Nokia posts worst quarter yet
Hit by poor performance at networks unit.
It booked a $1.4 billion loss from the Nokia Siemens Networks joint venture, citing challenging market conditions.
The world's largest mobile phone company also lost ground on the smartphone market to Apple's iPhone and RIM.
Nokia's share of the smartphones market fell to 35 per cent, from 41 per cent the previous quarter.
"The scale of the smartphone market share loss must give the markets pause for thought over the coming days. Dropping six points in three months is pretty stunning," said MKM Partners analyst Tero Kuittinen.
Rick Simonson, Nokia's chief financial officer, argued the company would regain market share when it introduces new models such as the N97 mini, updating its hit-model N97, and a Linux-software based N900.
"We are going to see improvements there as we are going to see new, fresh models replace older models," he said.
Nokia's key handset unit performed slightly better than expected in the third quarter, as consumer demand for mobile devices started to improve in many markets.
"We have actually seen a bit of pickup in consumer demand and looking forward we expect this to continue," said Simonson.
CCS Insight analyst Geoff Blaber said: "Consumer demand may be showing early signs of improvement but these results show sustained pressure on smartphone margins. Apple's iPhone is defying gravity in the high tier."
Apple is expected to report growing iPhone sales when it announces September quarter earnings later today.
Industry sales of more advanced models, so-called smartphones, rose 15 percent from the previous quarter, Nokia said, but falling smartphone prices are hurting top vendors.
"Nokia is launching plenty of new high-end smartphone models such as the N900 and N97 mini. But as yet there is no iPhone killer to drive a major revival in its smartphone volumes," said Neil Mawston at Strategy Analytics.
HTC, the world's number four smartphone brand, reported worse than expected results last week, underscoring intensifying competition and declining prices.
RIM, the second-largest smartphone maker after Nokia, said on late last month that its profit dropped 3.5 per cent in the August quarter and its outlook fell short of forecasts.