The profit warning was coupled by other bad news from the box
The Finnish company has increasingly been losing out to competitors in the lucrative top-end smartphone sector, against Apple Inc.'s iPhone and brands using Google
Inc.'s popular Android software, including Samsung. But it's also been squeezed in the low-end by Asian manufacturers making cheaper phones, such as China's ZTE.
Nokia said operating margins in the first quarter were "approximately negative 3 percent." Previously, it had expected them "around break-even, ranging either above or
below by approximately 2 percentage points."
It said it sold 71 million mobile phones in the quarter — down from 108 million in 2011 — with net sales of tablet android 4.0
, while smartphone sales halved to 12 million units
from a year earlier.
The profit warning was coupled by other bad news from the cell phone maker, which acknowledged a data connection problem with the Lumia 900 just two days after a high
-profile launch in Times Square in New York and elsewhere in the United States.
Nokia said it would compensate American Lumia 900 users with $100 in credit at AT&T because of the software problem, as well as providing an updated Lumia 900.
Wednesday's news spooked investors, who sent Nokia's share price down more than 14 percent to close at on the Helsinki Stock Exchange.
CEO Stephen Elop described the performance as "disappointing" for the company that had pinned hopes on posing a new challenge against chief rivals with new Windows-
based Lumia smartphones, first launched in Europe in November and later in the United States and China.
"Our devices and services business continues to be in the midst of transition," Elop said. "Within our smart devices business unit, we have established early momentum
In the first quarter 2012, Nokia said it sold more than 2 million Lumia phones at an average price of On Wednesday it unveiled a new version of the Lumia 610 which
will give customers near field communication technology, or NFC, allowing users make payments at adapted sales tills and exchange data with handsets with similar
Elop also told analysts that Nokia would launch new products in the second quarter, take "tactical pricing actions in the near term" and would speed cost-cutting
easures and "pursue significant structural actions if and when necessary."
The agency teamed up with the nation's top wireless carriers, including AT&T, Verizon, T-Mobile, and Sprint to develop a database of stolen gadgets. Within six months,
U.S. cell phone owners will be able to call their provider if their device is stolen and the carrier will lock it down and prevent it from being used. That database is