Nokia’s shares tumbled 17.5 percent on Tuesday and touched their lowest in 13 years after it admitted it had given up on meeting key sales targets just weeks after setting them.
The world’s biggest mobile phone maker warned it expects net sales in the second quarter to be “substantially below” its previous forecast, set in April.
Industry analysts said this showed Nokia’s market position is worsening much faster than expected as it loses out to lower-priced Asian rivals.
It also raises questions over whether new Chief Executive Stephen Elop can deliver on the turnaround he promised in February.
The company is switching to Microsoft’s software from its own Symbian platform as part of an overhaul of its phone business by Elop, who was brought in last year to help revive Finland’s flagship technology company.
In a conference call with analysts he blamed both weak sales and price cuts, noting competition was particularly tough in Europe.
“Android is gaining strength. Apple is Apple, of course,” Elop said. He also said management issues had hurt business in China, where Nokia faces challenges from the likes of HTC.