Nokia said today that the world's mobile phone market would fall in Q4 2008 and 2009 as the slowing economy eases consumer demand around the world.1.24 billion phones would be sold worldwide this year, down from a previous estimate of 1.26 billion, with handset market volumes and the overall telecommunications equipment market down next year, the company said via Reuters.
The news comes shortly after a dismal report from Intel. Clearly, the worst financial crisis in 80 years is showing its true colors.
"In the last few weeks, the global economic slowdown, combined with unprecedented currency volatility, has resulted in a sharp pull back in global consumer spending," Nokia said in a statement.
The strengthening U.S. dollar and yen are pushing up component prices for handset manufacturers, while weakening currencies in emerging markets are hurting the purchasing power of consumers in Nokia's key markets. Additionally, the 15-nation euro zone has seen its economy shrink for the second quarter in a row.
"Developed markets will fare worse and developing markets will fare better," Nokia Chief Financial Officer Rick Simonson told an investor call.
The company is also smarting from the increasingly limited availability of credit, and operators and distributors have been reducing stock to a minimum to get beyond the credit shortage.