Nokia in profits warning as rivals move up

Nokia, which employs more than 130,000 people worldwide, said it expected its handset arm to make a loss in the first and second quarter of this year as sales in India, the Middle East and Africa and China suffered.

Its shares, listed on the Helsinki Stock Exchange, slid by 14 per cent.

However, the Finnish company said it hoped to pose a challenge in the market with the launch of new Windows-based Lumia smartphones in Europe, the United States and China.

Nokia last year lost its crown as the world’s largest manufacturer of smartphones to its buoyant rival Apple, which makes the iPhone.

Chief executive Stephen Elop said the company’s devices and services business continued to be “in the midst of transition”.

He said: “Within our smart devices business unit, we have established early momentum with Lumia, and we are increasing our investments in Lumia to achieve market success.”

Nokia announced a new version of the recently-launched Nokia Lumia 610 yesterday which will give customers near field communication technology, or NFC, which allows users with similar technology to exchange data on their handsets and make payments.

The update follows a warning that its new Lumia 900 model had been hit by a software bug.

The company is depending on the Lumia 900 to challenge Apple and other competitors such as Samsung.

Nokia dominated the mobile phone market in the late 1990s after it overtook Motorola but has since lost its way.

It is being squeezed in the low end market by Asian manufacturers like ZTE and in the high end by the makers of smartphones such as the iPhone and Research in Motion’s BlackBerry devices.

Its shares have nearly halved in value in the past year.