Mobile phone maker Nokia Oyj abandoned hope of meeting key targets just weeks after setting them, raising questions over whether its new boss can deliver on the turnaround he promised in February. Its shares tumbled nearly 20 percent to their lowest in some 13 years.
Nokia, once the undisputed leading force in the mobile phone market, has seen its position threatened in recent years, particularly losing ground in the smartphone sector to Apple Inc's iPhone and Google Inc's Android devices. The company, still the number one handset maker by volume, is switching to Microsoft Corp's software from its own Symbian platform as part of an overhaul of its phone business set out three months ago by new Chief Executive Stephen Elop.
But it continues to suffer from mounting competition and warned on Tuesday it expects net sales from its devices and services business in the second quarter to be "substantially below" its previous forecast, set in April, of between 6.1 billion euros ($8.7 billion) and 6.6 billion.
Elop, brought in last year to help revive Finland's flagship technology company, blamed both weak sales and price cuts, noting competition was particularly tough in Europe. "Android is gaining strength. Apple is Apple, of course," he told analysts on a conference call. He also said management issues had also hurt business in China, where Nokia faces challenges from the likes of HTC Corp.