Finnish handset giant Nokia took a major hit on profits during the first quarter of the year, watching them fall 90 per cent to Eur122m, from Eur1.2bn last year as device shipments slowed yet further.

Net sales at the world’s biggest handset vendor also fell 26.7 per cent year on year to Eur9.3bn, from Eur12.7bn in the first quarter of 2008.

As estimated industry mobile device volumes sank 14 per cent year on year to 255 million units in the first quarter, Nokia’s own mobile device volumes dropped 19 per cent year on year and 18 per cent sequentially to 93.2 million units.

As a result, the Finnish firm’s estimated share of the handset market decreased to 37 per cent from 39 per cent in the first quarter of 2008.

The selling price of gadgets dropped too, with the ASP (Average Selling Price) of a Nokia device falling to Eur65, down from Eur71 in the fourth quarter of 2008. However, the company reported strong sales of its first touchscreen handset, the 5800 XpressMusic, which shipped 2.6 million units, with cumulative shipments of more than 3 million units since the device’s launch in late November 2008.

Although Nokia said it expects 2009 industry mobile device volumes to decline around 10 per cent from 2008 levels, although this decline is expected to slow in the second half of the year, while its own market share is expected to increase during the second quarter.

Commenting on Nokia’s results, Gartner research director Carolina Milanesi said: “Although the market remained very challenging the good news today is that it is showing some signs that it is stabilising. This is confirmed by the fact that Nokia did not change its outlook for the year of -10 per cent. Although this is slightly more pessimistic than our view, we are encouraged that Nokia did not revise the number in line with some of the financial analysts’ reports that see the market outlook as between -15 per cent and -20 per cent.”