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Nokia trims expectations again

Palm to cut costs by 20%

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Nokia has cut expectations of the mobile-phone market for the third time in as many months, while Palm is planning to cut costs by 20 per cent following a halving of sales.

Less than a month ago Nokia predicted 330 million phones would ship in the last quarter of 2008, a prediction the company now thinks was optimistic - though this time the Finnish giant is only saying that the final number will be lower. Palm admitted that its sales have halved over the last quarter, blaming "economic uncertainty", though increased competition must also be playing its part.

Nokia's approach to bad news is to explain that the whole industry is slowing down, and we should therfore focus on the Finnish giant's market share rather than the number of phones it's actually shipping. The company reckons it can build up market share in 2009 from the current 38 per cent. So we shouldn't be alarmed, but it's hard not to be concerned when they keep issuing warnings like this.

Nokia also reckons retail outlets will be de-stocking for a while - selling what's on the shelves rather than ordering more stock, which will put more pressure on manufacturers including themselves.

Reducing costs seems to be the order of the day: Nokia is promising to "reduce operational expenditure, and scale back capital expenditure", presumably not including the Hollywood office, while Palm is going to trim the workforce and cut back on European operations to the tune of 20 per cent. ®

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