Like all other mobile phone companies Nokia too is affected by the global recession which the company termed as an exceptionally tough environment. Nokia’s net profits declined by 90 per cent during the first quarter of 2009 and sales by 29 percent compared to the same quarter last year.

‘Retailers started clearing inventory and reducing stocks. Net profits fell to 122 million Euros during the first quarter of 2009 from 1.2bn Euros during the same quarter of 2008’ declared the company.

Total sales fell to 9.28bn Euros from 12.7bn Euros during the same quarter last year. Device sales were 6.2bn i.e. a reduction of 33.4 per cent compared to the same quarter 2008. Industry experts are predicting that 2009 will be the toughest year yet for the mobile phone market and market volumes may reduce by 10 percent.

The average selling price of a Nokia handset dropped to 65 Euros from 71 Euros at the end of 2008, while the group's market share remained constant at 37 per cent compared to the previous quarter. The sales of Nokia Siemens Networks reduced to 3bn, falling by 31 percent. The company is predicting a 10 percent decline in the wireless infrastructure market against a 5 percent fall last year.