Ailing Nokia's shares nosedive

More bad news from the mobile phone giant as it warns profits will be far worse than expected

Nokia shares crashed 15 per cent yesterday as the Finnish mobile phone company admitted its profits will be hit by competition from Asian rivals such as China's ZTE. Its chief executive Stephen Elop warned Nokia was feeling the most pressure in fast-growing regions such as India, the Middle East and Africa and China.

The fallen mobile phone giant said operating margins in the first quarter were "approximately negative 3 per cent", far worse than previous guidance of "around break-even", and it expects a similar slide in the next quarter.

It is yet another blow to Nokia, which has already been struggling in the premium smartphone market where Apple's iPhone and Google's Android operating system are now dominant.

Mr Elop, who memorably described Nokia as a "burning platform" a year ago soon after he took the job, admitted the performance was "disappointing" and claimed the business "continues to be in the midst of transition".

The shares have halved in a year and are down almost 90 per cent since 2007. Analysts are used to bad news from Nokia but the profit downgrade still came as a shock.

"It's a disaster," said Thomas Langer at WestLB, who warned sales of the new Windows-based Lumia phones were failing to offset a fall in the older Symbian model.

"Nokia continues to be a rollercoaster ride for investor sentiment as product cycles bedazzle but ultimately disappoint," Lee Simpson, an analyst at Jefferies, said. "For some hard-heads, the long-term trend to brand irrelevance is embarrassingly plain in some countries. Just what is Nokia if not an ailing low-margin box maker?"

Mr Elop has been battling to win over investors and consumers with the Lumia smartphones which have been developed with Microsoft.

In a further embarrassment, Nokia admitted yesterday it has found a software bug in its new flagship Lumia 900 model, which means the phone can sometimes lose its data connection.

Nokia offered $100 credit for anyone who has bought it in the US and said it hoped to fix the problem by next week.

"They really did not need it... but I like the way they are dealing with it," said Carolina Milanesi, a telecoms analyst at Gartner Research, referring to the compensation offer.

Nokia has been the leading handset maker since 1998, but its market share has fallen sharply, from 40 per cent in 2008 to below 30 per cent last year. Jefferies estimates its share could now be as low as 22 per cent.

Mr Elop has already announced as many as 14,000 job cuts in an attempt to turn around the ailing company.

The Finnish software entrepreneur Risto Siilasmaa takes over as chairman of Nokia next month. Its vice chairman Dame Marjorie Scardino, the Pearson chief executive, has been on the board since 2001.

VIDEO
Arts & Entertainment
Homer meets Lego Marge in the 25th anniversary episode of The Simpsons, set to air on 4 May
tv
Arts & Entertainment
James Franco and Chris O'Dowd in Of Mice and Men on Broadway
theatreReview: Of Mice and Men, Longacre Theatre
Life & Style
Infant child breast-feeding with eyes closed
healthTo stop mummy having any more babies, according to scientists
News
news
Life & Style
Going down: Google's ambition to build an elevator into space isn't likely to be fulfilled any time soon
techTechnology giant’s scientists say there is no material strong enough for a cable from Earth into orbit
Arts & Entertainment
film
Sport
Vito Mannone fails to keep out Samir Nasri's late strike
sportMan City 2 Sunderland 2: Goalkeeping howler allows Man City to scrap a draw – but Premier League title is Liverpool's to lose
News
David Cameron sings a hymn during the enthronement service of The Most Rev Justin Welby as Archbishop of Canterbury, at Canterbury Cathedral last year
news
Life & Style
From long to Jong: Guy Pewsey gets the North Korean leader's look
fashionThe Independent heads to an Ealing hairdressers to try out the North Korean dictator's trademark do
Extras
indybest10 best smartphones
Arts & Entertainment
tvCreator Vince Gilligan sheds light on alternate endings
Life & Style
Google Doodle celebrates the 63rd anniversary of the Peak District National Park
tech
News
Paul Weller, aka the Modfather, performing at last year’s Isle of Wight Festival in Newport
people
Life & Style
Michael Acton Smith founded Firebox straight out of university before creating Moshi Monsters
techHe started out selling silliness with online retailer Firebox, before launching virtual creatures who took the real world by storm
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Client Relationship Manager - SQL, Python

£40000 - £50000 per annum: Harrington Starr: Client Relationship Manager - SQL...

**Financial Services Tax**

£35000 - £50000 per annum: Pro-Recruitment Group: Take your chance to join the...

Data Analyst - Financial services, Client data, LEI

£40000 - £50000 per annum + BONUS + BENEFITS: Harrington Starr: A leading, Cit...

Management Consultancy - Operational Research Analysts

£35000 - £50000 per annum + Bonus + Benefits: Pro-Recruitment Group: You must ...

Day In a Page

Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

Ricky Gervais: 'People are waiting for me to fail'

As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

Mad Men returns for a final fling

The suits are still sharp, but Don Draper has lost his edge
Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

Google finds a lift into space will never get off the ground

Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit
Westminster is awash with tales of young men being sexually harassed - but it's far from being just a problem in politics

Is sexual harassment a fact of gay life?

Westminster is awash with tales of young men being sexually harassed - but it's far from being just a problem in politics
Moshi Monster creator Michael Acton Smith: The man behind a British success story

Moshi Monster creator Michael Acton Smith

Acton Smith launched a world of virtual creatures who took the real world by storm
Kim Jong-un's haircut: The Independent heads to Ealing to try out the dictator's do

Our journalist tries out Kim Jong-un's haircut

The North Korean embassy in London complained when M&M Hair Academy used Kim Jong-un's image in the window. Curious, Guy Pewsey heads to the hair salon and surrenders to the clippers
A History of the First World War in 100 moments: A forgotten naval victory in which even Nature played a part

A History of the First World War in 100 moments

A forgotten naval victory in which even Nature played a part
Vespa rides on with launch of Primavera: Iconic Italian scooter still revving up millions of sales

Vespa rides on with launch of the Primavera

The Vespa has been a style icon since the 1950s and the release this month of its latest model confirms it has lost little of its lustre
Record Store Day: Independent music shops can offer a tempting alternative to downloads

Record Store Day celebrates independent music shops

This Saturday sees a host of events around the country to champion the sellers of well-grooved wax
Taunton's policy of putting philosophy at heart of its curriculum is one of secrets of its success

Education: Secret of Taunton's success

Taunton School, in Somerset, is one of the country's leading independent schools, says Richard Garner
10 best smartphones

10 best smartphones

With a number of new smartphones on the market, we round up the best around, including some more established models
Mickey Arthur: Aussie tells ECB to stick with Ashley Giles

Mickey Arthur: Aussie tells ECB to stick with Ashley Giles

The former Australia coach on why England must keep to Plan A, about his shock at their collapse Down Under, why he sent players home from India and the agonies of losing his job
Homelessness: Why is the supported lodgings lifeline under threat?

Why is the supported lodgings lifeline under threat?

Zubairi Sentongo swapped poverty in Uganda for homelessness in Britain. But a YMCA scheme connected him with a couple offering warmth and shelter
A History of the First World War in 100 Moments: When the world’s biggest shed took over Regent’s Park

A History of the First World War in 100 Moments

When the world’s biggest shed took over Regent’s Park
The pain of IVF

The pain of IVF

As an Italian woman vows to keep the babies from someone else’s eggs, Julian Baggini ponders how the reality of childbirth is often messier than the natural ideal