Nokia sales flatten out despite shipping more units

Nokia , which holds 39% of the mobile phone market, unveiled flat...

Nokia, which holds 39% of the mobile phone market, unveiled flat annual sales this morning, but this belied a steepening decline in demand for handsets.

CEO Olli-Pakka Kallasvuo said, the global economic slowdown and unprecedented currency volatility led to a sharp drop in consumer spending worldwide, particularly in the fourth quarter, which slid 27%. The credit crunch also affected some trade customers, he said.

Despite the contraction of the fourth quarter, handset shipments were up 7% to 468 million, but the average price received in the quarter dropped from €83 a year ago to €71 per unit, a euro cheaper than the third quarter 2008.

Kallasvuo said the industry's total mobile device shipments in 2008 reached 1.21 billion units, 6% up year on year. "Based on our preliminary market estimate, Nokia's market share grew to 39% in 2008, compared to 38% in 2007," he said.

Sales of "converged mobile devices" or smartphones were strong, rising to 161 million units from 117 million units in 2007, Nokia estimated. "Our own converged mobile device volumes were 60.6 million units in 2008, compared with 60.5 million units in 2007. Nokia shipped more than 36 million Nokia Nseries and approximately 10 million Nokia Eseries devices in 2008," Kallasvuo said.

Nokia also boosted linkage between its phone and computer functions. It said earlier Microsoft Exchange ActiveSync will be available in all Nokia S60 3rd edition devices, as well as compatibility with IBM Lotus Notes Traveler on all Nokia S60 3rd edition devices. "These enable access to over 80% of the world's corporate e-mail accounts," Kallasvuo said.

It also moved further into value-added markets with the launch of music download sites in 12 countries following a tie-up in the UK with Universal Music Group International, Warner Music Group, Sony BMG Music Entertainment and EMI Group, as well as smaller independent music labels. It also added maps, media, messaging and games to many of its phones.

For phone owners who have given up their PCs, Nokia updated, a software as a service product for synchronising calendar, contacts, notes and tasks between a Nokia mobile device and

Full results are available from Nokia's website.

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