Nokia struggles to beat off the competition

Sunday 23 October 2011 01:57

Mobile phone giant Nokia was under further pressure today as it revealed it was struggling to beat off competition from rivals like iPhone producer Apple.

The Finland-based firm - which last month announced 700 job cuts in the UK - said it now expects sales for devices and services to be "substantially below" its previous expectations.

The company had hoped for net sales of between 6.1 billion euros to 6.6 billion euros (£5.3 billion to £5.8 billion) between April and June.

Nokia - which blamed its slump in sales on "competitive dynamics" and "pricing tactics by certain competitors" - is close to losing its crown as the world's largest mobile phone maker to Apple.

But other companies in the top-end smartphone market, such as Research in Motion's Blackberry, and pressure from software such as Google's Android, are also hitting the Helsinki-based firm.

Nokia said operating margins in the second quarter will also be substantially below expectations of 6% to 9% due to lower than previously expected net sales.

In the full-year the company said it was no longer "appropriate to provide annual targets for 2011".

Nokia said it is taking immediate action to address the issues that are affecting its devices and services division as its "high-level strategic objectives and targets remain unchanged".

Nokia in February announced plans with Microsoft to produce the first Nokia Windows mobile phone before the end of the year.

Stephen Elop, Nokia chief executive, said: "Strategy transitions are difficult. We recognise the need to deliver great mobile products, and therefore we must accelerate the pace of our transition."

Elsewhere, Apple said chief executive Steve Jobs, who is on medical leave, will deliver the keynote speech at next week's Apple conference.

Mr Jobs went on medical leave in January, handing over day-to-day control to chief operating officer Tim Cook.

The keynote speech will feature Apple's new Mac software, Lion, and the next version of Apple's iPhone and iPad software.

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