Nokia cuts mobile web services forecast

At its annual Capital Markets Day event Thursday, handset giant Nokia lowered its fourth quarter forecast for mobile device industry volumes and outlined its overall expectations for the months ahead, anticipating the Internet services market will generate significantly lower revenues than originally expected. Citing the effects of worldwide consumer spending reductions, currency volatility and dwindling credit availability, Nokia said it now believes that Q4 2008 industry mobile device volumes will fall shy of previous estimates of roughly 330 million units, resulting in full-year 2008 industry device volumes below an earlier estimate of 1.24 billion units. Nokia adds there is insufficient visibility in the marketplace to confirm its prior Q4 mobile device market share estimate, which it expected to hold steady or even increase from Q3 totals of 38 percent.

In all, Nokia anticipates industry mobile device volumes in 2009 will decline 5 percent or more year-over-year--in addition to the negative impact suffered as a result of consumer spending reductions, the company forecasts that operator and retail distribution channels will face a restocking period translating to lower sales volumes by manufacturers than purchase volumes by consumers during the first half of 2009. Nokia also adjusted its forecast for music, maps, media, messaging and gaming, anticipating these targeted portions of the web services market will yield 2011 revenues of $50 billion. In December 2007, Nokia estimated the total value of the web services market would increase to approximately $125 billion in 2010.

Nokia said its key priorities for 2009 include guaranteeing its cost base is appropriately sized for a more challenging environment as well as growing its mobile device market share. The company also plans to capitalize on growth opportunities in NAVTEQ and device enhancements and to capture value from adjacent markets. In addition, Nokia said it will continue to grow and focus its services portfolio, mobilize consumer email and IM, and further integrate and simplify its web services UI and device UI.

For more on Nokia's forecast:
- read this release

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