Shares in Nokia tumbled by 10 per cent yesterday after the world's leading maker of mobile phones reported disappointing second-quarter figures and warned that it was facing a weak third quarter.
The Finnish group suggested it was facing intense competition, driving its margins down sharply in spite of higher sales and market share gains.
Jorma Ollila, chairman and chief executive, blamed pricing pressures in emerging markets, where cheap phones predominate, and the increased importance of those markets in Nokia's overall business mix.
Although the company lifted its market share to 33 per cent from 32 per cent in the first quarter, the average selling price for its phones fell by €5 to €105. The weaker trend would hurt Nokia and its competitors for the rest of the year, he warned.
Nokia expects third-quarter earnings of between 14 and 17 cents a share. This compares with the 20 cents that analysts had been expecting and last year's 15 cents.
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