Nokia has delayed the release of its latest range of smartphones designed to take on Apple's iPhone, forcing the Finnish group to cut profit expectations and sending its shares plunging yesterday.
The handset giant released solid first-quarter results, with sales in its key mobile business rising 8 per cent to €6.7bn (£5.8bn) year-on-year. Yet Nokia's shares spiralled almost 15 per cent lower after it announced the delay to devices based on its new Symbian operating system.
Olli-Pekka Kallasvuo, the chief executive of Nokia, said: "We continue to face tough competition with respect to the high end of our mobile-device portfolio, as well as challenging market conditions on the infrastructure side."
While the devices will still be officially launched on schedule before the end of June, analysts speculated they may not reach customers until September.
Carolina Milanesi, an analyst at Gartner, said: "The market was so upset because revenue expectations for the second half had to be scaled back after the delay. Investors were counting on the new devices to revamp Nokia's smartphone portfolio." She added that when the management was quizzed over the reasons for the delay, "their response was wishy-washy".
While the number of smartphones Nokia shipped in the first quarter was up by more than 50 per cent on a year ago, it was forced to slash the cost of the devices because of strong competition.
Ms Milanesi said that while the volume of smartphones sold had risen, Nokia did not have a popular device in the high-end smartphone market, which is the most profitable. It hopes the latest devices will compete with the iPhone or the devices running Google's Android system.Reuse content