Despite efforts on both sides of the Atlantic to kick-start consumer spending, shoppers are holding off on non-essential purchases such as new phones, Nokia has warned.
Pointing to data that showed sales of mobile phones are shrinking faster than expected as consumers are cutting spending, Nokia issued its second warning in three weeks on the state of the market for new handsets.
"Consumers are continuing dramatically to cut back their spending," Nokia chief financial officer Rick Simonson said at the company's investor day in New York, adding that he was under "no illusions" that the market would recover any time soon. " We're facing it across the world. What's recently accelerated is the slowdown in emerging markets," he said.
Nokia said handset market volumes are expected to fall by at least five per cent next year, something many analysts were already expecting. But it sees its market share rising, helping to lift its stock four percent to €11.02 (£9.58) in Europe and $13.84 (£9.43) in the US.
Some analysts are worried, however, that handset sales could fall a lot further next year, as even Nokia acknowledged that it does not have a good view of the market for 2009. Nokia's comments echo a similar warning from Samsung.
"We're surprised they didn't cut (its forecast) more for 2009," said Charter Equity Research analyst Ed Snyder. "I don't think we'll see February 1 without another cut."
source : http://www.itpro.co.uk/
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