on the news, pulling the wider DJ Stoxx European technology sector index down 6.7 per cent.
Nokia said its sales by value fell two per cent to 6.6 billion euros ($8.13 billion) versus a previous forecast of three to seven per cent growth.
It now expects January-to-March earnings per share of 0.17 euro versus previous guidance of 0.17-0.19 euro. In the year-ago period it reported earnings of 0.20 euro per share.
Most analysts were expecting Nokia to beat the earnings range, with earnings of around 0.21 euro per share, hoping the market leader had taken advantage of booming demand for cheap handsets in emerging countries and advanced multimedia camera phones in mature markets.
Nokia Chief Executive Mr Jorma Ollila told investors in a conference call that the company lacked attractive medium-priced products in its home base of Europe and the important North American market.
"We have not been able to grow with the market in the United States and Europe, where our share has been very strong," he said.
Some analysts estimated that Nokia had lost up to four per cent age points of global market share from the 35 per cent Nokia achieved in the fourth quarter.
Mr Ollila said Nokia would regain lost ground in the remainder of the year with new models, singling out new clam-shell designs which are offered by its rivals but mostly absent from its own range.
"All of those (new models) will have a meaningful impact, but in the early part of the year we will not be quite as competitive as we've been earlier," he said.
Nokia said global mobile phone unit sales grew by more than 25 per cent in the first quarter while Nokia handset sales increased by a lesser 19 per cent.